Exhibit 99.1
united states bankruptcy court
district of DELAWARE
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MONTHLY OPERATING REPORT
Reporting Period: January 3, 2021 – January 30, 2021
| REQUIRED DOCUMENTS | Form No. | Document Attached | Explanation Attached | Affidavit/ Supplement Attached |
| Schedule of Cash Receipts and Disbursements | MOR-1 | X | X | |
| Bank Account Balances, Debtor Statement with Respect to Bank Account Reconciliations | MOR-1a | X | X | See Attestation |
| Schedule of Professional Fees and Expenses Paid | MOR-1b | X | | |
| Copies of bank statements | | | | See Attestation |
| Cash disbursements journals | | | | See Attestation |
| Statement of Operations by Legal Entity | MOR-2 | X | X | |
| Balance Sheet by Legal Entity | MOR-3 | X | X | |
| Status of Postpetition Taxes | | | | See Attestation |
| Summary of Unpaid Postpetition Debts | MOR-4 | X | | |
| Accounts Receivable Reconciliation and Aging | MOR-5 | X | | |
| Debtor Questionnaire | MOR-5 | X | | |
| Opening Balance Sheet by Legal Entity | Exhibit A | X | | |
| Disbursements by Legal Entity | Exhibit B | 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 | |
| Anthony M. Saccullo | |
| Wind-Down Officer | |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
Notes to the Monthly Operating Report (“MOR”)
Reporting Period: January 3, 2021 – January 30, 2021
General:
The Debtors filed for relief under chapter 11 of title 11 of the United States Code, §§ 101-1532, et seq. on December 3, 2020. Per agreement with the Office of the United States Trustee for the District of Delaware (the “U.S. Trustee”), the Debtors have prepared this monthly operating report on a fiscal month basis (this “MOR”) for the period from January 3, 2021 through January 30, 2021. In addition, the U.S. Trustee has agreed to extend the Debtors’ deadline to file this MOR.
The financial information contained herein is unaudited, limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements applicable in these chapter 11 cases. This MOR is not prepared in accordance with GAAP and does not include all of the information and footnotes required thereby. Additionally, certain transactions that would be required to be included in GAAP financial statements are not reflected in this MOR. There can be no assurance that the financial information presented herein is complete, and readers are strongly cautioned not to place reliance on this MOR, which was not prepared for the purpose of providing the basis for an investment decision relating to the Debtors. The unaudited financial statements have been derived from the books and records of the Debtors. The information furnished in this MOR includes certain normal recurring adjustments, but may not include all the adjustments that would typically be made for the quarterly and annual consolidated financial statements in accordance with GAAP. Furthermore, the monthly financial information contained herein has not been subjected to the same level of accounting review and testing that the Debtors apply in the preparation of its annual financial information in accordance with GAAP. Upon the application of such procedures, the Debtors believe that this financial information may be subject to change, and these changes could be material. The financial information contained herein is presented on a preliminary and unaudited basis and remains subject to future reconciliation and adjustment (which may be material). However, the Debtors are not required to publicly update this MOR to reflect more current facts or estimates, or upon the occurrence of future events, including if the facts, estimates, or assumptions upon which this MOR is based change.
The Debtors entered into an Asset Purchase Agreement to sell substantially all of the Debtors’ assets to Terramar Capital, LLC (the “Buyer”) effective 11:59 p.m. on January 30, 2021 (the “Sale Transaction”). The financial statements represented herein reflect the Sale Transaction. As a result of the sale closing on a Saturday, the purchase consideration from the Sale Transaction are recorded as accounts receivable totaling $17.1 million. On February 1, 2021, the Buyer funded $12.2 million in cash to the Debtors, $3.6 million was placed in escrow, and the remaining $1.25 million is reflected as a promissory note due December 31, 2021.
Notes to MOR-1:
Cash is received and disbursed by the Debtors as described in the Debtors' Motion for Entry of Interim and Final Orders (I) Authorizing Continued Use of the Debtors' Existing Cash Management System, Corporate Credit Card Program and Bank Accounts; (II) Waiving Certain United States Trustee Requirements; (III) Extending Time to Comply with Section 345(b) of the Bankruptcy Code; (IV) Authorizing Continued Performance of Intercompany Transactions; and (V) Granting Related Relief [D.I. 29] and is consistent with the Debtors’ historical cash management practices. Cash receipts and disbursements reflected herein include activity from January 3, 2021 to January 30, 2021. Cash receipts and disbursements were derived from the bank statements and accounting system. Cash receipts and disbursements related to intercompany transfers among the Debtors such as cash concentration account sweeps and expense reimbursements, are excluded from total cash receipts and disbursements set forth in MOR-1. Cash receipts and disbursements include certain intercompany expense transactions.
