8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 28, 2021

FHC HOLDINGS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

	Delaware
001-35239	(State or Other Jurisdiction of Incorporation)	20-8874704
(Commission File Number)		(I.R.S. Employer Identification No.)
8760 Clay Road, Houston, Texas		77080
(Address of Principal Executive Offices)		(Zip Code)

(713) 864-1358

(Registrant’s Telephone Number, Including Area Code)

Francesca’s Holding Corporation

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 7.01 Regulation FD Disclosure.

As previously reported, on December 3, 2020, FHC Holdings Corporation (the “Company”) (f/k/a Francesca’s Holding Corporation) and each of its subsidiaries (together with the Company, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) for relief under chapter 11 of title 11 of the United States Code, §§ 101-1532, et seq. in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Chapter 11 Cases are being jointly administered under the caption In re: Francesca’s Holdings Corporation, et al., Case No. 20-13076 (BLS). 

On May 28, 2021, the Debtors filed with the Bankruptcy Court their monthly operating report for the period beginning April 4, 2021 and ending May 1, 2021 (the “Monthly Operating Report”). This Current Report on Form 8-K, including the exhibit hereto (the “Form 8-K”), will not be deemed an admission as to the materiality of any information disclosed herein. The Monthly Operating Report and other documents filed with the Bankruptcy Court are available for review and free of charge online at https://cases.stretto.com/francescas. Documents and other information available on such website are not part of this Form 8-K and are not deemed to be incorporated by reference in this Form 8-K.

A copy of the Monthly Operating Report is furnished as Exhibit 99.1 to this report and is incorporated herein by reference. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Cautionary Statement Regarding the Monthly Operating Report

The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. The Monthly Operating Report is limited in scope, covers a limited time period and has been prepared solely for the purpose of complying with the reporting requirements of the Bankruptcy Court. The Monthly Operating Report was not audited or reviewed by independent accountants, was not prepared in accordance with generally accepted accounting principles, is in a format prescribed by applicable bankruptcy laws or rules, and is subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in the Company’s securities, the Monthly Operating Report is complete. Results and projections set forth in the Monthly Operating Report should not be viewed as indicative of future results.

Cautionary Statement Regarding Forward-Looking Information

Certain statements in the Monthly Operating Report are “forward-looking statements” made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that are expected. These risks and uncertainties include, but are not limited to, the following: risks attendant to the bankruptcy process, including the Company’s ability to obtain court approval from the Bankruptcy Court with respect to the Company’s proposed plan of liquidation filed in the Chapter 11 Cases or other motions or requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of the Chapter 11 Cases, including increased legal and other professional costs incurred in connection with the administration of the Chapter 11 Cases, on the Company’s liquidity (including the availability of operating capital during the pendency of the Chapter 11 Cases), and the results of business prospects during the Chapter 11 Cases; the length of time that the Company will operate under chapter 11 protection; risks associated with third-party motions in the Chapter 11 Cases and the Company’s ability to realize proceeds from remaining assets; Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general; risks associated with the Company’s ongoing closing of boutiques in connection with the Company’s completed asset sale; and risks related to the trading of the Company’s common stock on the OTC Pink Market and impacts from the delisting of the Company’s common stock from the Nasdaq Stock Market LLC. For additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from those contained in the Company’s forward-looking statements, please refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended February 2, 2020 filed with the SEC on May 1, 2020. The Company undertakes no obligation to publicly update or revise any forward-looking statement.

Item 9.01 Financial Statements and Exhibits.

(d)  Exhibits

Exhibit No.	Description
99.1	Monthly Operating Report

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRANCESCA’S HOLDINGS CORPORATION
Date: June 3, 2021	By:	/s/ Anthony Saccullo
		Anthony Saccullo
		Chief Wind-Down Officer

EX-99.1

Exhibit 99.1

united states bankruptcy court
district of DELAWARE

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MONTHLY OPERATING REPORT

Reporting Period: April 4, 2021 – May 1, 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

Page 1 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

Notes to the Monthly Operating Report (“MOR”)

Reporting Period: April 4, 2021 – May 1, 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 April 4, 2021 through May 1, 2021.

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”).

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 April 4, 2021 to May 1, 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 May 1, 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.

Page 2 of 15

Notes to MOR-2 and MOR-3:

This MOR has been prepared on a legal entity basis for the Debtors.

