Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
| | | |
| | Federal Tax I.D. # | 47-4626948 |
| | | |
CORPORATE MONTHLY OPERATING REPORT
REQUIRED DOCUMENTS | | FORM NO. | | DOCUMENT
ATTACHED | | EXPLANATION
ATTACHED |
Schedule of Cash Receipts and Disbursements | | MOR-1 | | Yes | | No |
Bank Reconciliation (or copies of debtor’s bank reconciliations) | | MOR-1 (CON’T) | | Yes | | No |
Copies of bank statements | | | | | | |
Cash disbursements journals | | | | | | |
Statement of Operations | | MOR-2 | | Yes | | No |
Balance Sheet | | MOR-3 | | Yes | | No |
Status of Post-petition Taxes | | MOR-4 | | Yes | | No |
Copies of IRS Form 6123 or payment receipt | | | | | | |
Copies of tax returns filed during reporting period | | | | | | |
Summary of Unpaid Accounts Payable | | MOR-4 | | Yes | | No |
Listing of Aged Accounts Payable | | | | | | |
Accounts Receivable Reconciliation and Aging | | MOR-5 | | Yes | | No |
Payments to Insiders and Professionals | | MOR-6 | | Yes | | No |
Post Petition Status of Secured Notes | | MOR-6 | | Yes | | No |
Debtor Questionnaire | | MOR-7 | | Yes | | No |
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/ Michael Kaseta | | |
Signature of Authorized Individual | | |
| | |
Michael Kaseta | | October 1, 2018 |
Printed Name of Authorized Individual | | Date |
| | |
Chief Financial Officer | | |
Title | | |
1
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
| | | |
| | Federal Tax I.D. # | 47-4626948 |
LISTING OF DEBTOR ENTITIES & NOTES TO THE MONTHLY OPERATING REPORT
GENERAL:
The report includes activity from the following debtors (the “Debtors”) and related case numbers:
Debtor | | Federal Tax I.D. # [1] | | Case
Number |
Aralez Pharmaceuticals US Inc. | | 6948 | | 18-12425 |
Aralez Pharmaceuticals Holdings Ltd. | | 5824 | | 18-12426 |
Aralez Pharmaceuticals Management Inc. | | 7166 | | 18-12427 |
Aralez Pharmaceuticals R&D Inc. | | 9731 | | 18-12428 |
Aralez Pharmaceuticals Trading Designed Activity Company | | 1627 | | 18-12429 |
Halton Laboratories LLC | | 9342 | | 18-12430 |
POZEN Inc. | | 7552 | | 18-12431 |
General Notes:
[1] Last four digits of entity federal tax I.D. number.
On August 10, 2018 (the “Petition Date”), each of the Debtors filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors’ chapter 11 cases are jointly administered for procedural purposes only under Aralez Pharmaceuticals US Inc., No. 18-12425 (MG) pursuant to an order entered by the Bankruptcy Court on August 14, 2018 [Docket No. 27]. On August 27, 2018, the United States Trustee for Region 2 (the “U.S. Trustee”) appointed an official committee of unsecured creditors pursuant to section 1102(a) of the Bankruptcy Code [Docket No. 53]. The Debtors continue to operate their business and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
The financial information herein has been derived from the books and records of the Debtors. This information, however, has not been subject to certain procedures that would typically be applied to financial information in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and upon application of such procedures, the Debtors believe that the financial information could be subject to changes, which could be material. The information furnished in this report includes primarily normal recurring adjustments, but does not include all adjustments that would typically be made for financial statements prepared in accordance with U.S. GAAP, including but not limited to, adjustments for income tax provisions and related deferred tax asset and liability accounts and certain other asset and liability accounts.
The Debtors are filing their consolidated Monthly Operating Report solely for the purposes of complying with the monthly operating reporting requirements applicable in the Debtors’ chapter 11 cases. The financial and supplemental information contained herein is presented on a preliminary and unaudited basis, remains subject to future adjustments and may not comply in all material respects with U.S. GAAP. This Monthly Operating Report should not be relied on by any persons for information relating to current or future financial conditions, events, or performance of any of the Debtors or their affiliates. Financial information presented in this Monthly Operating Report reflects results for Aralez Pharmaceuticals US Inc. and its affiliated debtors.