Notes to MOR-1a:
Amounts listed are the bank balances as of the close of business on January 30, 2021. Copies of the bank statements were not included with this MOR due to the voluminous nature of the statements and are available upon reasonable request in writing to counsel for the Debtors.
Notes to MOR-2 and MOR-3:
This MOR has been prepared on a legal entity basis for the Debtors. The financial statements represented herein reflect the Sale Transaction.
As a result of the Debtors’ chapter 11 filings, the payment of prepetition indebtedness is subject to compromise or other treatment under a plan of reorganization. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Bankruptcy Court actions, payments pursuant to Bankruptcy Court order, further developments with respect to, among other things, the reconciliation and adjudication of claims, determinations of the secured status of certain claims, the value of any collateral securing such claims, rejection of executory contracts, or other events. The determination of how liabilities will ultimately be settled and treated cannot be made until the Bankruptcy Court approves a chapter 11 plan of reorganization. Accordingly, the ultimate amount of such liabilities is not determinable at this time. No assurance can be given as to the value, if any, that may be ascribed to the Debtors' various prepetition liabilities and other securities.
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-1
Schedule of Cash Receipts and Disbursements
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| # | | | | FCI | | | FSC | | | FHC | | | FLLC | | | Cumulative[1]
1/3/21 - 1/30/21 | |
| 1 | | Receipts | | | | | | | | | | | | | | | | | | | | |
| 2 | | Credit Card and Cash Receipts[2] | | $ | 19,015,713 | | | $ | - | | | $ | - | | | $ | - | | | $ | 19,015,713 | |
| 3 | | Inventory Liquidation | | | - | | | | - | | | | - | | | | - | | | | - | |
| 4 | | Federal Tax Refund | | | - | | | | - | | | | - | | | | - | | | | - | |
| 5 | | Total Receipts | | | 19,015,713 | | | | - | | | | - | | | | - | | | | 19,015,713 | |
| 6 | | Operating Disbursements | | | | | | | | | | | | | | | | | | | | |
| 7 | | Payroll & Taxes | | | 4,658,576 | | | | 1,055,515 | | | | - | | | | - | | | | 5,714,090 | |
| 8 | | Rent | | | - | | | | - | | | | - | | | | - | | | | - | |
| 9 | | Inventory | | | - | | | | 6,192,813 | | | | - | | | | - | | | | 6,192,813 | |
| 10 | | Sales Tax | | | 2,712,781 | | | | - | | | | - | | | | - | | | | 2,712,781 | |
| 11 | | Merchant Fees | | | 764,474 | | | | - | | | | - | | | | - | | | | 764,474 | |
| 12 | | Employee Benefits | | | 88,649 | | | | 438,216 | | | | - | | | | - | | | | 526,865 | |
| 13 | | Marketing | | | - | | | | 336,226 | | | | - | | | | - | | | | 336,226 | |
| 14 | | Professional/Computer Services | | | 9,409 | | | | 483,691 | | | | - | | | | - | | | | 493,100 | |
| 15 | | Other A/P | | | 1,449,576 | | | | 1,349,845 | | | | 42 | | | | - | | | | 2,799,463 | |
| 16 | | Total Operating Disbursements | | | 9,683,464 | | | | 9,856,306 | | | | 42 | | | | - | | | | 19,539,811 | |
| 17 | | Net Cash Flow from Operations | | $ | 9,332,249 | | | $ | (9,856,306 | ) | | $ | (42 | ) | | $ | - | | | $ | (524,099 | ) |
| 18 | | Non-Operating Disbursements / (Receipts) | | | | | | | | | | | | | | | | | | | | |
| 19 | | Debt Service | | | - | | | | - | | | | - | | | | - | | | | - | |
| 20 | | State Taxes | | | (18,026 | ) | | | - | | | | - | | | | - | | | | (18,026 | ) |
| 21 | | Federal Taxes | | | - | | | | - | | | | - | | | | - | | | | - | |
| 22 | | CapEx | | | - | | | | - | | | | - | | | | - | | | | - | |
| 23 | | Tenant Allowance | | | - | | | | - | | | | - | | | | - | | | | - | |
