Exhibit 99.1
THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
| - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | x | |||
| : | ||||
| In re: | : | Chapter 11 | ||
| : | ||||
| DENDREON CORPORATION,etal., | : | Case No. 14-12515 (LSS) | ||
| : | ||||
| Debtors.1 | : | Jointly Administered | ||
| : | ||||
| : | ||||
| - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | x |
NOTICE OF FILING OF DEBTORS’ MONTHLY OPERATING REPORT
FOR THE PERIOD OF JANUARY 2015
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 January 2015,
| 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. |
Docket No. 384 Date Filed: 2/13/15 |
attached hereto asExhibit A (the “Monthly Operating Report”).
Dated: Wilmington, Delaware
February 13, 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: January 2015 |
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 | 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.
| ||||||
| Signature of Debtor | Date | |||||
| ||||||
| Signature of Joint Debtor | Date | |||||
| /s/ Gregory R. Cox | February 13, 2015 | |||||
| Signature of Authorized Individual* | ||||||
| Gregory R. Cox | 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.
MOR
(04/07)
NOTES |
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
| ||||||||||||
($ 000s)
| ||||||||||||||||||||||||||||
| For the period 1/3/15 - 1/30/151 | Dendreon | Dendreon | Dendreon | Dendreon | ||||||||||||||||||||||||
| Consolidated | Corporation | Holdings | Distribution | Manufacturing | ||||||||||||||||||||||||
Beginning Cash Balance2 | $ | 115,714 | $ | 115,714 | $ | - | $ | - | $ | - | ||||||||||||||||||
Total Cash Receipts | 27,461 | 405 | - | 27,057 | - | |||||||||||||||||||||||
Total Cash Disbursements3 | (24,516 | ) | (24,516 | ) | - | - | - | |||||||||||||||||||||
Intercompany Transfer From / (To) Other Debtors | - | 27,057 | - | (27,057 | ) | - | ||||||||||||||||||||||
Intercompany Transfer From / (To) Non-Debtors
|
| -
|
|
| -
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Net Cash Flow
| $
| 2,946
|
| $
| 2,946
|
| $
| -
|
| $
| -
|
| $
| -
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending Cash Balance2 | $ | 118,660 | $ | 118,660 | $ | - | $ | - | $ | - | ||||||||||||||||||
Notes:
1.1/30/15 represents last day of Debtors’ January 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 | 18,971 | |||||||
Dendreon Holdings | - | |||||||
Dendreon Distribution | 2,870 | |||||||
Dendreon Manufacturing
|
| 2,674
|
| |||||
|
| |||||||
| $ | 24,516 | |||||||
Page 3 of 13
1a. BANK RECONCILIATION (OR COPIES OF DEBTORS’ BANK RECONCILIATIONS) | ||||||||||
| As of 1/31/15 | ||||||||||
| Restricted Cash Accounts | ||||||||||||||||||||||
Bank Description | U.S. Bank | Morgan Stanley Smith Barney | U.S. Bank1 | U.S. Bank | Wells Fargo | |||||||||||||||||
| �� Operating Account | Investment Account | Payroll Account | Escrow Account | LC Account | ||||||||||||||||||
Bank Balance | $ | 38,692,789 | $ | 79,700,953 | $ | 65,708 | $ | 214,610 | $ | 5,206,518 | ||||||||||||
(+) Deposits in Transit | 1,251,268 | - | - | - | - | |||||||||||||||||
(-) Outstanding Checks | (743,873 | ) | - | (9,183 | ) | - | - | |||||||||||||||
Other | - | (1,186 | ) | - | - | - | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Book Balance | $ | 39,200,183 | $ | 79,699,766 | $ | 56,525 | $ | 214,610 | $ | 5,206,518 | ||||||||||||
Notes:
1. Account opened during postpetition period
Page 4 of 13
| 1b. SCHEDULE OF PROFESSIONAL FEES PAID |
For the period 1/1/15—1/31/15, no payments were made to retained professionals
Page 5 of 13
| 1c. COPIES OF BANK STATEMENTS |
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 |
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 |
| ($ 000s) |
| For the period 1/1/15 - 1/31/15 | Dendreon | Dendreon | Dendreon | Dendreon | ||||||||||||||||||||
| Consolidated1 | Corporation | Holdings | Distribution | Manufacturing | ||||||||||||||||||||
Product Revenue, net
| $
| 21,337
|
| $
| 21,337
|
| $
| -
|
| $
| -
|
| $
| -
|
| |||||||||
Royalty and Other Revenue
|
| -
|
|
| -
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total Revenue
|
$
|
