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Exhibit 99.1

 

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

 

 

 

 

 

Federal Tax I.D. #

47-4626948

 

 

 

 

 

CORPORATE MONTHLY OPERATING REPORT

 

REQUIRED DOCUMENTS

 

FORM NO.

 

DOCUMENT
ATTACHED

 

EXPLANATION
ATTACHED

Schedule of Cash Receipts and Disbursements

 

MOR-1

 

Yes

 

No

Bank Reconciliation (or copies of debtor’s bank reconciliations)

 

MOR-1 (CON’T)

 

Yes

 

No

Copies of bank statements

 

 

 

 

 

 

Cash disbursements journals

 

 

 

 

 

 

Statement of Operations

 

MOR-2

 

Yes

 

No

Balance Sheet

 

MOR-3

 

Yes

 

No

Status of Post-petition Taxes

 

MOR-4

 

Yes

 

No

Copies of IRS Form 6123 or payment receipt

 

 

 

 

 

 

Copies of tax returns filed during reporting period

 

 

 

 

 

 

Summary of Unpaid Accounts Payable

 

MOR-4

 

Yes

 

No

Listing of Aged Accounts Payable

 

 

 

 

 

 

Accounts Receivable Reconciliation and Aging

 

MOR-5

 

Yes

 

No

Payments to Insiders and Professionals

 

MOR-6

 

Yes

 

No

Post Petition Status of Secured Notes

 

MOR-6

 

Yes

 

No

Debtor Questionnaire

 

MOR-7

 

Yes

 

No

 

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/ Michael Kaseta

 

 

Signature of Authorized Individual

 

 

 

 

 

Michael Kaseta

 

October 1, 2018

Printed Name of Authorized Individual

 

Date

 

 

 

Chief Financial Officer

 

 

Title

 

 

 

1



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

 

 

 

 

 

Federal Tax I.D. #

47-4626948

 

LISTING OF DEBTOR ENTITIES & NOTES TO THE MONTHLY OPERATING REPORT

 

GENERAL:

 

The report includes activity from the following debtors (the “Debtors”) and related case numbers:

 

Debtor

 

Federal Tax I.D. # [1]

 

Case
Number

Aralez Pharmaceuticals US Inc.

 

6948

 

18-12425

Aralez Pharmaceuticals Holdings Ltd.

 

5824

 

18-12426

Aralez Pharmaceuticals Management Inc.

 

7166

 

18-12427

Aralez Pharmaceuticals R&D Inc.

 

9731

 

18-12428

Aralez Pharmaceuticals Trading Designed Activity Company

 

1627

 

18-12429

Halton Laboratories LLC

 

9342

 

18-12430

POZEN Inc.

 

7552

 

18-12431

 


General Notes:

[1] Last four digits of entity federal tax I.D. number.

 

On August 10, 2018 (the “Petition Date”), each of the Debtors filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases are jointly administered for procedural purposes only under Aralez Pharmaceuticals US Inc., No. 18-12425 (MG) pursuant to an order entered by the Bankruptcy Court on August 14, 2018 [Docket No. 27]. On August 27, 2018, the United States Trustee for Region 2 (the “U.S. Trustee”) appointed an official committee of unsecured creditors pursuant to section 1102(a) of the Bankruptcy Code [Docket No. 53]. The Debtors continue to operate their business and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

 

The financial information herein has been derived from the books and records of the Debtors. This information, however, has not been subject to certain procedures that would typically be applied to financial information in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and upon application of such procedures, the Debtors believe that the financial information could be subject to changes, which could be material. The information furnished in this report includes primarily normal recurring adjustments, but does not include all adjustments that would typically be made for financial statements prepared in accordance with U.S. GAAP, including but not limited to, adjustments for income tax provisions and related deferred tax asset and liability accounts and certain other asset and liability accounts.

 

The Debtors are filing their consolidated Monthly Operating Report solely for the purposes of complying with the monthly operating reporting requirements applicable in the Debtors’ chapter 11 cases. The financial and supplemental information contained herein is presented on a preliminary and unaudited basis, remains subject to future adjustments and may not comply in all material respects with U.S. GAAP. This Monthly Operating Report should not be relied on by any persons for information relating to current or future financial conditions, events, or performance of any of the Debtors or their affiliates. Financial information presented in this Monthly Operating Report reflects results for Aralez Pharmaceuticals US Inc. and its affiliated debtors.