As a result of the Debtors’ chapter 11 filings, the payment of prepetition indebtedness is subject to compromise or other treatment under the Debtors’ proposed chapter 11 plan of liquidation [D.I. 737] (as may be amended, altered, or modified, the “Plan”). 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 Debtors’ proposed Plan is confirmed by the Bankruptcy Court and goes effective and all deadlines to file claims and requests for payment of administrative expenses have passed. The Debtors continue to reconcile claims that have been, or may be, in whole or in part, satisfied through the Sale Transaction consummated in these cases and related transactions and or agreements. Future MORs will reflect these continuing reconciliation efforts. 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.

Page 3 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-1

Schedule of Cash Receipts and Disbursements

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

													Cumulative[1]
#		FCI			FSC			FHC			FLLC		4/4/21 - 5/1/21
1	Receipts
2	Credit Card and Cash Receipts[2]	$	-		$	-		$	2,260,450		$	-	$	2,260,450
3	Inventory Liquidation		-			-			-			-		-
4	Federal Tax Refund		-			-			-			-		-
5	Total Receipts	$	-		$	-		$	2,260,450		$	-	$	2,260,450
6	Operating Disbursements
7	Payroll & Taxes[3]		20,208			1,734			-			-		21,942
8	Rent[4]		14,992			-			-			-		14,992
9	Inventory		-			-			-			-		-
10	Sales Tax[5]		9,128			-			-			-		9,128
11	Merchant Fees		-			-			-			-		-
12	Employee Benefits		-			-			-			-		-
13	Marketing		-			-			-			-		-
14	Professional/Computer Services[6]		-			8,641			-			-		8,641
15	Other A/P[7]		235,193			3,822			-			-		239,014
16	Total Operating Disbursements		279,520			14,197			-			-		293,717
17	Net Cash Flow from Operations	$	(279,520	)	$	(14,197	)	$	2,260,450		$	-	$	1,966,733
18	Non-Operating Disbursements / (Receipts)
19	Debt Service		-			-			-			-		-
20	State Taxes		-			-			-			-		-
21	Federal Taxes		-			-			-			-		-
22	CapEx		-			-			-			-		-
23	Tenant Allowance		-			-			-			-		-
24	Total Non-Operating Disbursements / (Receipts)		-			-			-			-		-
25	Net Cash Flow Before Restructuring	$	(279,520	)	$	(14,197	)	$	2,260,450		$	-	$	1,966,733
26	Restructuring Related Disbursements
27	Professional Fees[8]		-			151,951			-			-		151,951
28	Credit Card Program Deposits		-			-			-			-		-
29	Utility Deposit and Other Reserves		-			-			-			-		-
30	503(b)(9) and Critical Vendor Payments		-			-			-			-		-
31	KEIP/KERP		-			-			-			-		-
32	UST Fees		-			-			-			-		-
33	DIP Fees & Interest - Term		-			-			-			-		-
34	DIP Fees & Interest - Revolver		-			-			-			-		-
35	Prepetition Term Loan Repayment		-			-			-			-		-
36	Cure Costs		-			-			-			-		-
37	Funding to Professional Fee Account		-			-			-			-		-
38	Total Restructuring Related Disbursements		-			151,951			-			-		151,951
39	Net Cash Flow	$	(279,521	)	$	(166,148	)	$	2,260,450		$	-	$	1,814,782
40	Beginning Cash Balance	$	2,210,217		$	(287,255	)	$	5,805,289		$	-	$	7,728,251
41	Net Cash Flow		(279,521	)		(166,148	)		2,260,450			-		1,814,782
42	Borrowings		-			-			-			-		-
43	Repayments		-			-			-			-		-
44	Intercompany		-			800,000			(800,000	)		-		-
45	Change in deposits in transfer		-			-			-			-		-
46	Ending Cash Balance	$	1,930,696		$	346,597		$	7,265,739		$	-	$	9,543,033

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]	Credit card and cash receipts includes $2.3M return of purchase price escrow following working capital adjustment finalization.
[3]	Payroll & taxes include payment of $22K of payroll taxes for Q1 2021.
[4]	Rent disbursements include $15K of January 2021 rent catch up payments.
[5]	Sales taxes include $9K January 2021 sales tax payments.
[6]	Professional/computer services disbursements include $9K of payments to technology service providers.
[7]	FCI Other AP disbursements primarily include payments to one telecommunications vendor, as well as property tax and utility payments.  FSC Other AP disbursements include utility payments and gift card fees.
[8]	Restructuring professional fees reflects $152K payment to claims agent from FSC operating account 8238.