| 24 | | Total Non-Operating Disbursements / (Receipts) | | | (18,026 | ) | | | - | | | | - | | | | - | | | | (18,026 | ) |
| 25 | | Net Cash Flow Before Restructuring | | $ | 9,350,275 | | | $ | (9,856,306 | ) | | $ | (42 | ) | | $ | - | | | $ | (506,073 | ) |
| 26 | | Restructuring Related Disbursements | | | | | | | | | | | | | | | | | | | | |
| 27 | | Professional Fees[3] | | | - | | | | 508,542 | | | | - | | | | - | | | | 508,542 | |
| 28 | | Credit Card Program Deposits | | | - | | | | - | | | | - | | | | - | | | | - | |
| 29 | | Utility Deposit | | | - | | | | - | | | | - | | | | - | | | | - | |
| 30 | | 503(b)(9) and Critical Vendor Payments | | | - | | | | - | | | | - | | | | - | | | | - | |
| 31 | | KEIP/KERP | | | - | | | | - | | | | - | | | | - | | | | - | |
| 32 | | UST Fees | | | - | | | | - | | | | - | | | | - | | | | - | |
| 33 | | DIP Fees & Interest - Term | | | - | | | | - | | | | - | | | | - | | | | - | |
| 34 | | DIP Fees & Interest - Revolver | | | - | | | | 424,712 | | | | - | | | | - | | | | 424,712 | |
| 35 | | Prepetition Term Loan Repayment | | | 10,000,000 | | | | - | | | | - | | | | - | | | | 10,000,000 | |
| 36 | | Cure Costs | | | - | | | | - | | | | - | | | | - | | | | - | |
| 37 | | Funding to Professional Fee Account[4] | | | - | | | | 2,765,720 | | | | - | | | | - | | | | 2,765,720 | |
| 38 | | Total Restructuring Related Disbursements | | | 10,000,000 | | | | 3,698,974 | | | | - | | | | - | | | | 13,698,974 | |
| 39 | | Net Cash Flow | | $ | (649,726 | ) | | $ | (13,555,280 | ) | | $ | (42 | ) | | $ | - | | | $ | (14,205,047 | ) |
| 40 | | Beginning Cash Balance | | $ | 6,540,311 | | | $ | 5,313,291 | | | $ | 19,756 | | | $ | - | | | $ | 11,873,358 | |
| 41 | | Net Cash Flow | | | (649,726 | ) | | | (13,555,280 | ) | | | (42 | ) | | | - | | | | (14,205,047 | ) |
| 42 | | Borrowings | | | - | | | | 26,877,222 | | | | - | | | | - | | | | 26,877,222 | |
| 43 | | Repayments[2] | | | (11,248,072 | ) | | | - | | | | - | | | | - | | | | (11,248,072 | ) |
| 44 | | Intercompany | | | 10,000,000 | | | | (10,000,000 | ) | | | - | | | | - | | | | - | |
| 45 | | Change in deposits in transfer | | | (1,128,293 | ) | | | - | | | | - | | | | - | | | | (1,128,293 | ) |
| 46 | | Change in petty cash[5] | | | (393,003 | ) | | | - | | | | - | | | | - | | | | (393,003 | ) |
| 47 | | Ending Cash Balance | | $ | 3,121,217 | | | $ | 8,635,233 | | | $ | 19,714 | | | $ | - | | | $ | 11,776,164 | |
Footnotes:
| [1] | Cash balance represents book balance, which is net of outstanding checks and may differ from bank balance due to the timing of items being posted to the Debtors’ bank accounts. |
| [2] | Per the terms of the DIP Credit Agreement, the DIP lender holds certain receipts for the Debtors. The receipts held by the DIP lender are shown as restricted cash on the Balance Sheet. |
| [3] | Professional fees includes $228K for merchandise consultants for store closures paid to the DIP lender, $180K of DIP lender legal fees, and two $50K monthly IB fees ($100K) paid to FTICA. |
| [4] | $2.8M of professional and UST fees were funded into the professional fee account per the terms of the DIP Credit Agreement. |
| [5] | Per the Asset Purchase Agreement, petty cash was sold and as such, is represented as a disbursement. |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-1a
Bank Account Balances, Debtor Statement with Respect to Bank Account Reconciliations
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| | | | | Account Number | | | | | | | Period Ended | |
| # | | Debtor Entity | | (Last 4 Digits) | | | Bank | | Account Type | | 1/30/2021[1] | |
| 1 | | Francesca's Collections, Inc. | | | 9049 | | | Chase | | Depository | | $ | 147,060 | |