21,337
|
|
$
|
21,337
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
| |||||||||
Operating Expenses:
| ||||||||||||||||||||||||
Cost Of Product Revenue
|
| 11,594
|
|
| 11,594
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Research and Development
|
| 3,337
|
|
| 3,337
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Selling, General and Administrative
|
| 11,513
|
|
| 11,513
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Less: Payroll Expense Included In Categories Above2
|
| (7,706
| )
|
| (7,706
| )
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Payroll Expense2,3
|
| 7,706
|
|
| 2,162
|
|
| -
|
|
| 2,870
|
|
| 2,674
|
| |||||||||
Restructuring
|
| 49
|
|
| 49
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total Operating Expenses
| $
| 26,492
|
| $
| 20,947
|
| $
| -
|
| $
| 2,870
|
| $
| 2,674
|
| |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Income / (Loss) from Operations
|
$
|
(5,155
|
)
|
$
|
390
|
|
$
|
-
|
|
$
|
(2,870
|
)
|
$
|
(2,674
|
)
| |||||||||
Other Income / (Expense):
| ||||||||||||||||||||||||
Interest Income
|
| 5
|
|
| 5
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Interest Expense
|
| (329
| )
|
| (329
| )
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Other Income / (Expense)
|
| 12
|
|
| 12
|
|
| -
|
|
| -
|
|
| -
|
| |||||||||
Reorganization Expense
|
| (3,797
| )
|
| (3,797
| )
|
| -
|
|
| -
|
|
| -
|
| |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Income / (Loss)
| $
| (9,264
| )
| $
| (3,720
| )
| $
| -
|
| $
| (2,870
| )
| $
| (2,674
| )
| |||||||||
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 |
| ($ 000s) | ||
| As of 1/31/15 | ||
| Consolidated1 | ||||
| ||||
Current Assets: | ||||
Cash and Cash Equivalents | $ | 88,449 | ||
Short-Term Investments |
|
36,179 |
| |
Trade Accounts Receivable |
|
22,493 |
| |
Inventory |
|
59,921 |
| |
Prepaid Expenses and Other Current Assets
|
|
23,400
|
| |
|
| |||
Total Current Assets | $ | 230,442 | ||
Property and Equipment, net | 100,648 | |||
Long-Term Investments |
|
- |
| |
Other Assets
|
|
3,592
|
| |
|
| |||
Total Assets | $ | 334,682 | ||
Current Liabilities: | ||||
Accounts Payable | $ | 5,834 | ||
Accrued Liabilities | 8,145 | |||
Accrued Compensation | 19,992 | |||
Restructuring Liability | 11 | |||
Reorganization Liability | 5,334 | |||
Current Portion of Capital Lease Obligations | 29 | |||
Current Portion of Facility Lease Obligations
|
| 13
|
| |
|
| |||
Total Current Liabilities | $ | 39,358 | ||
Long-Term Liabilities: | ||||
Other Long-Term Liabilities | 76 | |||
Liabilities Subject to Compromise2
|
| 627,317
|
| |
|
| |||
Total Liabilities | $ | 666,751 | ||
Stockholders’ Equity: | ||||
Common Stock | 155 | |||
Additional Paid-In Capital | 2,004,479 | |||
Accumulated Other Comprehensive Income | 1 | |||
Accumulated Deficit
|
| (2,336,704
| )
| |
|
| |||
Total Stockholders’ Equity (Deficit) | $
| (332,069
| )
| |
|
| |||
Total Liabilities and Stockholders’ Equity | $ | 334,682 | ||
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 | ||||
Page 9 of 13
4. STATUS OF POSTPETITION TAXES |
All postpetition taxes were current as of 1/31/15 and paid in the ordinary course by the Debtors
Page 10 of 13
5. SUMMARY OF UNPAID POSTPETITION DEBTS |
As of 1/31/15
| Days Outstanding | ||||||||||||||||||||
| Total | 1 - 30 | 31 - 60 | 61 - 90 | 91 + | ||||||||||||||||
Postpetition Accounts Payable | $ | 5,833,977 | $ | 5,833,977 | $ | - | $ | - | $ | - | ||||||||||
Page 11 of 13
6. ACCOUNTS RECEIVABLE RECONCILLIATION & AGEING
| ||||||||||
As of 1/31/15
| Days Outstanding | ||||||||||||||||||
| Total |
1 - 30 |
31 - 60 |
61 - 90 |
91 + | ||||||||||||||
Gross Accounts Receivable |
$ |
24,959,774 |
|
$ |
24,892,696 |
|
$ |
453,616 |
|
$ (426,607) |
$ |
40,069 |
| |||||
Accounts Receivable Offset - Chargebacks
|
| (2,466,801
| )
| |||||||||||||||
|
| |||||||||||||||||
Net Accounts Receivable |
$ |
22,492,974 |
| |||||||||||||||
Page 12 of 13
7. DEBTOR QUESTIONNAIRE |
| 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 postpetition 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 |
Page 13 of 13
DENDREON CORP.