 

The results of operations contained herein are not necessarily indicative of results that may be expected for any other period or for the full year and may not necessarily reflect the combined results of operations and financial position of the Debtors in the future.

 

The Debtors reserve all rights to amend or supplement this Monthly Operating Report in all respects, as may be necessary or appropriate. Nothing contained in this Monthly Operating Report shall constitute a waiver of any of the Debtors’ rights or an admission with respect to their chapter 11 cases.

 

2



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

 

 

 

 

 

Federal Tax I.D. #

47-4626948

 

NOTES TO THE MONTHLY OPERATING REPORT

 

Notes to MOR-1:

 

Aralez Pharmaceuticals US Inc. makes disbursements on behalf of other Debtor entities.  The amount included in the “cash disbursements” column for Aralez Pharmaceuticals US Inc. represents the disbursements made on behalf of each affiliated Debtor and for itself.

 

Notes to MOR-2 & MOR-3:

 

The information contained in MOR-2 & MOR-3 is provided to fulfill the requirements of the Office of the United States Trustee. All information contained in MOR-2 and MOR-3 is unaudited and subject to future adjustment.

 

Notes to MOR-4:

 

The Debtors have received approval to pay prepetition taxes, fees, including, without limitation, federal, state, and local U.S. taxes and/or Irish taxes as well as regulatory fees and licensing fees incurred in the ordinary course of business that are required to be paid to operate in various states pursuant to the Interim Order signed on 8/14/2018 [Docket No. 38] and Final Order signed on 9/13/2018 [Docket No. 100]. As such, taxes and fees have been paid when due except for amounts that are in dispute, if any.

 

Notes to MOR-5:

 

The Debtors reconcile and age individual customer accounts receivables in the normal course of the Debtors’ operations.

 

Notes to MOR-6:

 

Of the total disbursements shown in the Schedule of Cash Receipts and Disbursements (MOR-1), no payments were made to Professionals.

 

3



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-1: SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

 

CASE NO.

 

CASE NAME

 

CASH RECEIPTS

 

CASH DISBURSEMENTS

 

18-12425

 

Aralez Pharmaceuticals US Inc.

 

$

8,211,362

 

$

3,028,288

 

18-12426

 

Aralez Pharmaceuticals Holdings Ltd.

 

 

 

18-12427

 

Aralez Pharmaceuticals Management Inc.

 

4,344

 

20,530

 

18-12428

 

Aralez Pharmaceuticals R&D Inc.

 

948

 

5,177

 

18-12429

 

Aralez Pharmaceuticals Trading Designed Activity Company

 

2,151,462

 

94,829

 

18-12430

 

Halton Laboratories LLC

 

229

 

9,814

 

18-12431

 

POZEN Inc.

 

165,389

 

1,162

 

 

 

Total Debtors

 

$

10,533,734

 

$

3,159,800

 

 

4



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-1: BANK ACCOUNT RECONCILIATIONS[2]

 

Balance as of 8/31/2018

 

Legal Entity

 

Case Number

 

Bank/Account Description

 

Bank Name

 

Account Number [1]

 

Ending Bank Balance

Aralez Pharmaceuticals US Inc.

 

18-12425

 

Collection and Operating Account

 

Bank of America, N.A.

 

Ending in 1014

 

$10,220,666

Aralez Pharmaceuticals US Inc.

 

18-12425

 

Operating Account

 

Bank of America, N.A.

 

Ending in 5408

 

$0

Aralez Pharmaceuticals US Inc.

 

18-12425

 

Letter of Credit

 

Bank of America, N.A.

 

Ending in 3891

 

$281,660

Aralez Pharmaceuticals Management Inc.

 

18-12427

 

Operating Account

 

Bank of America, N.A.

 

Ending in 0507

 

$0

Aralez Pharmaceuticals R&D Inc.

 

18-12428

 

Operating Account

 

Bank of America, N.A.

