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): December 19, 2019

Insys Therapeutics, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-35902	51-0327886
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
410 S. Benson Lane Chandler, Arizona		85224
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (480) 500-3127

Not Applicable

(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 (see General Instructions A.2. below):

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

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

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

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

Securities registered or to be registered pursuant to Section 12(b) of the Act.*

Title Of Each Class	Trading Symbol	Name Of Each Exchange On Which Registered
Common Stock, $0.01 Par Value Per Share	INSYQ	N/A

* On June 24, 2019, a Form 25 relating to the delisting and deregistration under Section 12(b) of the Act of the registrant’s common stock was filed by The Nasdaq Stock Market LLC.  The registrant’s common stock trades on the OTC Pink Sheets Market.

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 ☐

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. ☐

Item 7.01Regulation FD Disclosure

As previously disclosed, on June 10, 2019, Insys Therapeutics, Inc. (the “Company”) and its subsidiaries (collectively, the “Debtors”) filed voluntary petitions (the “Bankruptcy Petitions,” and the cases commenced thereby, the “Chapter 11 Cases”) for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).  Also as previously disclosed, on July 2, 2019, the Bankruptcy Court entered an order that, among other things, established bidding procedures to sell substantially all of the Debtors’ assets in accordance with Section 363 of the Bankruptcy Code (“Section 363”).  

On December 20, 2019, the Company filed its monthly operating report for the period beginning October 1, 2019 and ending October 31, 2019 (the “Monthly Operating Report”) with the Bankruptcy Court. The Monthly Operating Report is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information set forth in Item 7.01 of this Current Report on Form 8-K (including the exhibit hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely by Regulation FD.

In accordance with General Instruction B.2 of Form 8-K, the information being furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 8.01Other Events

As previously disclosed, on December 2, 2019, the Company entered into an Asset Purchase Agreement (the “Renaissance Purchase Agreement”) with Renaissance Lakewood, LLC, a Delaware limited liability company (“Renaissance”), pursuant to which the Company agreed to sell, transfer and assign to Renaissance, pursuant to Section 363, certain equipmentand related records, in consideration for a purchase price of $275,000 in cash payable at the closing of the transaction.  On December 16, 2019, the Bankruptcy Court approved an order authorizing the sale contemplated by the Renaissance Purchase Agreement.  On December 19, 2019, the Company consummated the transactions contemplated by the Renaissance Purchase Agreement.

Also as previously disclosed, on September 25, 2019, the Company entered into an Asset Purchase Agreement (the “Pharmbio Purchase Agreement”) with Pharmbio Korea, Inc., a company organized under the laws of the Republic of Korea (“Pharmbio”), pursuant to which the Company agreed to sell, transfer and assign to Pharmbio, pursuant to Section 363, specified intellectual property, including patents and rights to the Assigned Marks (as such term is defined in the Pharmbio Purchase Agreement), records and certain other assets related to all strengths, doses and formulations in the Republic of Korea, Japan, China, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Vietnam of the Company’s Subsys® (fentanyl sublingual spray) product, in consideration for a purchase price of $1,200,000 in cash payable at the closing of the transaction.  On October 16, 2019, the Bankruptcy Court approved an order authorizing the sale contemplated by the Pharmbio Purchase Agreement.  On December 20, 2019, the Company consummated the transactions contemplated by the Pharmbio Purchase Agreement.

The foregoing descriptions of the Renaissance Purchase Agreement and the Pharmbio Purchase Agreement do not purport to be complete and are subject to, and qualified in their entirety by, respectively, the full text of the Renaissance Purchase Agreement, a copy of which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) on December 3, 2019, and the Pharmbio Purchase Agreement, a copy of which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the SEC on September 26, 2019, both of which are incorporated herein by reference.

