Exhibit 99.1
THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
| x | |||
In re:
DENDREON CORPORATION, et al.,
Debtors.1 | : : : : : : : : |
Chapter 11
Case No. 14-12515 (PJW)
Jointly Administered | ||
| x |
NOTICE OF FILING OF DEBTORS’ MONTHLY OPERATING REPORT
FOR THE PERIOD OF DECEMBER 2014
PLEASE TAKE NOTICE that the above-captioned debtors and debtors in possession (collectively, the “Debtors”) have filed with the United States Bankruptcy Court for the District of Delaware the Debtors’ Monthly Operating Report for the Period of December 2014,
| 1 | The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: Dendreon Corporation (3193), Dendreon Holdings, LLC (8047), Dendreon Distribution, LLC (8598) and Dendreon Manufacturing, LLC (7123). The address of the Debtors’ corporate headquarters is 1301 2nd Avenue, Seattle, Washington 98101. |
attached hereto asExhibit A (the “Monthly Operating Report”).
Dated: Wilmington, Delaware
January 20, 2015
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
/s/ Sarah E. Pierce Anthony W. Clark (I.D. No. 2051) Sarah E. Pierce (I.D. No. 4648) One Rodney Square P.O. Box 636 Wilmington, Delaware 19899-0636 Telephone: (302) 651-3000 Fax: (302) 651-3001
- and -
Kenneth S. Ziman Raquelle L. Kaye Four Times Square New York, New York 10036-6522 Telephone: (212) 735-3000 Fax: (212) 735-2000
- and -
Felicia Gerber Perlman 155 N. Wacker Drive Chicago, Illinois 60606-1720 Telephone: (312) 407-0700 Fax: (312) 407-0411
Counsel for Debtors and Debtors in Possession |
2
EXHIBIT A
MONTHLY OPERATING REPORT
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
| In re DENDREON CORPORATION, et. al | Case No. 14-12515_(LSS) | |||||
| Reporting Period: | December 2014 | |||||
| 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 | ||||||
Bank Reconciliation (or copies of debtor’s bank reconciliations) | MOR-1a | X | ||||||
Schedule of Professional Fees Paid | MOR-1b | X | ||||||
Copies of bank statements | X | |||||||
Cash disbursements journals | X | |||||||
Statement of Operations | MOR-2 | X | ||||||
Balance Sheet | MOR-3 | X | ||||||
Status of Postpetition Taxes | MOR-4 | X | ||||||
Copies of IRS Form 6123 or payment receipt | ||||||||
Copies of tax returns filed during reporting period | ||||||||
Summary of Unpaid Postpetition Debts | MOR-5 | X | ||||||
Listing of aged accounts payable | MOR-5 | X | ||||||
Accounts Receivable Reconciliation and Aging | MOR-6 | X | ||||||
Debtor Questionnaire | MOR-7 | 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.
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| Signature of Debtor | Date | |||
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| Signature of Joint Debtor | Date | |||
/s/ Gregory R. Cox |
January 20, 2014 | |||
| Signature of Authorized Individual* | ||||
Gregory R. Cox |
Interim Chief Financial Officer | |||
| 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
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Notes to the MOR:
This Monthly Operating Report (“MOR”) has been prepared solely for the purpose of complying with the monthly reporting requirements applicable in the Bankruptcy Case and is in a format acceptable to the U.S. Trustee. The financial information contained herein is limited in scope and covers a limited time period. Moreover, such information is preliminary and unaudited, and is not prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States. Accordingly, this MOR should not be used for investment purposes.
The financial statements presented in MOR-2 and MOR-3 are prepared on a consolidated company basis for the Debtors and non-debtor affiliates.
