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OREXIGEN THERAPEUTICS, INC. filed this Form 8-K on 07/05/2018
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EX-99.1

Exhibit 99.1

Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 1 of 11

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 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 committee appointed in the case.

 

REQUIRED DOCUMENTS

  Form No.   Document
Attached
   Explanation
Attached
    Affidavit/Supplement
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

     

6/28/19

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.


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 2 of 11

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 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 ordinaiy 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

     

6/28/18

Stephen Moglia

Chief Accounting Officer

    Date


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 3 of 11

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 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.


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 4 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR - 1

Consolidated Schedule of Cash Receipts and Disbursements (1)

For the Period: May 1, 2018 - May 31, 2018

(Unaudited)

 

$ USD ‘000s

   May 1, 2018 - May 31, 2018      Cumulative
Since Filing
 

Beginning Cash Balance (Book)

   $ 4,519      $ 21,372  

Receipts

     

Operating Receipts

     24,980        33,959  

Miscellaneous Receipts

     13        230  
  

 

 

    

 

 

 

Total Receipts

     24,993        34,189  

Operating Disbursements

     

Payroll & Benefits / Contractors

     (3,682      (6,469

Inventory

     (146      (2,266

Manufacturing and Logistics

     (69      (77

Gross to Net Disbursements

     (7,620      (19,941

Marketing / Commercial Operations

     (1,482      (14,370

Ordinary Course Professionals

     (286      (287

Rent / Facilities / Equipment

     (139      (279

Insurance

     (76      (152

IT / Utilities

     (100      (174

Regulatory and Compliance

     (280      (287

Other G&A

     (186      (405
  

 

 

    

 

 

 

Total Operating Disbursements

     (14,066      (44,705

Operating Cash Flow

     10,927        (10,516 ) 

Reorganization Costs

     

DIP Loan Interest and Fees

     (233      (286

US Trustee Fees

     —          (121

Restructuring Professional Fees

     —          (439
  

 

 

    

 

 

 

Total Reorganization Costs

     (233      (846

Total Disbursements

   $ (14,299    $ (45,551
  

 

 

    

 

 

 

Lender Professional Fees

     (103      (501

Net Cash Flow

   $ 10,591      $ (11,863

DIP Draw - Cash

     2,000        7,600  
  

 

 

    

 

 

 

Ending Cash Balance (Book)

   $ 17,109      $ 17,109  

Notes:

 

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


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 5 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR - 1a

Schedule of Disbursements by Debtor Entity (1)

For the Period: May 1, 2018 - May 31, 2018

(Unaudited)

 

$ USD ‘000s

Debtor

   May 1, 2018 - May 31, 2018      Cumulative
Since Filing
 

Orexigen Therapeutics, Inc.

   $ 14,402      $ 46,052  
  

 

 

    

 

 

 

Total

   $ 14,402      $ 46,052  

Notes:

 

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


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 6 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR - 1b

Schedule of Debtor Bank Account Balances (1)

For the Period: May 1, 2018 - May 31, 2018

(Unaudited)

 

$ USD ‘000s

Debtor

  

Bank

   Last Four Digits
Account No.
    

Account Description

   Beginning
Balance
5/1/2018
     Ending
Balance
5/31/2018
 

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      6813      General checking    $ —        $ 2  

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      1180      Zero-balance lockbox      —          —    

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      3036      Sweep account      11,072        17,301  

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      7307      Utility adequate assurance      —          10  

Orexigen Therapeutics, Inc.

   Silicon Valley Bank      5177      Collateral      100        100  

Orexigen Therapeutics, Inc.

   U.S. Bank      4219      Investment account(2)      11,577        —    

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

            $ 22,749      $ 17,413  
           

 

 

    

 

 

 

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.


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 7 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR - 1c

Schedule of Professional Fees and Expenses Paid

For the Period: May 1, 2018 - May 31, 2018

(Unaudited)

 

                        Month Ended
5/31/18
    Cumulative Since Filing  

Payee

 

Category

 

Payor

  Date     Period Covered     Fees     Expenses     Fees     Expenses  

Retained Professionals

               

Perella Weinberg Partners1

  Debtor Investment Banker   Orexigen Therapeutics, Inc.           $ 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.     5/11/2018       3/1/2018 - 3/31/2018     $ 25,333     $ 786       134,881       1,497  

Whiteford Taylor Preston

  DIP Lenders Local Counsel   Orexigen Therapeutics, Inc.     5/18/2018       3/1/2018 - 3/31/2018       75,959       1,243       129,090    
        5/29/2018       4/1/2018 - 4/30/2018             1,383  
         

 

 

   

 

 

   

 

 

   

 

 

 

Total

          $  101,292     $ 2,029     $ 984,966     $ 4,855  

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.