| 2 | | Francesca's Collections, Inc. | | | 5974 | | | Wells Fargo | | Checking | | | 476,294 | |
| 3 | | Francesca's Collections, Inc. | | | 5309 | | | Bank of America | | Depository | | | 262,713 | |
| 4 | | Francesca's Collections, Inc. | | | 5744 | | | Regions | | Depository | | | 90,313 | |
| 5 | | Francesca's Collections, Inc. | | | 9450 | | | Citizens | | Depository | | | 77,679 | |
| 6 | | Francesca's Collections, Inc. | | | 4465 | | | BB&T | | Depository | | | 29,709 | |
| 7 | | Francesca's Collections, Inc. | | | 3154 | | | PNC | | Depository | | | 390,254 | |
| 8 | | Francesca's Collections, Inc. | | | 4758 | | | Fifth Third | | Depository | | | 42,726 | |
| 9 | | Francesca's Collections, Inc. | | | 8807 | | | US BANK | | Depository | | | 74,529 | |
| 10 | | Francesca's Collections, Inc. | | | 2091 | | | IBC | | Depository | | | 4,213 | |
| 11 | | Francesca's Collections, Inc. | | | 0085 | | | Pinnacle Bank | | Depository | | | 5,312 | |
| 12 | | Francesca's Collections, Inc. | | | 4128 | | | Community First Nat'l | | Depository | | | 4,123 | |
| 13 | | Francesca's Collections, Inc. | | | 0596 | | | First Citizens Bank | | Depository | | | 96,710 | |
| 14 | | Francesca's Collections, Inc. | | | 8962 | | | Chase | | Passthrough | | | 196,239 | |
| 15 | | Francesca's Collections, Inc. | | | 4644 | | | Chase | | Checking | | | 1,166,305 | |
| 16 | | Francesca's Collections, Inc. | | | 4669 | | | Chase | | Checking | | | - | |
| 17 | | Francesca's Collections, Inc. | | | 5990 | | | Wells Fargo | | Depository | | | 2,554 | |
| 18 | | Francesca's Holdings Corporation | | | 9350 | | | Chase | | Checking | | | 19,714 | |
| 19 | | Francesca's Services Corporation | | | 8238 | | | Chase | | Checking | | | 8,635,233 | |
| 20 | | Francesca's Collections, Inc. | | | 3265 | | | Chase | | Checking/Depository | | | 54,484 | |
| 21 | | Francesca's Collections, Inc. | | | 4651 | | | Chase | | Depository | | | - | |
| 22 | | | | | | | | Cash and Cash Equivalents at Financial Institutions | | $ | 11,776,164 | |
| 23 | | Francesca's Collections, Inc. | | | | | | | | Petty Cash Held at Boutiques[2] | | | - | |
| 24 | | | | | | | | Reported Cash and Cash Equivalents at 1/30/2021 | | $ | 11,776,164 | |
| 25 | | Francesca's Collections, Inc. | | | 7861 | | | Chase | | Certificate of Deposit[3] | | | 214,510 | |
| 26 | | Francesca's Services Corporation | | | 5317 | | | Chase | | Professional Fee Account[3] | | | 5,888,000 | |
Footnotes:
| [1] | Cash balance represents book balance, which is net of outstanding checks and may differ from bank balance due to the timing of items being posted to the Debtors’ bank accounts. |
| [2] | Per the Asset Purchase Agreement, all petty cash held by the Debtors was sold. |
| [3] | Certificate of Deposit and Professional Fee Account are included in restricted cash on Debtors' Balance Sheet. |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-1a
Debtor Attestation to with Respect to Bank Account Reconciliations, Bank Statements and Open/Closed Bank Accounts
Reporting Period: January 3, 2021 – January 30, 2021
Bank Account Reconciliations & Cash Disbursement Journal
The Debtors affirm that bank account reconciliations are prepared for all open and active bank accounts on a monthly basis. The Debtors affirm that within their financial accounting systems, check registers and/or disbursement journals are maintained for each disbursement account.
Bank Statement
The Debtors affirm that bank statements for all open and active bank accounts are retained by the Debtors.
Open/Closed Bank Accounts
The Debtors did not open or close any bank accounts during January 2021.