Page 2 of 13
1. SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
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($ 000s)
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| For the period 11/29/14 - 1/2/151 | Dendreon | Dendreon | Dendreon | Dendreon | ||||||||||||||||||||
| Consolidated | Corporation | Holdings | Distribution | Manufacturing | ||||||||||||||||||||
Beginning Cash Balance2 | $ | 100,952 | $ | 100,952 | $ | - | $ | - | $ | - | ||||||||||||||
Total Cash Receipts | 32,446 | 796 | - | 31,649 | - | |||||||||||||||||||
Total Cash Disbursements3 | (17,683 | ) | (17,683 | ) | - | - | - | |||||||||||||||||
Intercompany Transfer From / (To) Other Debtors | - | 31,649 | - | (31,649 | ) | - | ||||||||||||||||||
Intercompany Transfer From / (To) Non-Debtors
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Net Cash Flow
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| 14,762
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| 14,762
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Ending Cash Balance2 | $ | 115,714 | $ | 115,714 | $ | - | $ | - | $ | - | ||||||||||||||
Notes:
1. 1/2/15 represents last day of Debtors’ December weekly cash forecast
2. Excludes restricted cash accounts
3. Cash Disbursements include payroll that was disbursed by Dendreon Corporation through its centralized cash management system for the benefit of subsidiary debtors. Accordingly, disbursement amounts (for the purposes of calculating US Trustee fees) are as follows:
Debtor | Amounts | |||||||
Dendreon Corporation | 13,278 | |||||||
Dendreon Holdings | - | |||||||
Dendreon Distribution | 1,864 | |||||||
Dendreon Manufacturing | 2,541 | |||||||
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| $ | 17,683 | |||||||
Page 3 of 13
1a. BANK RECONCILIATION (OR COPIES OF DEBTORS’ BANK RECONCILIATIONS)
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| As of 12/31/14 | ||||||||||||||||||||||
| Restricted Cash Accounts | ||||||||||||||||||||||
| Bank | U.S. Bank | Morgan Stanley Smith Barney | U.S. Bank1 | U.S. Bank | Wells Fargo | |||||||||||||||||
| Description | Operating Account | Investment Account | Payroll Account | Escrow Account | LC Account | |||||||||||||||||
Bank Balance | $ | 36,942,055 | $ | 79,569,680 | $ | 87,255 | $ | 214,380 | $ | 5,206,211 | ||||||||||||
(+) Deposits in Transit | - | - | - | - | - | |||||||||||||||||
(-) Outstanding Checks | (519,884) | - | (12,427) | - | - | |||||||||||||||||
Other | - | - | - | - | - | |||||||||||||||||
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Book Balance | $ | 36,422,171 | $ | 79,569,680 | $ | 74,828 | $ | 214,380 | $ | 5,206,211 | ||||||||||||
Notes:
1. Account opened during postpetition period
Page 4 of 13
1b. SCHEDULE OF PROFESSIONAL FEES PAID
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For the period 12/1/14 - 12/31/14, no payments were made to retained professionals
Page 5 of 13
1c. COPIES OF BANK STATEMENTS
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The Debtors’ bank statements are voluminous and not included herein, but copies will be provided upon request
Page 6 of 13
1d. CASH DISBURSEMENTS JOURNALS
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The Debtors’ cash disbursement journals are voluminous and not included herein, but copies will be provided upon request
Page 7 of 13
2. STATEMENT OF OPERATIONS
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| ($ 000s) |
| For the period 12/1/14 - 12/31/14 | Consolidated1 | Dendreon Corporation | Dendreon Holdings | Dendreon Distribution | Dendreon Manufacturing | |||||||||||||||||||