Cautionary Statements Regarding Trading in the Company’s Securities

The Company cautions that trading in the Company’s securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks.  Trading prices for the Company’s securities may bear little or no relationship to the actual recovery, if any, by holders of the Company’s securities in the Chapter 11 Cases.  It is unlikely that holders of the Company’s common stock will receive any recovery on account of such securities.

Cautionary Statements Regarding Forward-Looking Information

This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,”

“expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “intend” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words.  All statements, other than statements of historical facts, included in this filing that address activities, events or developments that the Company expects, believes, targets or anticipates will or may occur in the future are forward-looking statements. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which could include the following: risks and uncertainties relating to the Chapter 11 Cases, including but not limited to, the terms of and potential transactions contemplated by the Second Amended Plan and the Second Amended Disclosure Statement, the anticipated mailing date of the solicitation materials concerning the Second Amended Plan, the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 Cases, the effects of the Chapter 11 Cases on the Company and on the interests of various constituents, Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general, the length of time the Company will operate under the Chapter 11 Cases, risks associated with third-party motions in the Chapter 11 Cases, the potential adverse effects of the Chapter 11 Cases on the Company’s liquidity or results of operations and increased legal and other professional costs necessary to execute the Company’s reorganization; the effects of disruption from the Chapter 11 Cases making it more difficult to maintain business and operational relationships, to retain key executives and to maintain various licenses and approvals necessary for the Company to conduct its business; uncertainty associated with the Company’s ability to complete the sale of its remaining assets as contemplated by the Bankruptcy Petitions; trading price and volatility of the Company’s common stock as well as other risk factors set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC in addition to those factors, risks and uncertainties described in more detail in the Company’s risk factors set forth in Exhibit 99.1 to the Current Report on Form 8-K filed by the Company with the SEC on August 8, 2019. The Company therefore cautions readers against relying on these forward-looking statements. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information Regarding the Chapter 11 Cases

Bankruptcy Court filings and other information related to the Chapter 11 Cases are or will be available at a website administered by the Company’s noticing and claims agent, Epiq Corporate Restructuring, LLC, at https://dm.epiq11.com/Insys. Information contained on, or that can be accessed through, such website or the Bankruptcy Court’s website is not part of this Current Report.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.	Description
99.1	Monthly Operating Report, for the period covering October 1, 2019 through October 31, 2019, filed with the United States Bankruptcy Court for the District of Delaware

SIGNATURES

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

Date: December 26, 2019Insys Therapeutics, Inc.

By: /s/ Andrece Housley

Name: Andrece Housley

Title: Chief Financial Officer

EX-99.1

Exhibit 99.1

united states bankruptcy court
district of DELAWARE

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MONTHLY OPERATING REPORT

Reporting Period: October 1, 2019 – October 31, 2019

REQUIRED DOCUMENTS	Form No.	Document Attached	Explanation Attached	Affidavit/ Supplement Attached
Schedule of Cash Receipts and Disbursements	MOR-1	X
Bank Account Balances, Debtor Statement with Respect to Bank Account Reconciliations	MOR-1a	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
Balance Sheet by Legal Entity	MOR-3	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-6	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.

/s/ Andrece Housley	12/19/19
Andrece Housley	Date
Chief Financial Officer of Insys Therapeutics, Inc.; et al.

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

Notes to the Monthly Operating Report

Reporting Period: October 1, 2019 – October 31, 2019

General:

The report includes activity from the following Debtors and related Case Numbers:

Case Number	Debtor Name
19-11292	Insys Therapeutics, Inc.
19-11293	IC Operations, LLC
19-11294	Insys Development Company, Inc.
19-11295	Insys Manufacturing, LLC
19-11296	Insys Pharma, Inc.
19-11297	IPSC, LLC
19-11298	IPT 355, LLC

This Monthly Operating Report is unaudited and has been prepared solely for the purpose of complying with the Debtors' obligations to provide monthly operating reports currently during these Chapter 11 Cases. This MOR is not prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and does not include all the information and footnotes required by U.S. GAAP. The Debtors have prepared this Monthly Operating Report using the best information presently available to them, which has been collected, maintained, and prepared in accordance with their historical accounting practices. This Monthly Operating Report is, thus, true and accurate to the best of the Debtors’ knowledge, information and belief based on current available data.