| | | | |
| Anthony M. Saccullo | | | Date |
| Wind-Down Officer | | |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-1b
Schedule of Professional Fees and Expenses Paid
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| | | | | | Period Covered | | | | Amount Paid this Period | | | Amount Paid Case to Date | |
| # | Payee | | Role | | Beginning Date | | End Date | | Payment Date | | Fees | | Expenses | | | Fees | | | Expenses | |
| 1 | FTI Capital Advisors, LLC | | Investment Banker | | December 12, 2020 | | January 11, 2021 | | 1/8/2021 | | $ | 50,000 | | | $ | - | | | $ | 50,000 | | | $ | - | |
| 2 | FTI Capital Advisors, LLC | | Investment Banker | | January 12, 2021 | | February 11, 2021 | | 1/22/2021 | | | 50,000 | | | | - | | | | 50,000 | | | | - | |
| 3 | Total | | | | | | | | | | $ | 100,000 | | | $ | - | | | $ | 100,000 | | | $ | - | |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-2
Statement of Operations by Legal Entity
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| # | Category | | FCI | | | FSC | | | FHC | | | FLLC | | | Eliminations | | | Consolidated | |
| 1 | Net sales | | $ | 15,836,965 | | | $ | 76,214 | | | $ | - | | | $ | - | | | $ | - | | | $ | 15,913,179 | |
| 2 | Cost of goods sold and occupancy costs | | | 15,108,067 | | | | 406,564 | | | | - | | | | - | | | | - | | | | 15,514,632 | |
| 3 | Gross profit | | | 728,898 | | | | (330,351 | ) | | | - | | | | - | | | | - | | | | 398,547 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4 | Selling, general and administrative expenses | | | 4,878,855 | | | | 1,874,975 | | | | 42 | | | | - | | | | - | | | | 6,753,872 | |
| 5 | (Loss) income from operations | | | (4,149,957 | ) | | | (2,205,326 | ) | | | (42 | ) | | | - | | | | - | | | | (6,355,325 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6 | Restructuring (expenses)[1] | | | - | | | | (4,389,533 | ) | | | - | | | | - | | | | - | | | | (4,389,533 | ) |
| 7 | Gain (loss) on assets[2] | | | 21,475,165 | | | | (5,883,458 | ) | | | 13,497,132 | | | | - | | | | - | | | | 29,088,838 | |
| 8 | Interest income (expense) | | | - | | | | 7,181 | | | | - | | | | - | | | | - | | | | 7,181 | |
| 9 | Other income (expense)[3] | | | 21,278 | | | | (859,539 | ) | | | - | | | | - | | | | - | | | | (838,261 | ) |
| 10 | (Loss) income before income tax expense | | | 17,346,486 | | | | (13,330,675 | ) | | | 13,497,090 | | | | - | | | | - | | | | 17,512,901 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| 11 | Income tax expense | | | (20,099,808 | ) | | | - | | | | - | | | | - | | | | - | | | | (20,099,808 | ) |
| 12 | Net (loss) income | | $ | 37,446,293 | | | $ | (13,330,675 | ) | | $ | 13,497,090 | | | $ | - | | | $ | - | | | $ | 37,612,708 | |
Footnotes:
| [1] | Restructuring expenses includes $4.1M of restructuring professional fees and the $300K DIP financing fee payable to the DIP lender. |
| [2] | Gain (loss) on assets includes net gain from the cancellation of store leases and net losses from the Sale Transaction and lease cure costs. |
| [3] | Other expense of $860K for FSC includes $677K of amortized deferred financing costs on the DIP Credit facility, $150K DIP early termination fee, and $33K of DIP monitoring fees. |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-3
Balance Sheet by Legal Entity
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
Balance Sheet at 01/30/2021
| # | Category | | FCI | | | FSC | | | FHC | | | FLLC | | | Eliminations | | | Consolidated[1] | |
| | Assets | | | | | | | | | | | | | | | | | | |
| | Current Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | Cash and cash equivalents | | $ | 3,121,217 | | | $ | 8,635,233 | | | $ | 19,714 | | | $ | - | | | $ | - | | | $ | 11,776,164 | |
| 2 | Accounts receivable[2] | | | 35,377,862 | | | | 257,647,018 | | | | 13,497,132 | | | | - | | | | (255,253,858 | ) | | | 51,268,154 | |
| 3 | Inventories | | | 3,796,328 | | | | - | | | | - | | | | - | | | | (3,796,328 | ) | | | - | |
| 4 | Prepaid expenses and other current assets[3] | | | 254,825 | | | | 9,562,134 | | | | - | | | | - | | | | - | | | | 9,816,959 | |
| 5 | Total Current Assets | | | 42,550,232 | | | | 275,844,385 | | | | 13,516,846 | | | | - | | | | (259,050,185 | ) | | | 72,861,277 | |
| 6 | Operating lease right-of-use assets, net | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| 7 | Property and equipment, net | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| 8 | Other assets, Net[4] | | | 74,019 | | | | 12,094 | | | | - | | | | - | | | | - | | | | 86,113 | |
| 9 | Total Assets | | $ | 42,624,251 | | | $ | 275,856,479 | | | $ | 13,516,846 | | | $ | - | | | $ | (259,050,185 | ) | | $ | 72,947,390 | |
| | Liabilities And Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| | Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| 10 | Accounts payable | | $ | 260,574,097 | | | $ | 24,540,326 | | | $ | 857,028 | | | $ | - | | | $ | (255,253,858 | ) | | $ | 30,717,593 | |