Product Revenue, net | $ | 28,765 | $ | 28,765 | $ | - | $ | - | $ | - | ||||||||||||||
Royalty and Other Revenue | 12 | 12 | - | - | - | |||||||||||||||||||
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Total Revenue | $ | 28,777 | $ | 28,777 | $ | - | $ | - | $ | - | ||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||
Cost Of Product Revenue | 12,478 | 12,478 | - | - | - | |||||||||||||||||||
Inventory Impairment / (Recovery) | - | - | - | - | - | |||||||||||||||||||
Research and Development | 4,979 | 4,979 | - | - | - | |||||||||||||||||||
Selling, General and Administrative | 10,339 | 10,339 | - | - | - | |||||||||||||||||||
Less: Payroll Expense Included In Categories Above2 | (5,836 | ) | (5,836 | ) | - | - | - | |||||||||||||||||
Payroll Expense2,3 | 5,836 | 1,431 | - | 1,864 | 2,541 | |||||||||||||||||||
Restructuring | 5,566 | 5,566 | - | - | - | |||||||||||||||||||
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Total Operating Expenses | $ | 33,362 | $ | 28,957 | $ | - | $ | 1,864 | $ | 2,541 | ||||||||||||||
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Income / (Loss) from Operations | $ | (4,585 | ) | $ | (180 | ) | $ | - | $ | (1,864 | ) | $ | (2,541 | ) | ||||||||||
Other Income / (Expense): | ||||||||||||||||||||||||
Interest Income | 39 | 39 | - | - | - | |||||||||||||||||||
Interest Expense | (413 | ) | (413 | ) | - | - | - | |||||||||||||||||
Other Income / (Expense) | (1 | ) | (1 | ) | - | - | - | |||||||||||||||||
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Net Income / (Loss) | $ | (4,960 | ) | $ | (555 | ) | $ | - | $ | (1,864 | ) | $ | (2,541 | ) | ||||||||||
Notes:
1. The Debtors maintain their accounting records and prepare financial statements on a consolidated basis only. This modified presentation reflects cash basis payroll of the subsidiary entities, which is funded by Dendreon Corp.
2. The Debtors’ consolidated statement of operations reflects an allocation of payroll expenses among several operating expense categories (i.e., Cost of Product Revenue, R&D and SG&A). For the purpose of presenting payroll by entity without double-counting of such expenses, the cash basis payroll must be deducted before being included separately
3. Payroll Expense (noted above) includes payroll, payroll taxes and 401(k). These amounts are funded to ADP via the US Bank Operating account. For taxation purposes, each legal entity pays separate state employment taxes for the states in which it operates
Page 8 of 13
3. BALANCE SHEET
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| ($ 000s) |
| As of 12/31/14 | |||||
| Consolidated1 | |||||
Current Assets: | |||||
Cash and Cash Equivalents | $ | 101,480 | |||
Short-Term Investments | 15,080 | ||||
Trade Accounts Receivable | 27,649 | ||||
Inventory | 61,617 | ||||
Prepaid Expenses and Other Current Assets | 25,149 | ||||
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Total Current Assets | $ | 230,975 | |||
Property and Equipment, net | 102,410 | ||||
Long-Term Investments | 5,179 | ||||
Other Assets | 4,219 | ||||
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Total Assets | $ | 342,783 | |||
Current Liabilities2: | |||||
Accounts Payable | $ | 6,275 | |||
Accrued Liabilities | 25,334 | ||||
Accrued Compensation | 18,978 | ||||
Restructuring Liability | 6,932 | ||||
Current Portion of Capital Lease Obligations | 2,395 | ||||
Current Portion of Facility Lease Obligations | 699 | ||||
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Total Current Liabilities | $ | 60,614 | |||
Long-Term Liabilities2: | |||||