General Methodology: The Debtors prepared this Monthly Operating Report relying primarily upon the information set forth in their books and records. Consequently, certain transactions that are not identified in the normal course of business in the Debtors’ books and records may not be included in this Monthly Operating Report. Additionally, the information furnished in this report includes primarily normal recurring adjustments, but does not include all the adjustments that would typically be made for the quarterly and annual consolidated financial statements to be in accordance with U.S. 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 their quarterly and annual consolidated financial information in accordance with U.S. GAAP. Accordingly, upon the application of such procedures, the Debtors believe that the financial information may be subject to change, and these changes could be material. Nevertheless, in preparing this Monthly Operating Report, the Debtors made best efforts to supplement the information set forth in their books and records with additional information concerning transactions that may not have been identified therein.

Liabilities Subject to Compromise: The payment of prepetition indebtedness is subject to compromise or other treatment under a chapter 11 plan of reorganization.  The determination of the amount of such liabilities and how the liabilities will be settled and treated cannot be made until a Chapter 11 Plan of Reorganization is approved by the Bankruptcy Court. Liabilities subject to compromise have been reported at the amounts recorded on the Debtor’s books and records. The amounts classified as liabilities subject to compromise in the financial statements and supplemental schedules included herein are preliminary and may be subject to future adjustments depending on claims filed on and before the bar date, Bankruptcy Court actions, developments with respect to disputed claims, rejection of executory contracts, reconciliation of claims, and other events.

Reservation of Rights: Given the complexity of the Debtors’ business, inadvertent errors, omissions or over inclusion of contracts may have occurred. Accordingly, the Debtors hereby reserve all of their rights to dispute the validity, status, enforceability, or executory nature of any claim amount, representation or other statement in this Monthly Operating Report and reserve the right to amend or supplement this Monthly Operating Report, if necessary.

General Notes

On June 10, 2019 (the “Petition Date”), Insys Therapeutics, Inc. (“Insys Therapeutics”) and its affiliated debtors each commenced a voluntary case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors are authorized to operate their business and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment of a trustee or examiner has been made in these chapter 11 cases. The Debtors’ chapter 11 cases are being jointly administered for procedural purposes only under case number 19-11292 (KG) pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”).

Additional information about the Chapter 11 Cases, court filings and claims information is available on the internet at https://dm.epiq11.com/case/Insys/dockets

Page 2 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-1

Consolidated Schedule of Cash Receipts and Disbursements

Reporting Period: October 1, 2019 – October 31, 2019

($’s in USD)

#			For the Period Ended October 31, 2019			Cumulative 6/10/19 - 10/31/19
	1	Operating Receipts
	2	Sales Receipts (after GTN settled by credit)	$	2,045,804		$	14,964,292
	3	Sales Deductions		-			-
	4	Other Receipts		118,604			637,695
	5	Total Operating Receipts		2,164,408			15,601,988
	6	Operating Disbursements
	7	Employee Related		(1,131,194	)		(7,684,834	)
	8	Rent (Equipment & Buildings) & Utilities		(315,022	)		(1,115,455	)
	9	Manufacturing Costs		-			(59,642	)
	10	Gross-to-Nets (Direct Pay)		(736,215	)		(1,238,154	)
	11	Consulting / Prof. Fees		(62,514	)		(409,157	)
	12	Legal		(561,313	)		(896,773	)
	13	Research and Development / Regulatory		(242,478	)		(2,811,024	)
	14	Sales & Marketing		(9,000	)		(152,036	)
	15	General and Administrative		(465,688	)		(931,414	)
	16	Insurance		(17,277	)		(169,305	)
	17	Board of Directors Fees		(156,499	)		(659,808	)
	18	Advancements to BTcP		(2,909,822	)		(2,909,822	)
	19	Total Operating Disbursements		(6,607,022	)		(19,037,425	)
	20	Operating Cash Flow		(4,442,614	)		(3,435,437	)
	21	Bankruptcy Related Disbursements
	22	Professional Fees		(3,593,647	)		(5,820,319	)
	23	Vendor Deposits & Critical Vendors		-			(127,247	)
	24	Total Bankruptcy Related Disbursements		(3,593,647	)		(5,947,565	)
	25	Net Cash Flow		(8,036,262	)		(9,383,002	)
	26	Cash Balance[1]
	27	Beginning Cash Balance		53,672,883			38,019,624
	28	Net Cash Flow		(8,036,262	)		(9,383,002	)
	29	363 Sale Proceeds		13,402,171			30,402,171
	30	Ending Cash Balance	$	59,038,793		$	59,038,793