| 11 | Accrued liabilities[5] | | | 2,836,111 | | | | 563,524 | | | | - | | | | - | | | | - | | | | 3,399,635 | |
| 12 | Current portion of long-term debt | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| 13 | Current portion of operating lease liabilities[6] | | | 55,585,968 | | | | 101,918 | | | | - | | | | - | | | | - | | | | 55,687,886 | |
| 14 | Total Current Liabilities | | | 318,996,175 | | | | 25,205,768 | | | | 857,028 | | | | - | | | | (255,253,858 | ) | | | 89,805,113 | |
| 15 | Operating lease liabilities | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| 16 | Long-term debt, net[7] | | | - | | | | 2,445,084 | | | | - | | | | - | | | | - | | | | 2,445,084 | |
| 17 | Other liabilities | | | (212,349,311 | ) | | | 50,317,406 | | | | 162,552,228 | | | | - | | | | (520,322 | ) | | | - | |
| 18 | Total Liabilities | | | 106,646,864 | | | | 77,968,257 | | | | 163,409,255 | | | | - | | | | (255,774,180 | ) | | | 92,250,197 | |
| 19 | Preferred Stock | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| | Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| 20 | Common stock | | | - | | | | 1 | | | | 39,449 | | | | - | | | | (2 | ) | | | 39,448 | |
| 21 | APIC | | | - | | | | 8,609,538 | | | | 113,157,531 | | | | - | | | | (8,609,537 | ) | | | 113,157,532 | |
| 22 | Retained earnings | | | (64,022,613 | ) | | | 189,278,682 | | | | (103,068,007 | ) | | | - | | | | 5,333,534 | | | | 27,521,596 | |
| 23 | Treasury stock | | | - | | | | - | | | | (160,021,383 | ) | | | - | | | | - | | | | (160,021,383 | ) |
| 24 | Total Stockholders' Equity | | | (64,022,613 | ) | | | 197,888,221 | | | | (149,892,409 | ) | | | - | | | | (3,276,005 | ) | | | (19,302,806 | ) |
| 25 | Total Liabilities And Stockholders' Equity | | $ | 42,624,251 | | | $ | 275,856,479 | | | $ | 13,516,846 | | | $ | - | | | $ | (259,050,185 | ) | | $ | 72,947,390 | |
Footnotes:
| [1] | The Debtors sold substantially all assets on January 30, 2021 as a part of the Sale Transaction. |
| [2] | Accounts receivable includes $34.1M of income tax receivables, $17.1M of Sale Transaction receivables, and $30K of other receivables. The $17.1M of Sale Transaction receivables are a result of the Sale Transaction closing on a Saturday. On February 1, 2021, the Buyer funded $12.2M in cash to the Debtors, $3.6M was placed in escrow, and the remaining $1.25M is reflected as a promissory note due December 31, 2021. |
| [3] | Prepaid expenses and other current assets includes $5.9M professional fee account held by FSC as restricted cash, $3.7M of FSC prepaid expenses (including $1.5M of D&O insurance prepayments, $800K of professionals vendor credits, $650K retainer to FTI, $384K of freight vendor credits, $280K of inventory vendor credits, $32K of other vendor credits, and $10K of prepaid subscriptions), $205K utility deposit account held by FCI as restricted cash, $45K of FCI inventory vendor credits, and $5K of FCI checks written for future months. |
| [4] | Other assets, Net includes $74K of prepetition boutique utility and security deposits held by FCI and $12K of store supply deposits held by FSC that will be used to offset future payments. |
| [5] | Accrued liabilities includes $2.2M of accrued payroll and taxes for FCI, $670K of accrued sales tax for FCI, and $560K of accrued payroll and taxes for FSC. |
| [6] | FCI current portion of operating lease liabilities includes $31.5M of unpaid rent, $24.4M of lease rejection costs, and $292K of percent rent accruals, offset by $524K of rent overpayments. |
| [7] | Long-term debt, net includes $2.4M of remaining balance on DIP Credit facility as of January 30, 2021. |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
Debtor Attestation with Respect to Postpetition Taxes
Reporting Period: January 3, 2021 – January 30, 2021
Anthony M. Saccullo hereby declares under penalty of perjury:
I am the Wind-Down Officer appointed by order of the United States Bankruptcy Court for the District of Delaware [D.I. 475] in the above captioned case to oversee the bankruptcy of the debtors and debtors in possession (collectively the "Debtors"). I am familiar with the Debtors’ day-to-day operations, business affairs, and books and records. I am authorized to submit this statement on behalf of the Debtors.
All statements in this statement are based on my personal knowledge, my review of the relevant documents, my discussions with other employees of the Debtors, or my opinion based upon my experience and knowledge of the Debtors' operations and financial condition. If I were called upon to testify, I could and would testify to each of the facts set forth herein based on such personal knowledge, review of documents, discussions with other employees of the Debtors or opinion.