 

Ending in 6058

 

$0

Halton Laboratories LLC

 

18-12430

 

Tax Account

 

Bank of America, N.A.

 

Ending in 6653

 

$5,915

POZEN Inc.

 

18-12431

 

Operating Account

 

Bank of America, N.A.

 

Ending in 3766

 

$0

POZEN Inc.

 

18-12431

 

Investment Account

 

U.S. Bank

 

Ending in 4611

 

$18,884

POZEN Inc.

 

18-12431

 

Investment Account

 

J.P. Morgan

 

Ending in 0341

 

$0

Aralez Pharmaceuticals US Inc.

 

18-12425

 

Government Rebate Account

 

Citibank, N.A.

 

Ending in 6701

 

$0

Aralez Pharmaceuticals Trading Designed Activity Company

 

18-12429

 

Operating Account

 

Allied Irish Bank (AIB)

 

Ending in 6584

 

$2,882,497

Aralez Pharmaceuticals Trading Designed Activity Company

 

18-12429

 

Investment Account

 

Allied Irish Bank (AIB)

 

Ending in 6567

 

$0

Aralez Pharmaceuticals Trading Designed Activity Company

 

18-12429

 

Operating Account

 

Allied Irish Bank (AIB)

 

Ending in 6028

 

12,093 euros

Aralez Pharmaceuticals Holdings Ltd.

 

18-12426

 

Operating Account

 

Allied Irish Bank (AIB)

 

Ending in 8285

 

$2,645

Aralez Pharmaceuticals Holdings Ltd.

 

18-12426

 

Investment Account

 

Allied Irish Bank (AIB)

 

Ending in 7067

 

$0

Aralez Pharmaceuticals Holdings Ltd.

 

18-12426

 

Operating Account

 

Allied Irish Bank (AIB)

 

Ending in 7069

 

59 euros

 


Notes:

[1] Last four digits of account number.

[2] Information is presented above for the Debtors’ bank accounts. Balances are as of August 31, 2018.  Copies of Bank Statements and Cash Disbursement journals were not included with the MOR. These items will be made available upon request.

 

5



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-2: STATEMENT OF OPERATIONS [1]

 

Please refer to attached Statement of Operations contained within the appendix at the end of this document.

 


Notes:

[1] The financial statements contained in this exhibit are unaudited. While the Debtors have made every reasonable effort to ensure that these financial statements are accurate and complete based upon information that was available at the time of preparation, the subsequent receipt of information may result in material changes in the data contained in these financial statements, and inadvertent errors or omissions may exist. To the extent the Debtors discover additional information that may differ materially from the information set forth in the financial statements contained herein, the Debtors reserve all rights to amend, supplement or otherwise modify this Monthly Operating Report as they deem necessary or appropriate.

 

6



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-3: BALANCE SHEET [1]

 

Please refer to attached Balance Sheet contained within the appendix at the end of this document.

 


Notes:

[1] The financial statements contained in this exhibit are unaudited. While the Debtors have made every reasonable effort to ensure that these financial statements are accurate and complete based upon information that was available at the time of preparation, the subsequent receipt of information may result in material changes in the data contained in these financial statements, and inadvertent errors or omissions may exist. To the extent the Debtors discover additional information that may differ materially from the information set forth in the financial statements contained herein, the Debtors reserve all rights to amend, supplement or otherwise modify this Monthly Operating Report as they deem necessary or appropriate.

 

7



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-4: STATUS OF POST-PETITION TAXES

 

 

 

Existing Tax
Liability

 

Amount
Withheld and/or
Accrued

 

Amount Paid
and/or (Refunds
Received)

 

Ending Tax

 

U.S. State Taxes

 

$

996,778

 

$

 

$

2,168

 

$

998,947

 

U.S. Federal Taxes

 

(498,766

)

 

 

(498,766

)

U.S. Local Taxes

 

(33,990

)

 

 

(33,990

)

Irish Taxes

 

 

 

 

 

Other Taxes and Fees incl. NYC Rent Tax

 

 

 

 

 

Payroll Taxes

 

(52,398

)

(158,206

)

100,899

 

(109,705

)

Total Taxes

 

$

411,624

 

$

(158,206

)

$

103,068

 

$

356,485

 

 

SUMMARY OF UNPAID POST-PETITION DEBTS[1]

 

 

 

Number of Days Past Due

 

 

 

Current

 

0-30

 

31-60

 

61-90

 

Total

 

Combined

 

$

2,816

 

$

12,130

 

$

 

$

 

$

14,946

 

 


Notes:

[1] The Debtors’ Summary of Unpaid Post-Petition Debts includes invoices received prior to and after the petition date. The invoices are aged from the date the invoices were received.

