EX-99.3 4 a993morseptember2017-hhgdi.htm EXHIBIT 99.3 Exhibit


 
 
 
 
 
 
 
 
 
Exhibit 99.3
 
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
 
 
 
 
 
 
 
 
 
 
 
 
In re
HHG Distributing LLC
Case No.
17-01304-11
 
 
Debtors
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
"MONTHLY OPERATING REPORT
 HHG Distributing LLC
 
 
 
 
INDEX TO CONDENSED FINANCIAL STATEMENTS AND SCHEDULES
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED FINANCIAL STATEMENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Statement of Income
 
 
 
2
 
 
Condensed Balance Sheet
 
 
 
 
3
 
 
Condensed Statement of Cash Flows
 
 
 
4
 
 
 
 
 
 
 
 
 
 
 
 
SCHEDULES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule 1 -
Total Disbursements
 
 
 
5
 
 
Schedule 2 -
Bank Reconciliations
 
 
 
 
6
 
 
Schedule 3 -
Total Disbursements to Retained Professionals
 
 
7
 
 
Schedule 4 -
Summary of Unpaid Post-Petition Debts
 
 
8
 
 
Schedule 5 -
Schedule of Federal, State, and Local Taxes Collected, Received, Due or Withheld
 
 
 
9
 
 
Schedule 6 -
Accounts Receivable Aging
 
 
 
10
 
 
Schedule 7 -
 Questionnaire
11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the documents attached are true and correct to the best of my knowledge and belief.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signature of Debtor
 
 
 
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signature of Joint Debtor
 
 
 
Date
 
 
 
 
 
 
 
 
/s/ Kevin Kovacs
 
 
 
10/11/2017
 
 
Signature of Authorized Individual*
 
 
 
Date
 
 
 
 
 
 
 
 
Kevin Kovacs
 
 
 
CFO
 
 
 
 
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.
 





HHG Distributing LLC
 
DEBTORS AND DEBTORS IN POSSESSION
 
Condensed Consolidated Statement of Income (unaudited)
 
 
 
 
 For the Period of
 
 September 1, 2017 to
(In Thousands)
September 30, 2017
 
 
Net Sales
$

Cost of Goods Sold

Gross Profit

 
 
Operating Expenses:
 
Advertising Expense, Net

Occupancy Costs

Data Communications

Repair and Maintenance

Company Insurance (Non-Medical)

Employee Benefits

Wage Expense

Employee Services

Travel and Entertainment

Bank Transaction Fees

Professional Fees

Stock Compensation Expense (Benefit), Net

Gain/Loss on Early Extinguishment of Debt

Depreciation and Amortization

Administrative and Sales Expense

Product Services Expense

Bad Debts

 
 
 
 
Total Operating Expenses

 
 
Operating Income

 
 
Interest Expense, net

Other Income/(Expense)

 
 
Income Before Taxes

 
 
Income Tax Expense/(Benefit)

 
 
Net Income
$

 
 





HHG Distributing LLC
 
DEBTORS AND DEBTORS IN POSSESSION
 
Condensed Consolidated Balance Sheet (unaudited)
 
 
 
 
 
 
 As of
(In Thousands)
9/30/2017
 
 
Assets
 
Cash
$

Credit Card and Trade Accounts Receivable, Net

Accounts Receivable - Other

Merchandise Inventories

Prepaid Expenses and Other Assets

Income Taxes Receivable

Total Current Assets

 
 
Property and Equipment, Net

Capitalized Financing Fees, Net

Goodwill

Trademarks, Net

Other Assets, Net

 
 
Total Assets

 
 
Liabilities and Stockholders' Deficit
 
Accounts Payable

Outstanding Customer Deposits, Credits, Refunds

Unredeemed Gift Card Liability

Other Accrued Expenses

Deferred Tax Liability

DIP Loans

 
 
 
 
Total Current Liabilities

 
 
Deferred Rent

LT Deferred Compensation

Other Long-term Liabilities

Liabilities Subject to Compromise
$

 
 
Total Liabilities

 
 
    Preferred Stock

Common Stock

Retained Earnings / (Accumulated Deficit)

Treasury Stock

Additional Paid-in Capital

Total Stockholders' Deficit

 
 
 
 
Total Liabilities and Stockholders' Deficit
$






HHG Distributing LLC
 
DEBTORS AND DEBTORS IN POSSESSION
 
Condensed Consolidated Statement of Cash Flows (unaudited)
 
 
 
 
 
For the Period of
 
 
September 1, 2017 to
 
(In Thousands)
September 30, 2017
 
Cash flows from operating activities:
 
 
     Net cash provided by (used in) operating activities
$

 
 
 
 
Cash flows from investing activities:
 
 
     Purchases of property and equipment

 
     Proceeds from sale of property and equipment

 
     Other

 
     Net cash used in investing activities

 
 
 
 
Cash flows from financing activities:
 
 
     Net Borrowings (Repayments) on Line of Credit

 
 