The results of operations contained herein are not necessarily indicative of results that may be expected for any other period or for the full year and may not necessarily reflect the combined results of operations and financial position of the Debtors in the future.
The Debtors reserve all rights to amend or supplement this Monthly Operating Report in all respects, as may be necessary or appropriate. Nothing contained in this Monthly Operating Report shall constitute a waiver of any of the Debtors’ rights or an admission with respect to their chapter 11 cases.
2
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
| | | |
| | Federal Tax I.D. # | 47-4626948 |
NOTES TO THE MONTHLY OPERATING REPORT
Notes to MOR-1:
Aralez Pharmaceuticals US Inc. makes disbursements on behalf of other Debtor entities. The amount included in the “cash disbursements” column for Aralez Pharmaceuticals US Inc. represents the disbursements made on behalf of each affiliated Debtor and for itself.
Notes to MOR-2 & MOR-3:
The information contained in MOR-2 & MOR-3 is provided to fulfill the requirements of the Office of the United States Trustee. All information contained in MOR-2 and MOR-3 is unaudited and subject to future adjustment.
Notes to MOR-4:
The Debtors have received approval to pay prepetition taxes, fees, including, without limitation, federal, state, and local U.S. taxes and/or Irish taxes as well as regulatory fees and licensing fees incurred in the ordinary course of business that are required to be paid to operate in various states pursuant to the Interim Order signed on 8/14/2018 [Docket No. 38] and Final Order signed on 9/13/2018 [Docket No. 100]. As such, taxes and fees have been paid when due except for amounts that are in dispute, if any.
Notes to MOR-5:
The Debtors reconcile and age individual customer accounts receivables in the normal course of the Debtors’ operations.
Notes to MOR-6:
Of the total disbursements shown in the Schedule of Cash Receipts and Disbursements (MOR-1), no payments were made to Professionals.
3
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-1: SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
CASE NO. | | CASE NAME | | CASH RECEIPTS | | CASH DISBURSEMENTS | |
18-12425 | | Aralez Pharmaceuticals US Inc. | | $ | 8,211,362 | | $ | 3,028,288 | |
18-12426 | | Aralez Pharmaceuticals Holdings Ltd. | | — | | — | |
18-12427 | | Aralez Pharmaceuticals Management Inc. | | 4,344 | | 20,530 | |
18-12428 | | Aralez Pharmaceuticals R&D Inc. | | 948 | | 5,177 | |
18-12429 | | Aralez Pharmaceuticals Trading Designed Activity Company | | 2,151,462 | | 94,829 | |
18-12430 | | Halton Laboratories LLC | | 229 | | 9,814 | |
18-12431 | | POZEN Inc. | | 165,389 | | 1,162 | |
| | Total Debtors | | $ | 10,533,734 | | $ | 3,159,800 | |
4
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-1: BANK ACCOUNT RECONCILIATIONS[2]
Balance as of 8/31/2018
Legal Entity | | Case Number | | Bank/Account Description | | Bank Name | | Account Number [1] | | Ending Bank Balance |
Aralez Pharmaceuticals US Inc. | | 18-12425 | | Collection and Operating Account | | Bank of America, N.A. | | Ending in 1014 | | $10,220,666 |
Aralez Pharmaceuticals US Inc. | | 18-12425 | | Operating Account | | Bank of America, N.A. | | Ending in 5408 | | $0 |
Aralez Pharmaceuticals US Inc. | | 18-12425 | | Letter of Credit | | Bank of America, N.A. | | Ending in 3891 | | $281,660 |
Aralez Pharmaceuticals Management Inc. | | 18-12427 | | Operating Account | | Bank of America, N.A. | | Ending in 0507 | | $0 |
Aralez Pharmaceuticals R&D Inc. | | 18-12428 | | Operating Account | | Bank of America, N.A. | | Ending in 6058 | | $0 |
Halton Laboratories LLC | | 18-12430 | | Tax Account | | Bank of America, N.A. | | Ending in 6653 | | $5,915 |
POZEN Inc. | | 18-12431 | | Operating Account | | Bank of America, N.A. | | Ending in 3766 | | $0 |
POZEN Inc. | | 18-12431 | | Investment Account | | U.S. Bank | | Ending in 4611 | | $18,884 |
POZEN Inc. | | 18-12431 | | Investment Account | | J.P. Morgan | | Ending in 0341 | | $0 |
Aralez Pharmaceuticals US Inc. | | 18-12425 | | Government Rebate Account | | Citibank, N.A. | | Ending in 6701 | | $0 |