 

8



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-5: ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

 

Please refer to attached accounts receivable and aging schedule contained within the appendix.

 

9



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-6: PAYMENTS TO INSIDERS

 

PAYMENTS TO INSIDERS

 

Name

 

Type of Payment

 

Amount Paid

 

Total Paid to Date

 

Adrian Adams

 

Bi-weekly Payroll, Expense Reimbursement, Retirement Match, Medical/Dental/Vision, Insurance Premiums

 

$

59,630

 

$

59,630

 

Jennifer Armstrong

 

Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums

 

$

24,278

 

$

24,278

 

Scott Charles

 

Medical/Dental/Vision

 

$

2,218

 

$

2,218

 

Chris Freeland

 

Bi-weekly Payroll, Expense Reimbursement, Retirement Match, Medical/Dental/Vision, Insurance Premiums

 

$

22,274

 

$

22,274

 

Michael Kaseta

 

Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums

 

$

27,069

 

$

27,069

 

Andrew Koven

 

Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums

 

$

33,857

 

$

33,857

 

Redacted

 

Professional Fees

 

$

1,444

 

$

1,444

 

Sanjay Subramanian

 

Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums

 

$

18,260

 

$

18,260

 

Eric Trachtenberg

 

Medical/Dental/Vision

 

$

3,080

 

$

3,080

 

James Tursi

 

NJ DBA Premium

 

$

26

 

$

26

 

Redacted

 

Monthly Payroll, Car Allowance, Expense Reimbursement, Retirement Match

 

$

27,066

 

$

27,066

 

 

 

 

 

 

 

 

 

Total Payments To Insiders[1]

 

 

 

$

219,203

 

$

219,203

 

 


Notes:

[1] The Debtors define “insiders” to include directors and officers of the Debtor entities. The Debtors do not take any position with respect to: (a) such person’s influence over the control of the Debtors; (b) the management responsibilities or functions of such individual; (c) the decision-making or corporate authority of such individual; or (d) whether such individual could successfully argue that he or she is not an “insider” under applicable law, including the federal securities laws, or with respect to any theories of liability or for any other purpose.

 

10



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-6: PAYMENTS TO PROFESSIONALS

 

PAYMENTS TO PROFESSIONALS

 

Name

 

Amount Paid During Month

 

Total Paid To Date

 

Willkie Farr & Gallagher LLP

 

$

0

 

$

0

 

Alvarez & Marsal Healthcare Industry Group, LLC

 

$

0

 

$

0

 

Moelis & Company

 

$

0

 

$

0

 

Prime Clerk LLC

 

$

0

 

$

0

 

RSM US LLP

 

$

0

 

$

0

 

Brown Rudnick LLP

 

$

0

 

$

0

 

Dundon Advisers LLP

 

$

0

 

$

0

 

Berkeley Research Group

 

$

0

 

$

0

 

McMillan LLP

 

$

0

 

$

0

 

Katten Muchin Rosenman LLP

 

$

0

 

$

0

 

Total Payments To Professionals

 

$

0

 

$

0

 

 

MOR-6: DIP Financing (Term Loan) - Period to Date

 

Name of Creditor

 

Beginning Balance

 

Additional Draws

 

Paydowns

 

Ending Balance

 

DIP Term Loan Financing

 

$

5,000,000

 

$

 

$

 

$

5,000,000

 

 

Summary of the DIP Financing:

 

The DIP financing is in the form of a multi-draw senior secured super-priority term loan up to an aggregate principal of $5 million.

 

11



 

In re

ARALEZ PHARMACEUTICALS US INC., ET AL.,

Case No.