Page 4 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-1a

Bank Account Balances, Debtor Statement with Respect to Bank Account Reconciliations

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

#	Debtor Entity	Account Number (Last 4 Digits)		Bank	Account Type	Period Ended 5/1/2021[1]
1	FHC Collections, Inc.		4644	Chase	Checking[2]		1,930,696
2	FHC Collections, Inc.		4669	Chase	Checking		-
3	FHC Holdings Corporation		9350	Chase	Checking		7,265,739
4	FHC Services Corporation		8238	Chase	Checking[3]		346,597
5			Reported Cash and Cash Equivalents at 4/3/2021			$	9,543,033
6	FHC Services Corporation		5317	Chase	Professional Fee Account[4]		1,935,579

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]	Excludes $(104,499) of cash on bank statement that is property of the Buyer. Includes $107,104 of outstanding checks not included on bank statement.
[3]	Excludes $499,422 of cash on bank statement that is property of the Buyer. Includes $69,718 of outstanding checks not included on bank statement.
[4]	Professional Fee Account is included in restricted cash on Debtors' Balance Sheet. Other restricted cash accounts are not included on MOR-1a.

Page 5 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-1a

Debtor Attestation to with Respect to Bank Account Reconciliations, Bank Statements and Open/Closed Bank Accounts

Reporting Period: April 4, 2021 – May 1, 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 in April.

Anthony M. Saccullo	Date
Wind-Down Officer

Page 6 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-1b

Schedule of Professional Fees and Expenses Paid

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

			Period Covered			Amount Paid this Period[1]				Amount Paid Case to Date
#	Payee	Role	Beginning Date	End Date	Payment Date	Fees		Expenses		Fees		Expenses
1	Bankruptcy Management Solutions, Inc.	Claims Agent	February 1, 2021	February 28, 2021	4/16/2021	$	38,948	$	152,627	$	204,099	$	606,301
	Total					$	38,948	$	152,627	$	204,099	$	606,301

Footnotes:

[1] Payment to Bankruptcy Management Solutions, Inc. includes $152K cash payment from FSC operating account 8238 and $40K application of retainer on file.

Page 7 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-2

Statement of Operations by Legal Entity

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

#	Category	FCI			FSC			FHC		FLLC		Consolidated
1	Net sales	$	-		$	-		$	-	$	-	$	-
2	Cost of goods sold and occupancy costs[1]		40,349			-			-		-		40,349
3	Gross profit		(40,349	)		-			-		-		(40,349	)
4	Selling, general and administrative expenses[2]		1,380			264,501			-		-		265,881
5	(Loss) income from operations		(41,729	)		(264,501	)		-		-		(306,230	)
6	Restructuring (expenses)[3]		-			(1,060,106	)		-		-		(1,060,106	)
7	Gain (loss) on assets[4]		158,987			(168,263	)		-		-		(9,277	)
8	Interest income (expense)		-			-			-		-		-
9	Other income (expense)[5]		(1,147	)		-			-		-		(1,147	)
10	(Loss) income before income tax expense		116,111			(1,492,870	)		-		-		(1,376,760	)
11	Income tax expense		-			-			-		-		-
12	Net (loss) income	$	116,111		$	(1,492,870	)	$	-	$	-	$	(1,376,760	)

Footnotes:
[1]	FCI cost of goods sold & occupancy costs primarily represents a true-up to actuals for trash and utilities, 2020 property taxes and commercial activity taxes,  and expense for January variable rent.
[2]	FSC selling, general and administrative ("SG&A") expenses are primarily related to D&O insurance expense and non-restructuring professional fees.  FCI SG&A expenses are primarily related to expense adjustments for supplies and telephone.
[3]	Restructuring expenses includes $1.1M of restructuring professional fees.
[4]	FSC loss on assets of $168K includes $121K loss due to reduction in Sale Transaction purchase price from working capital adjustment and $47K net loss on deposits transferred as a part of the Sale Transaction.  FCI gain on assets includes $159K gain as a result of the payment of lease cures.
[5]	FCI other expense includes a true-up of December 2020 and January 2021 sales taxes.