Aralez Pharmaceuticals Trading Designed Activity Company | | 18-12429 | | Operating Account | | Allied Irish Bank (AIB) | | Ending in 6584 | | $2,882,497 |
Aralez Pharmaceuticals Trading Designed Activity Company | | 18-12429 | | Investment Account | | Allied Irish Bank (AIB) | | Ending in 6567 | | $0 |
Aralez Pharmaceuticals Trading Designed Activity Company | | 18-12429 | | Operating Account | | Allied Irish Bank (AIB) | | Ending in 6028 | | 12,093 euros |
Aralez Pharmaceuticals Holdings Ltd. | | 18-12426 | | Operating Account | | Allied Irish Bank (AIB) | | Ending in 8285 | | $2,645 |
Aralez Pharmaceuticals Holdings Ltd. | | 18-12426 | | Investment Account | | Allied Irish Bank (AIB) | | Ending in 7067 | | $0 |
Aralez Pharmaceuticals Holdings Ltd. | | 18-12426 | | Operating Account | | Allied Irish Bank (AIB) | | Ending in 7069 | | 59 euros |
Notes:
[1] Last four digits of account number.
[2] Information is presented above for the Debtors’ bank accounts. Balances are as of August 31, 2018. Copies of Bank Statements and Cash Disbursement journals were not included with the MOR. These items will be made available upon request.
5
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-2: STATEMENT OF OPERATIONS [1]
Please refer to attached Statement of Operations contained within the appendix at the end of this document.
Notes:
[1] The financial statements contained in this exhibit are unaudited. While the Debtors have made every reasonable effort to ensure that these financial statements are accurate and complete based upon information that was available at the time of preparation, the subsequent receipt of information may result in material changes in the data contained in these financial statements, and inadvertent errors or omissions may exist. To the extent the Debtors discover additional information that may differ materially from the information set forth in the financial statements contained herein, the Debtors reserve all rights to amend, supplement or otherwise modify this Monthly Operating Report as they deem necessary or appropriate.
6
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-3: BALANCE SHEET [1]
Please refer to attached Balance Sheet contained within the appendix at the end of this document.
Notes:
[1] The financial statements contained in this exhibit are unaudited. While the Debtors have made every reasonable effort to ensure that these financial statements are accurate and complete based upon information that was available at the time of preparation, the subsequent receipt of information may result in material changes in the data contained in these financial statements, and inadvertent errors or omissions may exist. To the extent the Debtors discover additional information that may differ materially from the information set forth in the financial statements contained herein, the Debtors reserve all rights to amend, supplement or otherwise modify this Monthly Operating Report as they deem necessary or appropriate.
7
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-4: STATUS OF POST-PETITION TAXES
| | Existing Tax
Liability | | Amount
Withheld and/or
Accrued | | Amount Paid
and/or (Refunds
Received) | | Ending Tax | |
U.S. State Taxes | | $ | 996,778 | | $ | — | | $ | 2,168 | | $ | 998,947 | |
U.S. Federal Taxes | | (498,766 | ) | — | | — | | (498,766 | ) |
U.S. Local Taxes | | (33,990 | ) | — | | — | | (33,990 | ) |
Irish Taxes | | — | | — | | — | | — | |
Other Taxes and Fees incl. NYC Rent Tax | | — | | — | | — | | — | |
Payroll Taxes | | (52,398 | ) | (158,206 | ) | 100,899 | | (109,705 | ) |
Total Taxes | | $ | 411,624 | | $ | (158,206 | ) | $ | 103,068 | | $ | 356,485 | |
SUMMARY OF UNPAID POST-PETITION DEBTS[1]
| | Number of Days Past Due | |
| | Current | | 0-30 | | 31-60 | | 61-90 | | Total | |
Combined | | $ | 2,816 | | $ | 12,130 | | $ | — | | $ | — | | $ | 14,946 | |
| | | | | | | | | | | | | | | | |
Notes:
[1] The Debtors’ Summary of Unpaid Post-Petition Debts includes invoices received prior to and after the petition date. The invoices are aged from the date the invoices were received.
