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8-K - FORM 8-K - Orexigen Therapeutics, Inc.d599494d8k.htm

Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.   Case No. 18-10518 (KG)
Debtor   Reporting Period: April 1, 2018 - April 30, 2018

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 committe appointed in the case.

 

REQUIRED DOCUMENTS

  Form No.   Document
Attached
   Explanation
Attached
    Affidavit/Supplcmcnt
Attached
 

Schedule of Cash Receipts and Disbursements

  MOR-1   x     

Schedule of Disbursements by Debtor Entity

  MOR-la   x     

Schedule of Debtor Bank Account Balances

  MOR-lb   x     

Schedule of Professional Fees and Expenses Paid

  MOR-lc   x     

Copies of bank statements

           Certification Attached  

Cash disbursements journals

           Certification Attached  

Bank reconciliation

           Certification Attached  

Statement of Operations

  MOR-2   x     

Balance Sheet

  MOR-3   x     

Status of Postpetition Taxes

           Certification Attached  

Copies of IRS Form 6123 or payment receipt

           Certification Attached  

Copies of tax returns filed during reporting period

           Certification Attached  

Summary of Unpaid Postpetition Debts

        

Summary of Unpaid Post Petition Accounts Payables

  MOR-4   x     

Accounts Receivable 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 attached documents are true and correct to the best of my knowledge and belief.

 

/s/ Stephen Moglia

     

5/30/18

Signature of Authorized Individual*     Date

Stephen Moglia

   

VP, CAO

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.

Notes:

 

The last four digits of Debtor’s federal tax identification number are (8822). The Debtor’s mailing address for purposes of this chapter 11 case is 3344 North Torrey Pines Court, Suite 200, La Jolla, CA, 92037.


UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.

     Case No. 18-10518 (KG)  

Debtor

     Reporting Period: April 1, 2018 - April 30, 2018  

CERTIFICATION REGARDING POST-PETITION BANK ACCOUNT

RECONCILIATIONS, CASH DISBURSEMENT JOURNALS AND

COMPLIANCE AND PAYMENT OF POST-PETITION TAXES

I, Stephen Moglia, Chief Accounting Officer, of Orexigen Therapeutics, Inc. (the “Debtor”) hereby certify the following:

1. Attached to MOR-1 is a listing of the Debtor’s bank accounts, by account number, and the opening and closing balances. These accounts are reconciled monthly in accordance with the Debtor’s ordinary course accounting practices and are available to the United States Trustee upon request.

2. Cash disbursement journals are maintained in accordance with the Debtor’s ordinary course accounting practices and are available to the United States Trustee upon request.

3. To the best of my knowledge and belief, the Debtor is current on all post-petition taxes, and no post-petition tax amounts are past due.

 

/s/ Stephen Moglia

     

5/30/18

Stephen Moglia     Date
Chief Accounting Officer    


UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: April 1, 2018 - April 30, 2018

Notes to Monthly Operating Report

Debtor in Possession Financial Statements

The financial statements and supplemental information presented in this Monthly Operating Report (“MOR”) have been prepared using the Debtor’s books and records solely to comply with the requirements of the monthly reporting requirements under the United States Bankruptcy Code and those of the United States Trustee for Region Three.

The financial statements and supplemental information presented herein are unaudited, preliminary in nature, and may not comply with generally accepted accounting principles in the United States of America (“U.S. GAAP”) in all material respects. These preliminary unaudited financial statements and other information represent the Debtor’s good faith attempt to comply with the requirements of the United States Bankruptcy Code and those of the United States Trustee using the resources available. This information is limited in scope to the requirements of this report.

These preliminary unaudited financial statements have not been subject to procedures that would typically be applied to financial information presented in accordance with U.S. GAAP, and upon application of such procedures, the Debtor believes that the financial information could be subject to changes, which could be material. Certain totals may not sum due to rounding.

All related tax implications are not currently reflected in the preliminary unaudited financial statements herein. The financial impact of potential tax and other adjustments on the accompanying preliminary unaudited financial statements cannot be determined at this time.