Page 8 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-3

Balance Sheet by Legal Entity

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

Balance Sheet at 05/01/2021

#	Category	FCI			FSC			FHC			FLLC		Eliminations			Consolidated
	Assets
	Current Assets
1	Cash and cash equivalents	$	1,930,696		$	346,597		$	7,265,739		$	-	$	-		$	9,543,033
2	Accounts receivable[1]		34,152,129			255,292,687			1,250,000			-		(255,292,687	)		35,402,129
3	Inventories		3,796,328			-			-			-		(3,796,328	)		-
4	Prepaid expenses and other current assets[2]		856,798			8,412,340			-			-		-			9,269,138
5	Total Current Assets		40,735,950			264,051,624			8,515,739			-		(259,089,015	)		54,214,299
6	Operating lease right-of-use assets, net		-			-			-			-		-			-
7	Property and equipment, net		-			-			-			-		-			-
8	Other assets, Net[3]		72,888			(1	)		-			-		-			72,888
9	Total Assets	$	40,808,839		$	264,051,624		$	8,515,739		$	-	$	(259,089,015	)	$	54,287,187
	Liabilities And Stockholders' Equity
	Current Liabilities
10	Accounts payable	$	259,195,978		$	18,947,894		$	857,028		$	-	$	(255,292,687	)	$	23,708,212
11	Accrued liabilities[4]		188,681			240,538			-			-		-			429,219
12	Current portion of long-term debt		-			-			-			-		-			-
13	Current portion of operating lease liabilities[5]		54,804,944			101,918			-			-		-			54,906,862
14	Total Current Liabilities		314,189,603			19,290,351			857,028			-		(255,292,687	)		79,044,293
15	Operating lease liabilities		-			-			-			-		-			-
16	Long-term debt, net		-			-			-			-		-			-
17	Intercompany liabilities		(209,178,030	)		52,147,189			157,551,163			-		(520,322	)		-
18	Total Liabilities		105,011,573			71,437,540			158,408,190			-		(255,813,009	)		79,044,293
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		(64,202,734	)		184,004,545			(103,068,049	)		-		5,333,534			22,067,296
23	Treasury stock		-			-			(160,021,383	)		-		-			(160,021,383	)
24	Total Stockholders' Equity		(64,202,734	)		192,614,084			(149,892,451	)		-		(3,276,005	)		(24,757,106	)
25	Total Liabilities And Stockholders' Equity	$	40,808,839		$	264,051,624		$	8,515,739		$	-	$	(259,089,015	)	$	54,287,187

Footnotes:
[1]	Accounts receivable includes $34.0M income tax receivable, a $1.25M promissory note (due December 31, 2021) as a result of the Sale Transaction, and $140K of sales tax receivables.
[2]	Prepaid expenses and other current assets includes $774K of prepaid D&O insurance and restricted cash as detailed in the table below:

Entity	FCI	FCI	FSC	FSC	FSC
Account Description	Cure Escrow	Utility Deposit	Professional Fee	Stub Rent Escrow	D&O Insurence
Balance ($M)	$0.7	$0.2	$1.9	$3.7	$2.0

[3]	Other assets, Net includes $73K of prepetition boutique utility and security deposits held by FCI.
[4]	FCI accrued liabilities includes $167K of accrued payroll taxes and $21K of accrued sales tax.  FSC accrued liabilities includes $241K of accrued severance and payroll taxes.
[5]	Current portion of operating lease liabilities includes $29.9M of unpaid rent, $24.8M of lease rejection damages, and $243K of percent rent accruals. The leases associated with these liabilities are a part of ongoing negotiations and as such, the liability amount is subject to material change in future periods.

Page 9 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

Debtor Attestation with Respect to Postpetition Taxes

Reporting Period: April 4, 2021 – May 1, 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

Page 10 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-4

Summary of Unpaid Postpetition Debts

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

				Days Past Due[4]
#	Accounts Payable		Current		0 - 30 Days		31 - 60 Days		61 - 90 Days		>91 Days		Total
1	Combined Debtors[1][2][3]	$	13,144	$	13,254	$	117,699	$	18,163	$	511,244	$	673,504

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.
[4]	The Debtors' accounts payable system has incorrect aging information. The Debtors have paid post-petition invoices as they come due.

Page 11 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-5

Accounts Receivable Reconciliation and Aging

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

Accounts Receivable Reconciliation

#	Reconciliation	Beginning Accounts Receivable		Change in Accounts Receivable			Ending Accounts Receivable
1	Total Accounts Receivable[1][2]	$	35,498,789	$	(96,660	)	$	35,402,129

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	$	34,012,072	$	-	$	-	$	-	$	-	$	34,012,072	$	-	$	34,012,072
3	Transaction Receivables[3]		1,250,000		-		-		-		-		1,250,000		-		1,250,000
4	Sales Tax Receivables		140,057		-		-		-		-		140,057		-		140,057
5	Total Accounts Receivable[1][2]	$	35,402,129	$	-	$	-	$	-	$	-	$	35,402,129	$	-	$	35,402,129

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]	Transaction receivables includes the $1.25M promissory note due December 31, 2021.