Long-Term Accrued Liabilities | 5,794 | ||||
Capital Lease Obligations, Less Current Portion | 963 | ||||
Facility Lease Obligations, Less Current Portion | 9,362 | ||||
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Total Long-Term Liabilities | $ | 16,120 | |||
Liabilities Subject to Compromise2: | |||||
Accounts Payable | 5,284 | ||||
Convertible Senior Notes due 2016, Net of Discount | 583,533 | ||||
Other2 | TBD | ||||
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Total Liabilities Subject to Compromise | $
| 588,817
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Total Liabilities | $ | 665,551 | |||
Stockholders’ Equity: | |||||
Common Stock | 155 | ||||
Additional Paid-In Capital | 2,004,520 | ||||
Accumulated Other Comprehensive Income | (2 | ) | |||
Accumulated Deficit | (2,327,440 | ) | |||
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Total Stockholders’ Equity (Deficit) | $
| (322,768
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Total Liabilities and Stockholders’ Equity | $ | 342,783 | |||
Notes: 1. The Debtors maintain their accounting records and prepare financial statements on a consolidated basis only
2. The Debtors are currently working to determine the proper balance and reporting for Liabilities Subject to Compromise. Once determined, certain liabilities are likely to be reclassified from Current and Long-Term Liabilities to Liabilities Subject to Compromise | ||
Page 9 of 13
4. STATUS OF POSTPETITION TAXES
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All postpetition taxes were current as of 12/31/14 and paid in the ordinary course by the Debtors
Page 10 of 13
5. SUMMARY OF UNPAID POSTPETITION DEBTS
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As of 12/31/14
| Days Outstanding | |||||||||||||||||||||||||
| Total | 1 - 30 | 31 - 60 | 61 - 90 | 91 + | |||||||||||||||||||||
Postpetition Accounts Payable | $ | 6,274,956 | $ | 6,067,607 | $ | 207,349 | $ | - | $ | - | |||||||||||||||
Page 11 of 13
6. ACCOUNTS RECEIVABLE RECONCILLIATION & AGEING
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As of 12/31/14
| Days Outstanding | |||||||||||||||||||||||||
| Total | 1 - 30 | 31 - 60 | 61 - 90 | 91 + | |||||||||||||||||||||
Gross Accounts Receivable | $ | 29,711,026 | $ | 30,754,944 | $ | (1,120,789) | $ | 110,406 | $ | (33,535) | |||||||||||||||
Accounts Receivable Offset - Chargebacks | (2,062,111 | ) | |||||||||||||||||||||||
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Net Accounts Receivable | $ | 27,648,915 | |||||||||||||||||||||||
Page 12 of 13
7. DEBTOR QUESTIONNAIRE
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| 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
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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
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3. Have all postpetition tax returns been timely filed? If no, provide an explanation below
| X
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4. Are workers compensation, general liability and other necessary insurance coverages in effect? If no, provide an explanation below
| X
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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 | |||
Page 13 of 13
DENDREON CORP.
13-Week Cash Flow Forecast
(Dollars in Thousands)
| Actual | Projected | 13-Week Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Week: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | |||||||||||||||||||||||||||||||||||||||||||