To the best of my knowledge, information, and belief, and except as otherwise set forth in the MOR, all of the Debtors have filed all the necessary federal, state and local tax returns, or extensions related there to, and have timely made (or are in the process of remediating any immaterial late filings or prepayments) all related required postpetition tax payments, which are not subject to dispute or reconciliation, and are current.
| | | | |
| Anthony M. Saccullo | | | Date |
| Wind-Down Officer | | | |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-4
Summary of Unpaid Postpetition Debts
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| | | | | | | | Days Past Due | | | | | |
| # | | Accounts Payable | | Current | | | 0 - 30 Days | | | 31 - 60 Days | | | 61 - 90 Days | | | > 91 Days | | | Total | |
| 1 | | Combined Debtors [1][2][3] | | $ | 1,496,706 | | | $ | 456,883 | | | $ | 204,556 | | | $ | | | | $ | - | | | $ | 2,158,146 | |
Footnotes:
| [1] | The postpetition accounts payable represents open and outstanding trade vendor invoices that have been entered into the Debtors’ accounts payable system. |
| [2] | This summary does not include accruals or intercompany payables. |
| [3] | The postpetition accounts payable do not include any amounts for retained professionals. |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-5
Accounts Receivable Reconciliation and Aging
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| # | | Reconciliation | | Beginning Accounts Receivable | | | Change in Accounts Receivable | | | Ending Accounts Receivable | |
| 1 | | Total Accounts Receivable[1][2] | | $ | 19,410,006 | | | $ | 31,858,148 | | | $ | 51,268,154 | |
Accounts Receivable Aging
| | | | | | | | Days Past Due | | | | | | | | | |
| # | | Aging | | Current | | | 0 - 30 Days | | | 31 - 60 Days | | | 61 - 90 Days | | | 91+ Days | | | Total | | | Uncollectible | | | AR (Net) | |
| 2 | | Income Tax Receivables | | $ | 34,109,299 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 34,109,299 | | | $ | - | | | $ | 34,109,299 | |
| 3 | | Transaction Receivables[3] | | | 17,128,979 | | | | - | | | | - | | | | - | | | | - | | | | 17,128,979 | | | | - | | | | 17,128,979 | |
| 4 | | Employee Receivables | | | 11,313 | | | | - | | | | - | | | | - | | | | - | | | | 11,313 | | | | - | | | | 11,313 | |
| 5 | | Sales Receivables | | | 10,665 | | | | - | | | | - | | | | - | | | | - | | | | 10,665 | | | | - | | | | 10,665 | |
| 6 | | Landlord Receivables | | | - | | | | - | | | | - | | | | - | | | | 7,897 | | | | 7,897 | | | | - | | | | 7,897 | |
| 7 | | Total Accounts Receivable [1][2] | | $ | 51,260,257 | | | $ | - | | | $ | - | | | $ | - | | | $ | 7,897 | | | $ | 51,268,154 | | | $ | - | | | $ | 51,268,154 | |
Footnotes:
| [1] | Amounts are aged from the due date and shown on a gross basis before any adjustment for estimated bad debts and other uncollectable amounts. |
| [2] | This summary does not include any accrued fees, discounts or intercompany receivables. |
| [3] | The $17.1M of Sale Transaction receivables are a result of the Sale Transaction closing on a Saturday. On February 1, 2021, the Buyer funded $12.2M in cash to the Debtors, $3.6M was placed in escrow, and the remaining $1.25M is reflected as a promissory note due December 31, 2021. |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
MOR-5
Debtor Questionnaire
Reporting Period: January 3, 2021 – January 30, 2021
| 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. | X1,2 | |
| 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 |
1 The Debtors sold substantially all assets on January 30, 2021 as a part of the Sale Transaction.
2The Debtors sold furniture and fixtures at closing boutique locations during the MOR period totaling $469K.