8
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-5: ACCOUNTS RECEIVABLE RECONCILIATION AND AGING
Please refer to attached accounts receivable and aging schedule contained within the appendix.
9
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-6: PAYMENTS TO INSIDERS
PAYMENTS TO INSIDERS | |
Name | | Type of Payment | | Amount Paid | | Total Paid to Date | |
Adrian Adams | | Bi-weekly Payroll, Expense Reimbursement, Retirement Match, Medical/Dental/Vision, Insurance Premiums | | $ | 59,630 | | $ | 59,630 | |
Jennifer Armstrong | | Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums | | $ | 24,278 | | $ | 24,278 | |
Scott Charles | | Medical/Dental/Vision | | $ | 2,218 | | $ | 2,218 | |
Chris Freeland | | Bi-weekly Payroll, Expense Reimbursement, Retirement Match, Medical/Dental/Vision, Insurance Premiums | | $ | 22,274 | | $ | 22,274 | |
Michael Kaseta | | Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums | | $ | 27,069 | | $ | 27,069 | |
Andrew Koven | | Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums | | $ | 33,857 | | $ | 33,857 | |
Redacted | | Professional Fees | | $ | 1,444 | | $ | 1,444 | |
Sanjay Subramanian | | Bi-weekly Payroll, Retirement Match, Medical/Dental/Vision, Insurance Premiums | | $ | 18,260 | | $ | 18,260 | |
Eric Trachtenberg | | Medical/Dental/Vision | | $ | 3,080 | | $ | 3,080 | |
James Tursi | | NJ DBA Premium | | $ | 26 | | $ | 26 | |
Redacted | | Monthly Payroll, Car Allowance, Expense Reimbursement, Retirement Match | | $ | 27,066 | | $ | 27,066 | |
| | | | | | | |
Total Payments To Insiders[1] | | | | $ | 219,203 | | $ | 219,203 | |
Notes:
[1] The Debtors define “insiders” to include directors and officers of the Debtor entities. The Debtors do not take any position with respect to: (a) such person’s influence over the control of the Debtors; (b) the management responsibilities or functions of such individual; (c) the decision-making or corporate authority of such individual; or (d) whether such individual could successfully argue that he or she is not an “insider” under applicable law, including the federal securities laws, or with respect to any theories of liability or for any other purpose.
10
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-6: PAYMENTS TO PROFESSIONALS
PAYMENTS TO PROFESSIONALS | |
Name | | Amount Paid During Month | | Total Paid To Date | |
Willkie Farr & Gallagher LLP | | $ | 0 | | $ | 0 | |
Alvarez & Marsal Healthcare Industry Group, LLC | | $ | 0 | | $ | 0 | |
Moelis & Company | | $ | 0 | | $ | 0 | |
Prime Clerk LLC | | $ | 0 | | $ | 0 | |
RSM US LLP | | $ | 0 | | $ | 0 | |
Brown Rudnick LLP | | $ | 0 | | $ | 0 | |
Dundon Advisers LLP | | $ | 0 | | $ | 0 | |
Berkeley Research Group | | $ | 0 | | $ | 0 | |
McMillan LLP | | $ | 0 | | $ | 0 | |
Katten Muchin Rosenman LLP | | $ | 0 | | $ | 0 | |
Total Payments To Professionals | | $ | 0 | | $ | 0 | |
MOR-6: DIP Financing (Term Loan) - Period to Date
Name of Creditor | | Beginning Balance | | Additional Draws | | Paydowns | | Ending Balance | |
DIP Term Loan Financing | | $ | 5,000,000 | | $ | — | | $ | — | | $ | 5,000,000 | |
| | | | | | | | | | | | | |
Summary of the DIP Financing:
The DIP financing is in the form of a multi-draw senior secured super-priority term loan up to an aggregate principal of $5 million.