Footnotes:

(1) Cash balance represents book balance, which is net of outstanding checks and may differ from Bank Balance due to items in-transit and other timing items.

Page 3 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-1 (Continued)

Consolidated Schedule of Cash Receipts and Disbursements

Reporting Period: October 1, 2019 – October 31, 2019

($’s in USD)

	October Distribution by Debtor
	INSYS THERAPEUTICS, INC.		INSYS PHARMA, INC.		INSYS DEVELOPMENT COMPANY, INC.		IPSC, LLC		INSYS MANUFACTURING, LLC		IC OPERATIONS, LLC		IPT 355, LLC		Total
Total Disbursements	$	8,298,477	$	35,656	$	335,847	$	25	$	467,247	$	1,063,416	$	-	$	10,200,669

MOR-1a

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

Reporting Period: October 1, 2019 – October 31, 2019

($’s in USD)

#	Case Number	Debtor Entity	Account Number	Bank	Account Type	For the Period Ended 10/31/2019(1)
1	19-11293	IC Operations, LLC	XXXXX5620	Western Alliance	Checking		536,575
2	19-11293	IC Operations, LLC	XXXXX9623	Western Alliance	Checking		-
3	19-11294	Insys Development Company, Inc.	XXXXX5187	Western Alliance	Checking		225,675
4	19-11294	Insys Development Company, Inc.	XXXXX3863	Western Alliance	Checking		-
5	19-11295	Insys Manufacturing, LLC	XXXXX7170	Western Alliance	Checking		181,177
6	19-11295	Insys Manufacturing, LLC	XXXXX1178	Western Alliance	Checking		-
7	19-11292	Insys Therapeutics, Inc.	XXXXX5031	JP Morgan	Checking/ CC Deposit		70,204
8	19-11292	Insys Therapeutics, Inc.	XXXXX7833	Western Alliance	Money Market		15,484,243
9	19-11292	Insys Therapeutics, Inc.	XXXXX7655	Western Alliance	Professional Fee Escrow		3,999,995
10	19-11292	Insys Therapeutics, Inc.	XXXXX3750	Western Alliance	Utilities Deposit		31,500
11	19-11292	Insys Therapeutics, Inc.	XXXXX9735	Wells Fargo	Cash		37,911,428
12	19-11292	Insys Therapeutics, Inc.	XXXXX7215	Western Alliance	Lease Agreement Account		267,000
13	19-11292	Insys Therapeutics, Inc.	XXXXX5149	Western Alliance	Checking		285,092
14	19-11292	Insys Therapeutics, Inc.	XXXXX9155	Western Alliance	Checking		-
15	19-11297	IPSC, LLC	XXXXX3630	Western Alliance	Checking		45,904
16	19-11297	IPSC, LLC	XXXXX7638	Western Alliance	Checking		-
17					Total	$	59,038,793

Footnotes:

(1) Cash balance represents book balance, which is net of outstanding checks and may differ from Bank Balance due to items in-transit and other timing items.

Page 4 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-1a

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

Reporting Period: October 1, 2019 – October 31, 2019

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 October.