There may be adjustments to the opening balance sheet as of March 12, 2018 that will impact these accompanying preliminary unaudited financial statements. ASC 805 permits a one-year measurement period in which the opening balance sheet can be adjusted if additional information becomes available.

Liabilities Subject to Compromise

As a result of the commencement of the Debtor’s chapter 11 case, the payment of certain prepetition indebtedness of the Debtor is subject to compromise or other treatment under a plan of reorganization.

Reorganization Items

ASC 852 requires expenses and income directly associated with the Debtor’s chapter 11 cases to be reported separately in the income statement as reorganization items. Reorganization items include expenses related to legal advisory and representation services, and other professional consulting and advisory services. Reorganization costs also include adjustment to record debt at the estimated amount of the claim.

Litigation

The Debtor is subject to lawsuits and claims that arise out of its operations in the normal course of business. Prior to the petition date, the Debtor was the defendant to various legal proceedings, described in detail in the most recent publicly filed financial statements, which are stayed during the course of the chapter 11 bankruptcy proceedings.

There are uncertainties inherent in any litigation and appeal and the Debtor cannot predict the outcome. At this time the Debtor is unable to estimate possible losses or ranges of losses that may result from such legal proceedings described in detail in the most recent publicly filed financial statements, and it has not accrued any amounts in connection with such legal proceedings in the financial statements herein, other than attorney’s fees accrued prior to the petition date.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: April 1, 2018 - April 30, 2018

MOR-1

Consolidated Schedule of Cash Receipts and Disbursements (I)

For the Period: April 1, 2018 - April 30, 2018

(Unaudited)

 

$ USD ‘000s

   April 1, 2018 - April 30, 2018      Cumulative
Since Filing
 

Beginning Cash Balance (Book)

   $ 14,678      $ 21,372  

Receipts

     

Operating Receipts

     3,717        8,979  

Miscellaneous Receipts

     110        217  
  

 

 

    

 

 

 

Total Receipts

     3,827        9,196  

Operating Disbursements

     

Payroll & Benefits / Contractors

     (1,862      (2,787

Inventory

     (1,420      (2,120

Manufacturing and Logistics

     (1      (8

Gross to Net Disbursements

     (11,869      (12,321

Marketing / Commercial Operations

     (3,410      (12,887

Ordinary Course Professionals

     (l      (1

Rent / Facilities / Equipment

     (141      (141

Insurance

     (76      (76

IT / Utilities

     (55      (74

Regulatory and Compliance

     (6      (7

Other G&A

     (182      (218
  

 

 

    

 

 

 

Total Operating Disbursements

     (19,024      (30,640

Operating Cash Flow

     (15,197      (21,444

Reorganization Costs

     

DIP Loan Interest and Fees

     (3      (53

US Trustee Fees

     (121      (121

Restructuring Professional Fees

     (439      (439
  

 

 

    

 

 

 

Total Reorganization Costs

     (562      (612

Total Disbursements

   $ (19,586    $ (31,252
  

 

 

    

 

 

 

Lender Professional Fees

     —          (397

Net Cash Flow

   $ (15,760    $ (22,453

DIP Draw - Cash

     5,600        5,600  
  

 

 

    

 

 

 

Ending Cash Balance (Book)

   $ 4,519      $ 4,519  

Notes:

 

(1) The Schedule of Cash Receipts and Disbursements is presented on a book basis.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: April 1, 2018 - April 30, 2018

MOR - 1a

Schedule of Disbursements by Debtor Entity (1)

For the Period: April 1, 2018 - April 30, 2018

(Unaudited)

 

$ USD ‘000s

Debtor

   April 1, 2018 - April 30, 2018      Cumulative
Since Filing
 

Orexigen Therapeutics, Inc.