11
In re | ARALEZ PHARMACEUTICALS US INC., ET AL., | Case No. | 18-12425 (MG) |
| Debtors | | |
| | Reporting Period: | 8/10/18 to 8/31/18 |
MOR-7: DEBTOR QUESTIONNAIRE
Must be completed each month. If the answer to any of the questions is
“Yes”, provide a detailed explanation of each item. Attach additional sheets if
necessary. | | Yes | | No |
Have any assets been sold or transferred outside the normal course of business this reporting period? | | | | X |
Have any funds been disbursed from any account other than a debtor in possession account this reporting period? | | | | X |
Is the Debtor delinquent in the timely filing of any post-petition tax returns? | | | | X |
Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies? | | | | X |
Is the Debtor delinquent in paying any insurance premium payment? | | | | X |
Have any payments been made on pre-petition liabilities this reporting period? | | X[1] | | |
Are any post petition receivables (accounts, notes or loans) due from related parties? | | | | X |
Are any post petition payroll taxes past due? | | | | X |
Are any post petition State or Federal income taxes past due? | | | | X |
Are any post petition real estate taxes past due? | | | | X |
Are any other post petition taxes past due? | | | | X |
Have any pre-petition taxes been paid during this reporting period? | | X[1] | | |
Are any amounts owed to post petition creditors delinquent? | | X[2] | | |
Are any wage payments past due? | | | | X |
Have any post petition loans been received by the Debtor from any party?[3] | | | | X |
Is the Debtor delinquent in paying any U.S. Trustee fees? | | | | X |
Is the Debtor delinquent with any court ordered payments to attorneys or other professionals? | | | | X |
Have the owners or shareholders received any compensation outside of the normal course of business? | | | | X |
Notes:
[1] Pursuant to the relief requested under “First Day Motions” and their respective interim and final first day orders, certain payments have been made on prepetition obligations (e.g. Employee Wages [Docket No. 26 & 97], Taxes and Regulatory Fees [Docket No. 38 & 100], and Foreign Vendors [Docket No. 36 & 96]).
[2] Please refer to MOR-4 for a summary of the unpaid post-petition debts.
[3] The debtors received DIP financing in the form of a multi-draw senior secured super-priority team loan in the aggregate principal of $5 million as reflected on MOR-6.
12
ARALEZ PHARMACEUTICALS US INC., ET AL.,
(Debtors in Possession)
Monthly Operating Report Appendix
For the Period ended August 31, 2018
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
(UNAUDITED)
| Page |
| |
Unaudited Financial Statements | |
| |
Condensed Consolidated Balance Sheet | 3 |
| |
Condensed Consolidated Statement of Operations | 4 |
| |
Notes to Condensed Consolidated Financial Statements | 5 |
| |
Accounts Receivable Aging Schedule | 6 |
These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.
2
U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
ARALEZ PHARMACEUTICALS US INC., et al.,
(Debtors in Possession)
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS | | | |
Current Assets: | | | |
Cash | | $ | 13,034,146 | |
Accounts Receivable, net | | 28,782,195 | |
Inventory | | 3,069,202 | |
Prepaid and Other Assets | | 1,275,351 | |
Intercompany Receivables | | 446,301,103 | |
Total Current Assets | | 492,461,996 | |
| | | |
Property, Plant and Equipment, net of accumulated depreciation | | 289,523 | |
Goodwill | | 4,978,596 | |
Intangible assets at cost, net of accumulated amortization | | 220,425,301 | |
Investment in Subsidiary | | 170,640,701 | |
Other Long Term Assets | | 4,570,368 | |
Total Assets | | $ | 893,366,485 | |
| | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
Current Liabilities: | | | |
Accounts Payable | | $ | 3,181,459 | |
Accrued Expenses | | 48,120,034 | |
Short-Term Contingent Consideration | | 10,294,355 | |
Other Current Liabilities | | 888,777 | |
Intercompany Payables | | 587,814,230 | |
Total Current Liabilities | | 650,298,854 | |
| | | |
Long-Term Contingent Consideration | | 61,319,986 | |
Other Long Term Liabilities | | 4,172,076 | |
Total Liabilities | | 715,790,917 | |
| | | |
Shareholders’ Equity | | 177,575,568 | |
| | | |
Total Liabilities and Shareholders’ Equity | | $ | 893,366,485 | |
These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.