18-12425 (MG)

 

Debtors

 

 

 

 

Reporting Period:

8/10/18 to 8/31/18

 

MOR-7: DEBTOR QUESTIONNAIRE

 

Must be completed each month. If the answer to any of the questions is
“Yes”, provide a detailed explanation of each item. Attach additional sheets if
necessary.

 

Yes

 

No

Have any assets been sold or transferred outside the normal course of business this reporting period?

 

 

 

X

Have any funds been disbursed from any account other than a debtor in possession account this reporting period?

 

 

 

X

Is the Debtor delinquent in the timely filing of any post-petition tax returns?

 

 

 

X

Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?

 

 

 

X

Is the Debtor delinquent in paying any insurance premium payment?

 

 

 

X

Have any payments been made on pre-petition liabilities this reporting period?

 

X[1]

 

 

Are any post petition receivables (accounts, notes or loans) due from related parties?

 

 

 

X

Are any post petition payroll taxes past due?

 

 

 

X

Are any post petition State or Federal income taxes past due?

 

 

 

X

Are any post petition real estate taxes past due?

 

 

 

X

Are any other post petition taxes past due?

 

 

 

X

Have any pre-petition taxes been paid during this reporting period?

 

X[1]

 

 

Are any amounts owed to post petition creditors delinquent?

 

X[2]

 

 

Are any wage payments past due?

 

 

 

X

Have any post petition loans been received by the Debtor from any party?[3]

 

 

 

X

Is the Debtor delinquent in paying any U.S. Trustee fees?

 

 

 

X

Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?

 

 

 

X

Have the owners or shareholders received any compensation outside of the normal course of business?

 

 

 

X

 


Notes:

[1] Pursuant to the relief requested under “First Day Motions” and their respective interim and final first day orders, certain payments have been made on prepetition obligations (e.g. Employee Wages [Docket No. 26 & 97],  Taxes and Regulatory Fees [Docket No. 38 & 100], and Foreign Vendors [Docket No. 36 & 96]).

[2] Please refer to MOR-4 for a summary of the unpaid post-petition debts.

[3] The debtors received DIP financing in the form of a multi-draw senior secured super-priority team loan in the aggregate principal of $5 million as reflected on MOR-6.

 

12



 

ARALEZ PHARMACEUTICALS US INC., ET AL.,

 

(Debtors in Possession)

 

Monthly Operating Report Appendix

 

For the Period ended August 31, 2018

 



 

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

 

(UNAUDITED)

 

 

Page

 

 

Unaudited Financial Statements

 

 

 

Condensed Consolidated Balance Sheet

3

 

 

Condensed Consolidated Statement of Operations

4

 

 

Notes to Condensed Consolidated Financial Statements

5

 

 

Accounts Receivable Aging Schedule

6

 

These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2



 

U.S. BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

ARALEZ PHARMACEUTICALS US INC., et al.,

(Debtors in Possession)

 

CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

ASSETS

 

 

 

Current Assets:

 

 

 

Cash

 

$

13,034,146

 

Accounts Receivable, net

 

28,782,195

 

Inventory

 

3,069,202

 

Prepaid and Other Assets

 

1,275,351

 

Intercompany Receivables

 

446,301,103

 

Total Current Assets

 

492,461,996

 

 

 

 

 

Property, Plant and Equipment, net of accumulated depreciation

 

289,523

 

Goodwill

 

4,978,596

 

Intangible assets at cost, net of accumulated amortization

 

220,425,301

 

Investment in Subsidiary

 

170,640,701

 

Other Long Term Assets

 

4,570,368

 

Total Assets

 

$

893,366,485

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current Liabilities:

 

 

 

Accounts Payable

 

$

3,181,459

 

Accrued Expenses

 

48,120,034

 

Short-Term Contingent Consideration

 

10,294,355

 

Other Current Liabilities

 

888,777

 

Intercompany Payables

 

587,814,230

 

Total Current Liabilities

 

650,298,854

 

 

 

 

 

Long-Term Contingent Consideration

 

61,319,986

 

Other Long Term Liabilities

 

4,172,076

 

Total Liabilities

 

715,790,917

 

 

 

 