   $ 19,586      $ 31,649  
  

 

 

    

 

 

 

Total

   $ 19,586      $ 31,649  

Notes:

 

(1) The Schedule of Disbursements is presented on a book basis.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: April 1, 2018 - April 30, 2018

MOR - 1b

Schedule of Debtor Bank Account Balances (1)

For the Period: April 1, 2018 - April 30, 2018

(Unaudited)

 

$ USD ‘000s

Debtor

  

Bank

   Last Four Digits
Account No.
    

Account Description

   Beginning
Balance
4/1/2018
     Ending
Balance
4/30/2018
 

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      6813      General checking    $ 6      $ 15  

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      1180      Zero-balance lockbox      —          —    

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      3036      Sweep account      7,770        6,310  

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      7307      Utility adequate assurance      10        10  

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      5177      Collateral      100        100  

Orexigen Therapeutics, Inc.

   U.S. Bank      4219      Investment account(2)      7,159        l  

Orexigen Therapeutics, Inc.

   State Street Bank & Trust      2355      Investment account(2)      —          —    

Orexigen Therapeutics, Inc.

   Wells Fargo      3348      Foreign wire transfer account(2)      —          —    

Orexigen Therapeutics, Inc.

   JMP Securities LLC      0041      Investment account(2)      —          —    
           

 

 

    

 

 

 

Total Bank Account Balances

            $ 15,046      $ 6,436  
           

 

 

    

 

 

 

Notes:

 

(1) The Consolidated Schedule of Cash Receipts and Disbursements (MOR-1) and Schedule of Disbursements by Debtor Entity (MOR-1a) represent book balances while MOR-1b represents bank balances. The balances differ primarily due to the bank’s delayed recording of intrabank activity between the general checking and sweep accounts.
(2) Account was closed in April 2018.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: April 1, 2018 - April 30, 2018

MOR - 1c

Schedule of Professional Fees and Expenses Paid

For the Period: April 1, 2018 - April 30, 2018

(Unaudited)

 

                        Month Ended
4/30/18
    Cumulative Since Filing  

Payee

 

Category

 

Payor

  Date     Period Covered     Fees     Expenses     Fees     Expenses  

Retained Professionals

               

Perella Weinberg Partners1

  Debtor Investment Banker   Orexigen Therapeutics, Inc.     4/18/2018       3/12/2018 - 4/30/2018     $ 437,500     $ 1,738     $ 437,500     $ 1,738  

Other Restructuring Professionals

               

Wilmington Trust, National Association

  DIP Administrative Agent   Orexigen Therapeutics, Inc.           $ 50,000     $ —    

Arnold & Porter Kaye Scholer LLP

  DIP Administrative Agent Counsel   Orexigen Therapeutics, Inc.             60,650       —    

Quinn Emanuel Urquhart & Sullivan, LLP

  DIP Lenders Counsel   Orexigen Therapeutics, Inc.             172,846       236  

Brown Rudnick LLP

  DIP Lender Counsel   Orexigen Therapeutics, Inc.             109,548       711  

Whiteford Taylor Preston

  DIP Lenders Local Counsel   Orexigen Therapeutics, Inc.             53,131       140  
         

 

 

   

 

 

   

 

 

   

 

 

 

Total

          $ 437,500     $ 1,738     $ 883,674     $ 2,825  

Notes:

 

(1) The 4/18/2018 Perella Weinberg Partners payment was a clerical error and paid prior to the filing of a fee application. The amount paid will be offset against future fee applications filed.


In re: Orexigen Therapeutics, Inc.

Debtor

  

Case No. 18-10518 (KG)

Reporting Period: April 1, 2018 - April 30, 2018

MOR - 2

Statement of Operations

For the Period: April 1, 2018 - April 30, 2018

(Unaudited)

 

$ USD ‘000s

   April 1, 2018 - April 30, 2018     March 12 - April 30, 2018  

Net product sales

   $ 6,235     $ 12,267  

Cost of product sales

     (1,519     (2,737

Operating expenses:

    

Research and development

     (794     (1,177

Selling, general and administrative

     (10,468     (15,803

Amortization expense of intangible assets

     (661     (1,088
  

 

 

   