/s/ Andrece Housley	12/19/19
Andrece Housley	Date
Chief Financial Officer of Insys Therapeutics, Inc.; et al.

Page 5 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-1b

Schedule of Professional Fees and Expenses Paid

Reporting Period: October 1, 2019 – October 31, 2019

($’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	Weil, Gotshal & Manges LLP	Debtor Counsel	October 1, 2019	October 31, 2019	N/A	$	-	$	-	$	2,252,058	$	14,276
2	Richards, Layton, & Finger, P.A.	Local Debtor Counsel	October 1, 2019	October 31, 2019	Week Ended 10/18/19 and 10/25/19		917,748		36,981		917,748		36,981
3	FTI Consulting, Inc.	Debtor Financial Advisor	October 1, 2019	October 31, 2019	N/A	-		-		-		-
4	Lazard Ltd.	Debtor Investment Banker	October 1, 2019	October 31, 2019	Week Ended 10/4/19		160,000		2,972		320,000		2,972
5	Epiq Global	Claims Agent	October 1, 2019	October 31, 2019	N/A	-		-		-		-
6	Akin Gump Strauss Hauer & Field LLP	UCC Counsel	October 1, 2019	October 31, 2019	Week Ended 10/25/19		1,640,209		22,195		2,184,975		25,658
7	Bayard, P.A.	UCC Local Counsel	October 1, 2019	October 31, 2019	Week Ended 10/25/19		147,133		4,311		240,096		5,629
8	Province, Inc.	UCC Financial Advisor	October 1, 2019	October 31, 2019	Week Ended 10/11/19		646,632		4,980		844,432		5,643
9	Total					$	3,511,721	$	71,439	$	6,759,309	$	91,159

Page 6 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-2

Statement of Operations by Legal Entity

Reporting Period: October 1, 2019 – October 31, 2019

($’s in USD)

#	Category	Insys Therapeutics, Inc.			IC Operations, LLC			Insys Development Company, Inc.			Insys Manufacturing, LLC			Insys Pharma, Inc.			IPSC, LLC			IPT 355, LLC		Eliminations		Consolidated
		Case No.			Case No.			Case No.			Case No.			Case No.			Case No.			Case No.				10/1/19 -
		19-11292			19-11293			19-11294			19-11295			19-11296			19-11297			19-11298				10/31/19
1	Net Revenue	$	-		$	49,554		$	-		$	-		$	-		$	-		$	-	$	-	$	49,554
2	Cost of Revenue		3,291			5,381			(32	)		526,002		-			-			-		-			534,642
3	Total Gross Profit		(3,291	)		44,174			32			(526,002	)	-			-			-		-			(485,087	)
4	Operating expenses
5	Selling	-				183,680		-			-				(16,416	)		(9,600	)	-		-			157,664
6	Marketing	-				173,301		-			-				(27	)	-			-		-			173,274
7	Research and development	-				-			1,248,583			16					-			-		-			1,248,599
8	General and administrative		3,726,488			(225,475	)		25,997			7,435			(267,225	)		325		-		-			3,267,544
9	Restructuring Fees(1)		5,790,325		-			-			-				-		-			-		-			5,790,325
10	Intercompany fees	-			-			-			-				-		-			-		-			-
11	Charges related to litigation award		532,308		-			-			-				-		-			-		-			532,308
12	Total Operating Expenses		10,049,122			131,506			1,274,580			7,451			(283,668	)		(9,275	)	-		-			11,169,715
13	Income (loss) from operations		(10,052,413	)		(87,332	)		(1,274,547	)		(533,453	)		283,668			9,275		-		-			(11,654,802	)
14	Other income (expense), net:
15	Interest income (expense)		67,837		-			-			-			-			-			-		-			67,837
16	Other income (expense), net(2)		12,527,462			(252,471	)		(3,154,246	)		(33,397,526	)	-			-			-		-			(24,276,780	)
17	Total other income (expense), net		12,595,299			(252,471	)		(3,154,246	)		(33,397,526	)	-			-			-		-			(24,208,943	)
18	Income (loss) before income taxes:		2,542,886			(339,803	)		(4,428,793	)		(33,930,979	)		283,668			9,275		-		-			(35,863,745	)
19	Income tax expense (benefit)		314,373		-			-			-			-						-		-			314,373
20	Net income (loss)	$	2,228,513		$	(339,803	)	$	(4,428,793	)	$	(33,930,979	)	$	283,668		$9,275 $			-		$	-	$	(36,178,118	)