Page 12 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

MOR-5

Debtor Questionnaire

Reporting Period: April 4, 2021 – May 1, 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.		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.		X1
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 There are no employees or locations being operated by the Debtors as of February 1, 2021. As such, the only insurance policy of the Debtors in effect as of February 1, 2021, is the Debtors’ D&O insurance.

Page 13 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

Exhibit A

Balance Sheet by Legal Entity

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

Opening Balance Sheet at 04/04/2021

#	Category	FCI			FSC			FHC			FLLC		Eliminations			Consolidated
	Assets
	Current Assets
1	Cash and cash equivalents	$	2,210,217		$	(287,255	)	$	5,805,289		$	-	$	-		$	7,728,251
2	Accounts receivable[1]		34,248,789			255,348,944			1,250,000			-		(255,348,944	)		35,498,789
3	Inventories		3,796,328			-			-			-		(3,796,328	)		-
4	Prepaid expenses and other current assets[2]		856,798			10,984,763			-			-		-			11,841,560
5	Total Current Assets		41,112,131			266,046,452			7,055,289			-		(259,145,271	)		55,068,601
6	Operating lease right-of-use assets, net		-			-			-			-		-			-
7	Property and equipment, net		-			-			-			-		-			-
8	Other assets, Net[3]		72,888			12,094			-			-		-			84,983
9	Total Assets	$	41,185,020		$	266,058,546		$	7,055,289		$	-	$	(259,145,271	)	$	55,153,584
	Liabilities And Stockholders' Equity
	Current Liabilities
10	Accounts payable	$	259,406,945		$	17,999,761		$	857,028		$	-	$	(255,348,944	)	$	22,914,790
11	Accrued liabilities[4]		220,423			242,272			-			-		-			462,695
12	Current portion of long-term debt		-			-			-			-		-			-
13	Current portion of operating lease liabilities[5]		55,054,526			101,918			-			-		-			55,156,445
14	Total Current Liabilities		314,681,894			18,343,952			857,028			-		(255,348,944	)		78,533,930
15	Operating lease liabilities		-			-			-			-		-			-
16	Long-term debt, net		-			-			-			-		-			-
17	Intercompany liabilities		(209,178,030	)		53,607,640			156,090,713			-		(520,322	)		-
18	Total Liabilities		105,503,864			71,951,591			156,947,740			-		(255,869,266	)		78,533,930
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		(64,318,844	)		185,497,415			(103,068,049	)		-		5,333,534			23,444,056
23	Treasury stock		-			-			(160,021,383	)		-		-			(160,021,383	)
24	Total Stockholders' Equity		(64,318,844	)		194,106,954			(149,892,451	)		-		(3,276,005	)		(23,380,346	)
25	Total Liabilities And Stockholders' Equity	$	41,185,020		$	266,058,546		$	7,055,289		$	-	$	(259,145,271	)	$	55,153,584

Footnotes:
[1]	Accounts receivable include $34.0M of income tax receivables, a $1.25M promissory note (due December 31, 2021) as a result of the Sale Transaction, and $237K of sales tax receivables.
[2]	Prepaid expenses and other current assets include $970K of prepaid assets (primarily related to D&O insurance) and restricted cash as detailed in the table below:

Entity	FCI	FCI	FSC	FSC	FSC	FSC
Account Description	Cure Escrow	Utility Deposit	Professional Fee	Stub Rent Escrow	Purchase Price Escrow		D&O Insurance
Balance ($M)	$0.7	$0.2	$1.9	$3.7	$2.4		$2.0

[3]	Other assets, Net includes $73K 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.
[4]	FCI accrued liabilities includes $188K of accrued payroll taxes and $33K of accrued sales tax.  FSC accrued liabilities includes $242K of accrued severance and payroll taxes.
[5]	FCI current portion of operating lease liabilities includes $30.0M of unpaid rent, $24.8M of lease rejection damages, and $256K of percent rent accruals.

Page 14 of 15

In re:	Case No. 20-13076 (BLS)
FHC Holdings Corporation, et al.	Reporting Period: April 4, 2021 – May 1, 2021
Debtors

Exhibit B

Disbursements by Legal Entity

Reporting Period: April 4, 2021 – May 1, 2021

($’s in USD)

#	Debtor Name	Abbreviation	Case Number	Disbursements[1]
1	FHC Holdings Corporation	FHC	20-13076	$	-
2	FHC, LLC	FLLC	20-13077		-
3	FHC Collections, Inc.	FCI	20-13078		279,520
4	FHC Services Corporation	FSC	20-13079		166,148
5	Total			$	445,668

[1] Includes disbursements made April 4, 2021 - May 1, 2021.  

Page 15 of 15