 

 

 

Total operating expenses

     (11,923     (18,068
  

 

 

   

 

 

 

Loss from operations

     (7,207     (8,538

Other income/(expense):

    

Interest income

     158       246  

Refundable tax credit(2)

     1,300       1,300  

Interest expense

     (147     (305
  

 

 

   

 

 

 

Total other income (expenses)

     1,311       1,241  
  

 

 

   

 

 

 

Net loss

     (5,897     (7,298

Reorganization expenses(l)

     (3,163     (170,739
  

 

 

   

 

 

 

Net loss

   $ (9,060   $ (178,037
  

 

 

   

 

 

 

Notes:

 

(1) Reorganization expenses includes the write up of the notes to the principle balance and the elimination of the debt discount and debt costs related to the 2013 debt.
(2) Refundable tax credit includes refundable alternative minimum tax as created by the Tax Cuts and Jobs Act.


In re: Orexigen Therapeutics, Inc.

Debtor

  

Case No. 18-10518 (KG)

Reporting Period: April 1, 2018 - April 30, 2018

MOR - 3

Balance Sheet

(Unaudited)

 

     Orexigen Therapeutics, Inc.  

$ USD ‘000s

   As of March 11, 2018      As of April 30, 2018  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 21,372      $ 4,519  

Accounts receivable, net

     19,203        37,579  

Inventory

     8,857        8,161  

Prepaid expenses and other current assets

     6,868        12,586  

Intercompany receivable(2)

     93,353        93,549  
  

 

 

    

 

 

 

Total current assets

     149,653        156,393  

Non-current assets:

     

Property and equipment, net

     543        498  

Investment in Subsidiary(2)

     19,000        19,000  

Intangible assets

     66,566        65,479  

Other long-term assets

     588        1 ,623  

Restricted cash

     100        110  
  

 

 

    

 

 

 

Total assets

   $ 236,450      $ 243,103  
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable (1)

     925        2,965  

DIP Loan

     —          5,600  

Accrued expenses

     3,921        14,139  
  

 

 

    

 

 

 

Total current liabilities:

     4,846        22,704  
  

 

 

    

 

 

 

Total liabilities not subject to compromise

     4,846        22,704  

Total liabilities subject to compromise

     110,381        279,401  

Series Z preferred stock

     3,343        —    

Stockholders’ equity (deficit)

     117,880        (59,002
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity (deficit)

   $ 236,450      $ 243,103  
  

 

 

    

 

 

 

Notes:

 

(1) Accounts payable includes pre-petition amounts approved by the Court and paid post-petition.
(2) Investment in Subsidiary $19m reclassed from Intercompany Receivable at March 11, 2018 to properly align for reporting.


In re: Orexigen Therapeutics, Inc.   Case No. 18-10518 (KG)
Debtor   Reporting Period: April 1, 2018 - April 30, 2018

MOR-4

Summary of Unpaid Post Petition Accounts Payables

As of April 30, 2018

(Unaudited)

 

$ USD ‘000s

 
                   Number of Days Past Due                

Post-Petition Accounts Payable Aging

   Current      0-30      31-60      61-90      Over 90      Total  

Post-Petition Accounts Payable (1)

   $ 2,761      $ 137      $ —        $ —        $ —        $ 2,898  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,761      $ 137      $ —        $ —        $ —        $ 2,898  

Notes:

 

(1) The above figures represent post petition trade payables recorded in the Debtors’ subledger.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: April 1, 2018 - April 30, 2018

MOR-5

Accounts Receivable Aging

As of April 30, 2018

(Unaudited)

 

$ USD ‘000s

 

Accounts Receivable Aging

   Current      0-30 Days      31-60 Days      61-90 Days      91 Days +      Total  

Accounts Receivable, net

   $ 24,097      $ 11,514      $ 1,890      $ 36      $ 42      $ 37,579  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 24,097      $ 11,514      $ 1,890      $ 36      $ 42      $ 37,579  

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 post petition 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   

5. Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.

      x