Footnotes:

(1) Restructuring Fees for all entities are shown at Insys Therapeutics and include accrued fees for restructuring professionals.

(2) Other income (expense), net includes certain Syndros and CBD related assets were sold pursuant to the Order approving the Asset Purchase Agreement between the Debtor and Chilion Group Holdings US, Inc.

Page 7 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-3

Balance Sheet by Legal Entity

Reporting Period: October 1, 2019 – October 31, 2019

($’s in USD)

#	Category	Insys Therapeutics, Inc.			IC Operations, LLC			Insys Development Company, Inc.			Insys Manufacturing, LLC			Insys Pharma, Inc.			IPSC, LLC		IPT 355, LLC		Eliminations			Consolidated
		Case No.			Case No.			Case No.			Case No.			Case No.			Case No.		Case No.					10/31/19
		19-11292			19-11293			19-11294			19-11295			19-11296			19-11297		19-11298
1	Assets
2	Current Assets
3	Cash and cash equivalents	$	58,017,962		$	568,074		$	225,675		$	181,177		$	-		$	45,904	$	-	$	-			59,038,793
4	Short-term investments		(0	)		-			-			-			-			-		-		-			(0	)
5	Intercompany		329,797,373			(13,816,493	)		(8,507,540	)		(351,150,417	)		83,756,101			2,350,659		-		(42,429,683	)		-
6	Trade accounts receivable, net		3,538,624			6,490,790			20						(2,672,932	)		-		-		-			7,356,503
7	Intercompany accounts receivable		-			-			-			300,969,097			-			-		-		(300,969,097	)		-
8	Inventory, net		-			1,833,694			-			(102,323	)		-			-		-		(1,968,453	)		(237,082	)
9	Prepaid expenses and other assets		6,369,262			36,427			119,729			30,247			36,587			50,510		-		(108,000	)		6,534,762
10	Deferred tax asset, current		-			-			-			-			-			-		-		-			-
11	Total Current Assets		397,723,220			(4,887,507	)		(8,162,116	)		(50,072,218	)		81,119,756			2,447,073				(345,475,233	)		72,692,975
12	Fixed assets, net		6,640			(1,360	)		470,080			1,684,141			-			0		-		-			2,159,501
13	Operating lease right-of-use assets		-			-			843,821			7,386,875			-			-		-		-			8,230,696
14	Long-term investments		518,219			-			-			-			-			-		-		-			518,219
15	Intangible asset		-			-			-			-			-			-		-		-			-
16	Goodwill		-			-			-			-			-			-		-		-			-
17	Investment in subsidiary		27,693,643			-			-			-			-			-		-		(27,693,643	)		-
18	Deferred tax asset, non-current		-			-			-			-			1			-		-		-			1
19	Other assets		3,139,293			317,648			42,000			380,000			148,000			-		-		-			4,026,942
20	Total Assets	$	429,081,016		$	(4,571,219	)	$	(6,806,215	)	$	(40,621,202	)	$	81,267,756		$	2,447,073	$	-	$	(373,168,876	)	$	87,628,333
21	Liabilities And Stockholders' Equity (Deficit)
22	Current Liabilities
23	Accounts payable and accrued expenses	$	33,122,558		$	5,562,932		$	3,675,509		$	1,394,114		$	51,598,515		$	8,048	$	-	$	-		$	95,361,676
24	Intercompany accounts payable		-			5,685,434			-			-			295,283,663			-		-		(300,969,097	)		-
25	Accrued compensation		816,523			514,923			782,925			553,798			94,867			2,966		-		-			2,766,003
26	Accrued sales allowances		-			3,628,972			-			-			1,121,465			10,913		-		-			4,761,349
27	Current portion of operating lease liabilities		-			-			589,300			297,580			-			-		-		-			886,880
28	Accrued litigation awards and settlements		76,237,884			-			-			-			62,635,173			-		-		-			138,873,057
29	Deferred revenue		-			-			-			-			-			-		-		-			-
30	Bank line of credit		-			-			-			-			-			-		-		-			-
31	Notes payable to related party,including ' interest		-			-			-			-			-			-		-		-			-
32	Total Current Liabilities		110,176,966			15,392,260			5,047,735			2,245,493			410,733,682			21,927		-		(300,969,097	)		242,648,965
33	Contingent payment obligation		177,653,955			-			-			-			-			-		-		-			177,653,955
34	Operating lease liability		-			-			436,322			9,562,601			-			-		-		-			9,998,923
35	Uncertain income tax position		3,861,119			-			-			-			-			-		-		-			3,861,119
36	Other non-current liabilities		-			-			-			-			-			-		-		-			94,319
37	Notes payable to related party, including interest,long term		-			-			-			-			-			-		-		-