 
 
 
 
Increase/(decrease) in cash and cash equivalents

 
 
 
 
Cash and cash equivalents at beginning of period

 
 
 
 
Cash and cash equivalents at end of period
$

 





HHG Distributing LLC
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
Total Disbursements by Filed Legal Entity (unaudited)
 
 
 
 
 
 
(In Thousands)
 
 
 
 
For the Period of September 1, 2017 to September 30, 2017
 
 
Legal Entity
 
Case Number
 
 Disbursements
HHG Distributing LLC
 
17-01304-11
 

 








HHG Distributing LLC
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
Bank Reconciliations (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
G/L Acct
Account Name
Bank Acct #
Debtor
Description
Bank Balance
Ledger Balance
As of Date
Reconciled
NOTE: No bank accounts are held by HHG Distributing LLC.
 
 





HHG Distributing LLC
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
Total Disbursements to Retained Professionals (unaudited)
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
For the Period of September 1, 2017 to September 30, 2017
Retained Professionals
 
Approved Amounts (1)
 
Disbursements
MORGAN, LEWIS & BOCKIUS LLP
Legal Services
 
1,019

 

STIFEL, NICOLAUS & COMPANY INC
Bankruptcy Services
 

 

BERKELEY RESEARCH GROUP LLC
Bankruptcy Services
 
2,088

 

DONLIN, RECANO & COMPANY INC
Bankruptcy Services
 

 

ICE MILLER LLP
Legal Services
 
763

 

BINGHAM GREENBAUM DOLL LLP
Bankruptcy Services
 
67

 

MALFITANO PARTNERS
Bankruptcy Services
 
66

 

COOLEY LLP
Bankruptcy Services
 
1,045

 

PROVINCE, INC.
Bankruptcy Services
 
390

 
 
DLA PIPER LLP US
Bankruptcy Services
 

 
 
FAEGRE BAKER DANIELS LLP
Bankruptcy Services
 

 
 
 
 
 
 
 
 
Total
$
5,438

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Approved amounts represent the amount of fees and expenses that were approved by court order for payment by the Debtors to each professional through September 2017.






HHG Distributing LLC
 
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
 
Summary of Unpaid Post-Petition Debts (unaudited)
 
 
As of 9/30/2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
HHG Distributing LLC (17-01304-11)
 
 
 Number of Days Past Due
 
Current
 0-30
31-60
61-90
Over 90
Total
Accounts Payable






Wages Payable






Taxes Payable






Rent/Leases-Building






Utilities Payable






Insurance Reserves






Secured Debt/Adequate Protection Payments






Professional Fees






Amounts Due to Insiders






Outstanding Customer Deposits, Credits, Refunds (1)






Unredeemed Gift Card Liability






Deferred Rent






LT Deferred Compensation






Other






Total Post-Petition Debts






 
 
 
 
 
 
 
 
 
 
 
 
 
 





HHG Distributing LLC
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
Schedule of Federal, State, & Local Taxes Collected, Received, Due or Witheld (unaudited)
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
For the Period of September 1, 2017 to September 30, 2017
 
 
 
 
Beginning Tax Liability
Amount Withheld or Accrued
Amount Paid
Date Paid
Check No. or EFT
Ending Tax Liability
Federal
 
 
 
 
 
 
Withholding



 
 

FICA - Employee



 
 

FICA - Employer



 
 

Unemployment



 
 

Income



 
 

Total Federal Taxes



 
 

 
 
 
 
 
 
 
State and Local
 
 
 
 
 
 
Withholding



 
 

Sales and Use



 
 

Excise


 
 

Unemployment



 
 

Real Property



 
 

Personal Property



 
 

Other



 
 

Total State and Local



 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





HHG Distributing LLC
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
 
Accounts Receivable Aging (unaudited)
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
As of September 30, 2017
 
 
 
 
 
Accounts Receivable Reconciliation
 
Credit Card Receivables
Trade Accounts Receivable
 
Total Credit Card and Trade Accounts Receivable
Total Accounts Receivable at the beginning of the reporting period
 
$

$

 
$

+ Amounts billed during the period
 


 
$

- Amounts collected during the period
 


 
$

- Other Adjustments (Writeoffs/Credit Memos/Adjustments/Chargebacks/Signifyd Funding)
 


 
$

Total Accounts Receivable at the end of the reporting period
 
$

$

 
$

 
 
 
 
 
 
As of September 30, 2017
 
 
 
 
Accounts Receivable Aging
 
 
 
 
 
 
 
 
 
 
 
< 90
 


 
$

91+
 


 
$

Total Accounts Receivable
 


 
$

Amount Considered Uncollectible
 


 
$

Accounts Receivable, Net
 
$

$

 
$

 
 
 
 
 
 
NOTES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





HHG Distributing LLC
 
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
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 post-petition tax returns been filed timely? 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 has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.
 
X
Account Name
Purpose
Business
Acct Number
Bank Name
Date