Cash Flow Forecast
(Dollars in Thousands)
| Projected | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Week: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 13-Week | ||||||||||||||||||||||||||||||||||||||||||
Ending Date: | 2/13/15 | 2/20/15 | 2/27/15 | 3/6/15 | 3/13/15 | 3/20/15 | 3/27/15 | 4/3/15 | 4/10/15 | 4/17/15 | 4/24/15 | 5/1/15 | 5/8/15 | Total | ||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Book Cash Balance | $ | 110,654 | $ | 114,027 | $ | 98,677 | $ | 499,714 | $ | 499,684 | $ | 499,684 | $ | 495,981 | $ | 501,187 | $ | 504,157 | $ | 504,157 | $ | 493,592 | $ | 490,542 | $ | 490,512 | $ | 110,654 | ||||||||||||||||||||||||||||
RECEIPTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating 1 | $ | 6,453 | $ | 4,419 | $ | 1,037 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 11,910 | ||||||||||||||||||||||||||||
Other 2 | 15 | 15 | 400,000 | - | - | - | 5,206 | 3,000 | - | - | - | - | - | 408,236 | ||||||||||||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL RECEIPTS | $ | 6,468 | $ | 4,434 | $ | 401,037 | $ | - | $ | - | $ | - | $ | 5,206 | $ | 3,000 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 420,146 | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||
DISBURSEMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payroll 3 | $ | (200 | ) | $ | (13,383 | ) | $ | - | $ | (30 | ) | $ | - | $ | (30 | ) | $ | - | $ | (30 | ) | $ | - | $ | (1,903 | ) | $ | - | $ | (30 | ) | $ | - | $ | (15,606) | |||||||||||||||||||||
Occupancy | (96 | ) | (205 | ) | - | - | - | - | - | - | - | - | - | - | - | (301) | ||||||||||||||||||||||||||||||||||||||||
Other Operating | (2,767 | ) | (2,325 | ) | - | - | - | - | - | - | - | - | - | - | - | (5,092) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | (3,062 | ) | $ | (15,913 | ) | $ | - | $ | (30 | ) | $ | - | $ | (30 | ) | $ | - | $ | (30 | ) | $ | - | $ | (1,903 | ) | $ | - | $ | (30 | ) | $ | - | $ | (20,999) | |||||||||||||||||||||
E.U. Operations | $ | (33 | ) | $ | (654 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (687) | ||||||||||||||||||||||||||
Restructuring & Other 4 | $ | - | $ | (3,217 | ) | $ | - | $ | - | $ | - | $ | (3,673 | ) | $ | - | $ | - | $ | - | $ | (8,662 | ) | $ | (3,050 | ) | $ | - | $ | - | $ | (18,602) | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | $ | (3,095 | ) | $ | (19,784 | ) | $ | - | $ | (30 | ) | $ | - | $ | (3,703 | ) | $ | - | $ | (30 | ) | $ | - | $ | (10,565 | ) | $ | (3,050 | ) | $ | (30 | ) | $ | - | $ | (40,288) | ||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||
NET CASH FLOW | $ | 3,373 | $ | (15,349 | ) | $ | 401,037 | $ | (30 | ) | $ | - | $ | (3,703 | ) | $ | 5,206 | $ | 2,970 | $ | - | $ | (10,565 | ) | $ | (3,050 | ) | $ | (30 | ) | $ | - | $ | 379,858 | ||||||||||||||||||||||
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|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Book Cash Balance | $ | 114,027 | $ | 98,677 | $ | 499,714 | $ | 499,684 | $ | 499,684 | $ | 495,981 | $ | 501,187 | $ | 504,157 | $ | 504,157 | $ | 493,592 | $ | 490,542 | $ | 490,512 | $ | 490,512 | $ | 490,512 | ||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 - | Collections forecast for the week ended 2/27, represent anticipated distributor receipts through the sale close |
| 2 - | Collections in the weeks ended 3/27 and 4/3 represent the recovery of LC collateral and Derivatives Lawsuit proceeds, respectively |
| 3 - | Post sale payroll amounts reflect CEO pay. Additional payroll amounts are possible and subject to estate wind down needs |
| 4 - | Estate wind down costs are not separately forecast, as a large portion of the costs are embedded in professional fees. However, additional estate wind down costs, primarily related to personnel, are anticipated but not reflected in the current forecast |
NOTE:Please note that the cash flow projections contemplate a sale closing during the week ended 2/27/15 under the terms of the Amended and Restated Acquisition Agreement, dated as of February 4, 2015, with Valeant. Also, while the cash flows reflect the continued payment of professional fee in the normal course, the forecast does not include the following items:
• Professionals fees or catch up payments after the week ended 5/8/15
• Certain estate wind down costs (see description in note 4)
• Payment of cure costs or other Retained Liabilities of the Debtors
