Doc 958 Filed 02/28/19 Page
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: Orexigen Therapeutics, Inc.
||Case No. 18-10518 (KG)|
||Reporting Period: January 1, 2019 - January 31, 2019|
Notes to Monthly Operating Report
Debtor in Possession Financial Statements
financial statements and supplemental information presented in this Monthly Operating Report (MOR) have been prepared using the Debtors books and records solely to comply with 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 Debtors 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
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 Debtors chapter 11 case, the payment of certain prepetition indebtedness of the Debtor is subject to compromise or
other treatment under a plan of reorganization.
ASC 852 requires expenses and income directly associated with the Debtors 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 and an estimate of the loss on sale of assets which is pending a valuation.
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 attorneys fees accrued prior to the petition date.
On April 23, 2018, the Debtor
entered into an asset purchase agreement with Nalpropion Pharmaceuticals, Inc. (the Buyer) for the sale of substantially all of its assets through section 363 of the Bankruptcy Code. This transaction was subsequently approved by the
Bankruptcy Court on June 28, 2018. On July 27, 2018, the Debtor closed the sale and transferred substantially all of its assets to the Buyer. As part of the sale, the Debtor entered into a transition services agreement for the post-closing
period through the effective date of a Plan of Liquidation. The Debtors are currently in discussions with their stakeholders to develop and file a Plan of Liquidation in the near term.