3
U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
ARALEZ PHARMACEUTICALS US INC., et al.,
(Debtors in Possession)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | For the Period
August 10, 2018 through
August 31, 2018 | |
Revenues: | | | |
Net Sales | | 4,510,478 | |
Other Revenues | | 903,796 | |
Total Net Revenue | | 5,414,274 | |
| | | |
Costs and Expenses: | | | |
Cost of Product Revenues | | 2,023,291 | |
Gross Margin | | 3,390,983 | |
| | | |
Operating Expenses: | | | |
Selling, General and Administrative | | 2,650,849 | |
Research and Development | | 290,004 | |
Leaseholder Improvements and Fixed Asset Write-off | | 1,833,049 | |
Other Operating Expenses | | (91,427 | ) |
Total Costs and Expenses | | 4,682,475 | |
| | | |
Income / (Loss) from operations | | (1,291,492 | ) |
Other Income / (Expense), net | | 703,890 | |
Earnings / (Loss) before incoming taxes | | (587,602 | ) |
Income Tax Expense | | — | |
Net Income / (Loss) | | (587,602 | ) |
These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.
4
U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
ARALEZ PHARMACEUTICALS US INC., et al.,
(Debtors in Possession)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of the Debtors have been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Code (referred to herein as the “Monthly Operating Report”). The Monthly Operating Report is limited in scope, covers a limited time period and the schedules contained herein were not audited or reviewed by independent accountants nor are they intended to reconcile to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. The Debtors reserve all rights to supplement or amend any scheduled contained in this Monthly Operating Report.
The information presented herein is subject to further review and potential adjustments, and has not been subject to all procedures that would typically be applied to financial information presented in accordance with Generally Accepted Accounting Principles in the United States of America (“US GAAP”), including, but not limited to, accruals, tax provision and other recurring adjustments considered necessary by management to fairly state the financial position and results of operations for the interim period(s) presented. Furthermore, the Monthly Operating Report does not contain all disclosures that would be required for presentation with US GAAP and there can be no assurance that, from the perspective of an investor or potential investor, the Monthly Operating Report is complete. As part of their restructuring efforts, the Debtors are reviewing their assets and liabilities on an ongoing basis, including without limitation with respect to intercompany claims and obligations, and nothing contained in this Monthly Operating Report shall constitute a waiver of any of the Debtors’ rights with respect to such assets, liabilities, claims and obligations that may exist.
The Debtors’ condensed consolidated financial statements presented herein have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. Furthermore, the condensed consolidated financial statements contained herein have been prepared following the guidance in Financial Accounting Standards Codification 852 “Reorganizations.” The Debtors continue to analyze and reconcile the liabilities reflected on the balance sheet, and, therefore, the amounts reflected herein are current estimates and subject to change as additional analysis and decisions are completed.
The Debtors caution readers not to place undue reliance upon the information contained in this Monthly Operating Report. The results herein are not necessarily indicative of results which may be expected from any other period or for the full year and may not necessarily reflect the combined results and financial position of the Debtors in the future.
These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.
5
U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
ARALEZ PHARMACEUTICALS US INC., et al.,
(Debtors in Possession)
ACCOUNTS RECEIVABLE AGING SCHEDULE
AUGUST 31, 2018
(UNAUDITED)
Current accounts receivable | | $ | 44,839,951 | |
| | | |
Past due: | | | |
1 - 30 Days | | 460,950 | |
31 - 60 Days | | 81,603 | |
61 - 90 Days | | 166,033 | |
Over 90 Days | | 63,038 | |
Total gross accounts receivable | | 45,611,576 | |
| | | |
Reserve for Chargebacks | | 15,853,430 | |
Reserve for Cash Discounts | | 720,141 | |
Reserve for Sales Cutoff | | 255,810 | |
Total accounts receivable reserves | | 16,829,381 | |
| | | |
Accounts receivable, net | | $ | 28,782,195 | |
These condensed consolidated financial statements and accompanying notes do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America, nor are they intended to be fully reconciled to any financial statements otherwise prepared or distributed by the Debtors or any of the Debtors’ affiliates. This information is unaudited and is subject to further review and potential adjustments. The accompanying notes are an integral part of these condensed consolidated financial statements.
6