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
Exhibit A
Balance Sheet by Legal Entity
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
Opening Balance Sheet at 01/03/2021
| # | | Category | | FCI | | | FSC | | | FHC | | | FLLC | | | Eliminations | | | Consolidated | |
| | | Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Current Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | | Cash and cash equivalents | | $ | 6,540,311 | | | $ | 5,313,291 | | | $ | 19,756 | | | $ | - | | | $ | - | | | $ | 11,873,358 | |
| 2 | | Accounts receivable | | | 17,831,345 | | | | 239,492,890 | | | | - | | | | - | | | | (237,914,230 | ) | | | 19,410,006 | |
| 3 | | Inventories | | | 26,591,794 | | | | (77,081 | ) | | | - | | | | - | | | | (2,233,609 | ) | | | 24,281,104 | |
| 4 | | Prepaid expenses and other current assets | | | 7,012,754 | | | | 25,966,341 | | | | - | | | | - | | | | - | | | | 32,979,095 | |
| 5 | | Total Current Assets | | | 57,976,204 | | | | 270,695,441 | | | | 19,756 | | | | - | | | | (240,147,839 | ) | | | 88,543,562 | |
| 6 | | Operating lease right-of-use assets, net | | | 118,926,429 | | | | 3,927,417 | | | | - | | | | - | | | | - | | | | 122,853,846 | |
| 7 | | Property and equipment, net | | | 26,240,460 | | | | 3,680,137 | | | | - | | | | - | | | | - | | | | 29,920,597 | |
| 8 | | Other assets, Net | | | 125,252 | | | | 1,611,871 | | | | 202,315,652 | | | | - | | | | - | | | | 204,052,775 | |
| 9 | | Total Assets | | $ | 203,268,345 | | | $ | 279,914,866 | | | $ | 202,335,408 | | | $ | - | | | $ | (240,147,839 | ) | | $ | 445,370,780 | |
| | | Liabilities And Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Current Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| 10 | | Accounts payable | | $ | 245,303,651 | | | $ | 20,592,913 | | | $ | 857,028 | | | $ | - | | | $ | (237,914,230 | ) | | $ | 28,839,362 | |
| 11 | | Accrued liabilities | | | 8,701,428 | | | | 4,965,502 | | | | - | | | | - | | | | - | | | | 13,666,930 | |
| 12 | | Current portion of long-term debt | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| 13 | | Current portion of operating lease liabilities | | | 107,414,454 | | | | 1,021,461 | | | | - | | | | - | | | | - | | | | 108,435,915 | |
| 14 | | Total Current Liabilities | | | 361,419,533 | | | | 26,579,877 | | | | 857,028 | | | | - | | | | (237,914,230 | ) | | | 150,942,207 | |
| 15 | | Operating lease liabilities | | | 136,355,279 | | | | 3,211,950 | | | | - | | | | - | | | | - | | | | 139,567,229 | |
| 16 | | Long-term debt, net | | | - | | | | 9,323,154 | | | | - | | | | - | | | | - | | | | 9,323,154 | |
| 17 | | Other liabilities | | | (202,240,947 | ) | | | 40,347,094 | | | | 162,486,232 | | | | - | | | | (520,322 | ) | | | 72,058 | |
| 18 | | Total Liabilities | | | 295,533,866 | | | | 79,462,074 | | | | 163,343,260 | | | | - | | | | (238,434,552 | ) | | | 299,904,647 | |
| 19 | | Preferred Stock | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| 20 | | Common stock | | | - | | | | 1 | | | | 39,474 | | | | - | | | | (2 | ) | | | 39,473 | |
| 21 | | APIC | | | - | | | | 8,609,538 | | | | 113,223,502 | | | | - | | | | (8,609,537 | ) | | | 113,223,503 | |
| 22 | | Retained earnings | | | (92,265,521 | ) | | | 191,843,253 | | | | 85,750,555 | | | | - | | | | 6,896,252 | | | | 192,224,540 | |
| 23 | | Treasury stock | | | - | | | | - | | | | (160,021,383 | ) | | | - | | | | - | | | | (160,021,383 | ) |
| 24 | | Total Stockholders' Equity | | | (92,265,521 | ) | | | 200,452,792 | | | | 38,992,148 | | | | - | | | | (1,713,287 | ) | | | 145,466,133 | |
| 25 | | Total Liabilities And Stockholders' Equity | | $ | 203,268,345 | | | $ | 279,914,866 | | | $ | 202,335,408 | | | $ | - | | | $ | (240,147,839 | ) | | $ | 445,370,780 | |
| In re: | Case No. 20-13076 (BLS) |
| Francesca’s Holdings Corporation, et al. | Reporting Period: January 3, 2021 – January 30, 2021 |
| Debtors | |
Exhibit B
Disbursements by Legal Entity
Reporting Period: January 3, 2021 – January 30, 2021
($’s in USD)
| # | | Debtor Name | | Abbreviation | | Case Number | | Disbursements[1] | |
| 1 | | Francesca's Holdings Corporation | | FHC | | 20-13076 | | $ | 42 | |
| 2 | | Francesca's, LLC | | FLLC | | 20-13077 | | | - | |
| 3 | | Francesca's Collections, Inc. | | FCI | | 20-13078 | | | 19,665,438 | |
| 4 | | Francesca's Services Corporation | | FSC | | 20-13079 | | | 13,555,280 | |
| 5 | | Total | | | | | | $ | 33,220,760 | |
[1] Includes disbursements made January 3, 2021 - January 30, 2021.