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 8 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR - 2

Statement of Operations

For the Period: May 1, 2018 - May 31, 2018

(Unaudited)

 

$ USD ‘000s

   May 1, 2018 - May 31, 2018     March 12 - May 31 2018  

Net product sales

   $ 7,895     $ 20,162  

Cost of product sales

     (1,728     (4,465

Operating expenses:

    

Research and development

     (636     (1,813

Selling, general and administrative

     (8,842     (24,645

Amortization expense of intangible assets

     (661     (1,750
  

 

 

   

 

 

 

Total operating expenses

     (10,139     (28,208
  

 

 

   

 

 

 

Loss from operations

     (3,972     (12,511

Other income/(expense):

    

Interest income

     148       394  

Refundable tax credit(2)

     —         1,300  

Interest expense

     (147     (453
  

 

 

   

 

 

 

Total other income (expenses)

     1       1,241  
  

 

 

   

 

 

 

Net loss

     (3,972     (11,269

Reorganization expenses(1)

     (3,800     (174,539
  

 

 

   

 

 

 

Net loss

   $ (7,772   $ (185,808
  

 

 

   

 

 

 

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.


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 9 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR - 3

Balance Sheet

(Unaudited)

 

     Orexigen Therapeutics, Inc.  

$ USD ‘000s

   As of March 11, 2018      As of May 31, 2018  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 21,372      $ 17,109  

Accounts receivable, net

     19,203        30,126  

Inventory

     8,857        7,517  

Prepaid expenses and other current assets

     6,868        6,519  

Intercompany receivable(1)

     93,353        94,060  
  

 

 

    

 

 

 

Total current assets

     149,653        155,331  

Non-current assets:

     

Property and equipment, net

     543        471  

Investment in Subsidiary(1)

     19,000        19,000  

Intangible assets

     66,566        64,817  

Other long-term assets

     588        1,615  

Restricted cash

     100        110  
  

 

 

    

 

 

 

Total assets

   $ 236,450      $ 241,344  
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable (2)

     925        1,181  

DIP loan (3)

     —          8,040  

Accrued expenses

     3,921        18,330  
  

 

 

    

 

 

 

Total current liabilities:

     4,846        27,551  
  

 

 

    

 

 

 

Total liabilities not subject to compromise

     4,846        27,551  

Total liabilities subject to compromise

     110,381        279,881  

Series Z preferred stock

     3,343        —    

Stockholders’ equity (deficit)

     117,880        (66,089 ) 
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity (deficit)

   $ 236,450      $ 241,344  
  

 

 

    

 

 

 

Notes:

 

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


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 10 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR-4

Summary of Unpaid Post Petition Accounts Payables

As of May 31, 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)

   $ 995      $ 155      $ —        $ —        $ —        $ 1,150  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 995      $ 155      $ —        $ —        $ —        $ 1,150  

Notes:

 

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


Case 18-10518-KG    Doc 446    Filed 06/29/18    Page 11 of 11

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: May 1, 2018 - May 31, 2018

 

MOR-5

Accounts Receivable Aging

As of May 31, 2018

(Unaudited)

 

$ USD ‘000s

 

Accounts Receivable Aging

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

Accounts Receivable, net

   $ 26,366      $ 217      $ 3,500      $ 2      $ 41      $ 30,126  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 26,366      $ 217      $ 3,500      $ 2      $ 41      $ 30,126  

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


Case 18-10518-KG    Doc 446-1    Filed 06/29/18    Page 1 of 1

CERTIFICATE OF SERVICE

I, Jose F. Bibiloni, certify that I am not less than 18 years of age, and that service of the foregoing Monthly Operating Report for the reporting period May 1, 2018 – May 31, 2018, was caused to be made on June 29, 2018, in the manner indicated upon the party identified below.

VIA HAND DELIVERY

Attn: Timothy Fox, Esq.

Office of the United States Trustee

J. Caleb Boggs Federal Building

844 North King Street, Suite 2207

Wilmington, DE 19801

 

Dated: June 29, 2018      

          /s/ Jose F. Bibiloni

            Jose F. Bibiloni (No. 6261)