| Ending Date: | 1/9/15 | 1/16/15 | 1/23/15 | 1/30/15 | 2/6/15 | 2/13/15 | 2/20/15 | 2/27/15 | 3/6/15 | 3/13/15 | 3/20/15 | 3/27/15 | 4/3/15 | |||||||||||||||||||||||||||||||||||||||||||
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Beginning Book Cash Balance | $ | 115,714 | $ | 113,161 | $ | 116,357 | $ | 116,074 | $ | 116,180 | $ | 113,183 | $ | 110,167 | $ | 94,440 | $ | 94,841 | $ | 93,581 | $ | 92,561 | $ | 89,136 | $ | 93,150 | $ | 115,714 | ||||||||||||||||||||||||||||
RECEIPTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating | $ | 5,665 | $ | 6,350 | $ | 7,120 | $ | 4,005 | $ | 3,887 | $ | 4,275 | $ | 1,892 | $ | 4,572 | $ | 4,773 | $ | 4,698 | $ | 4,560 | $ | 4,973 | $ | 5,198 | $ | 61,968 | ||||||||||||||||||||||||||||
Other | 4 | 15 | 15 | 78 | 99 | 15 | 15 | 68 | 89 | 15 | 15 | 3,155 | 15 | 3,599 | ||||||||||||||||||||||||||||||||||||||||||
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TOTAL RECEIPTS | $ | 5,669 | $ | 6,365 | $ | 7,135 | $ | 4,084 | $ | 3,986 | $ | 4,290 | $ | 1,907 | $ | 4,641 | $ | 4,862 | $ | 4,713 | $ | 4,575 | $ | 8,128 | $ | 5,213 | $ | 65,567 | ||||||||||||||||||||||||||||
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DISBURSEMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payroll | $ | (3,313 | ) | $ | (175 | ) | $ | (3,598 | ) | $ | (177 | ) | $ | (3,452 | ) | $ | (175 | ) | $ | (13,403 | ) | $ | (177 | ) | $ | (3,452 | ) | $ | (175 | ) | $ | (3,487 | ) | $ | (177 | ) | $ | (3,392) | $ | (35,153) | ||||||||||||||||
Occupancy | (113 | ) | (77 | ) | (264 | ) | (997 | ) | (40 | ) | (133 | ) | (292 | ) | (973 | ) | (40 | ) | (141 | ) | (292 | ) | (1,022 | ) | (40) | (4,422) | ||||||||||||||||||||||||||||||
Other Operating | (3,854 | ) | (2,503 | ) | (3,134 | ) | (2,696 | ) | (3,491 | ) | (3,092 | ) | (2,860 | ) | (3,018 | ) | (2,630 | ) | (2,974 | ) | (3,116 | ) | (2,843 | ) | (1,912) | (38,123) | ||||||||||||||||||||||||||||||
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Subtotal | $ | (7,279 | ) | $ | (2,755 | ) | $ | (6,997 | ) | $ | (3,870 | ) | $ | (6,983 | ) | $ | (3,400 | ) | $ | (16,556 | ) | $ | (4,168 | ) | $ | (6,121 | ) | $ | (3,290 | ) | $ | (6,895 | ) | $ | (4,041 | ) | $ | (5,344) | $ | (77,698) | ||||||||||||||||
E.U. Operations | $ | (647 | ) | $ | (414 | ) | $ | (168 | ) | $ | (79 | ) | $ | - | $ | (158 | ) | $ | (618 | ) | $ | (73 | ) | $ | - | $ | (157 | ) | $ | (618 | ) | $ | (73 | ) | $ | - | $ | (3,004) | ||||||||||||||||||
Restructuring & Other | $ | (296 | ) | $ | - | $ | (254 | ) | $ | (30 | ) | $ | - | $ | (3,747 | ) | $ | (460 | ) | $ | - | $ | - | $ | (2,286 | ) | $ | (487 | ) | $ | - | $ | - | $ | (7,560) | |||||||||||||||||||||
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TOTAL DISBURSEMENTS | $ | (8,222 | ) | $ | (3,169 | ) | $ | (7,418 | ) | $ | (3,978 | ) | $ | (6,983 | ) | $ | (7,306 | ) | $ | (17,634 | ) | $ | (4,240 | ) | $ | (6,121 | ) | $ | (5,733 | ) | $ | (8,000 | ) | $ | (4,114 | ) | $ | (5,344) | $ | (88,262) | ||||||||||||||||
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NET CASH FLOW | $ | (2,553 | ) | $ | 3,196 | $ | (283 | ) | $ | 105 | $ | (2,997 | ) | $ | (3,016 | ) | $ | (15,726 | ) | $ | 400 | $ | (1,260 | ) | $ | (1,020 | ) | $ | (3,425 | ) | $ | 4,014 | $ | (130) | $ | (22,695) | ||||||||||||||||||||
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Ending Book Cash Balance | $ | 113,161 | $ | 116,357 | $ | 116,074 | $ | 116,180 | $ | 113,183 | $ | 110,167 | $ | 94,440 | $ | 94,841 | $ | 93,581 | $ | 92,561 | $ | 89,136 | $ | 93,150 | $ | 93,019 | $ | 93,019 | ||||||||||||||||||||||||||||
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