 

Shareholders’ Equity

 

177,575,568

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

893,366,485

 

 

These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3



 

U.S. BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

ARALEZ PHARMACEUTICALS US INC., et al.,

(Debtors in Possession)

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

For the Period
August 10, 2018 through
August 31, 2018

 

Revenues:

 

 

 

Net Sales

 

4,510,478

 

Other Revenues

 

903,796

 

Total Net Revenue

 

5,414,274

 

 

 

 

 

Costs and Expenses:

 

 

 

Cost of Product Revenues

 

2,023,291

 

Gross Margin

 

3,390,983

 

 

 

 

 

Operating Expenses:

 

 

 

Selling, General and Administrative

 

2,650,849

 

Research and Development

 

290,004

 

Leaseholder Improvements and Fixed Asset Write-off

 

1,833,049

 

Other Operating Expenses

 

(91,427

)

Total Costs and Expenses

 

4,682,475

 

 

 

 

 

Income / (Loss) from operations

 

(1,291,492

)

Other Income / (Expense), net

 

703,890

 

Earnings / (Loss) before incoming taxes

 

(587,602

)

Income Tax Expense

 

 

Net Income / (Loss)

 

(587,602

)

 

These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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U.S. BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

ARALEZ PHARMACEUTICALS US INC., et al.,

(Debtors in Possession)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1.     BASIS OF PRESENTATION

 

The accompanying condensed consolidated financial statements of the Debtors have been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Code (referred to herein as the “Monthly Operating Report”). The Monthly Operating Report is limited in scope, covers a limited time period and the schedules contained herein were not audited or reviewed by independent accountants nor are they intended to reconcile to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. The Debtors reserve all rights to supplement or amend any scheduled contained in this Monthly Operating Report.

 

The information presented herein is subject to further review and potential adjustments, and has not been subject to all procedures that would typically be applied to financial information presented in accordance with Generally Accepted Accounting Principles in the United States of America (“US GAAP”), including, but not limited to, accruals, tax provision and other recurring adjustments considered necessary by management to fairly state the financial position and results of operations for the interim period(s) presented. Furthermore, the Monthly Operating Report does not contain all disclosures that would be required for presentation with US GAAP and there can be no assurance that, from the perspective of an investor or potential investor, the Monthly Operating Report is complete. As part of their restructuring efforts, the Debtors are reviewing their assets and liabilities on an ongoing basis, including without limitation with respect to intercompany claims and obligations, and nothing contained in this Monthly Operating Report shall constitute a waiver of any of the Debtors’ rights with respect to such assets, liabilities, claims and obligations that may exist.

 

The Debtors’ condensed consolidated financial statements presented herein have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. Furthermore, the condensed consolidated financial statements contained herein have been prepared following the guidance in Financial Accounting Standards Codification 852 “Reorganizations.” The Debtors continue to analyze and reconcile the liabilities reflected on the balance sheet, and, therefore, the amounts reflected herein are current estimates and subject to change as additional analysis and decisions are completed.

 

The Debtors caution readers not to place undue reliance upon the information contained in this Monthly Operating Report. The results herein are not necessarily indicative of results which may be expected from any other period or for the full year and may not necessarily reflect the combined results and financial position of the Debtors in the future.

 

These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5



 

U.S. BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

ARALEZ PHARMACEUTICALS US INC., et al.,

(Debtors in Possession)

 

ACCOUNTS RECEIVABLE AGING SCHEDULE

AUGUST 31, 2018

(UNAUDITED)

 

Current accounts receivable

 

$

44,839,951

 

 

 

 

 

Past due:

 

 

 

1 - 30 Days

 

460,950

 

31 - 60 Days

 

81,603

 

61 - 90 Days

 

166,033

 

Over 90 Days

 

63,038

 

Total gross accounts receivable

 

45,611,576

 

 

 

 

 

Reserve for Chargebacks

 

15,853,430

 

Reserve for Cash Discounts

 

720,141

 

Reserve for Sales Cutoff

 

255,810

 

Total accounts receivable reserves

 

16,829,381

 

 

 

 

 

Accounts receivable, net

 

$

28,782,195

 

 

These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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