Page 8 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

#	Category	Insys Therapeutics, Inc.			IC Operations, LLC			Insys Development Company, Inc.			Insys Manufacturing, LLC			Insys Pharma, Inc.			IPSC, LLC			IPT 355, LLC		Eliminations			Consolidated
		Case No.			Case No.			Case No.			Case No.			Case No.			Case No.			Case No.					10/31/19
		19-11292			19-11293			19-11294			19-11295			19-11296			19-11297			19-11298
38	Total Liabilities		291,692,040			15,392,260			5,484,056			11,902,413			410,733,682			21,927			-		(300,969,097	)		434,257,281
39	Commitments and contingencies		-			-			-			-			-			-			-		-			-
40	Stockholders' Equity (Deficit)
41	Convertible preferred stock		-			-			-			-			-			-			-		-			-
42	Common stock		746,389			-			-			-			145,989			-			-		(145,677	)		746,702
43	Additional paid in capital		575,021,594			-			-			-			59,117,800			-			-		(335,217,966	)		298,921,428
44	Unrealized gain/loss on investments		(76,998	)		-			-			-			-			-			-		-			(76,998	)
45	Unrealized gain/loss on foreign exchange		-			-			-			-			-			-			-		-			-
46	Notes receivable from stockholders		-			-			-			-			-			-			-		-			-
47	Retained earnings		(302,745,683	)		-			35,795,428			(2,408,524	)		(298,163,466	)		2,549,010			-		228,890,242			(336,082,993	)
48	Current period retained earnings (accumulated deficit)		(135,556,327	)		(19,963,479	)		(48,085,700	)		(50,115,090	)		(90,566,249	)		(123,864	)		-		34,273,622			(310,137,086	)
49	Total Stockholders' Equity (Deficit)		137,388,976			(19,963,479	)		(12,290,272	)		(52,523,615	)		(329,465,926	)		2,425,146			-		(72,199,779	)		(346,628,948	)
50	Total Liabilities And Stockholders' Equity (Deficit)	$	429,081,016		$	(4,571,219	)	$	(6,806,215	)	$	(40,621,202	)	$	81,267,756		$	2,447,073		$	-	$	(373,168,876	)	$	87,628,333

Page 9 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

Debtor Attestation with Respect to Postpetition Taxes

Reporting Period: October 1, 2019 – October 31, 2019

Andrece Housley hereby declares under penalty of perjury:

I am Chief Financial Officer of Insys Therapeutics, Inc., et al., the above captioned 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.

/s/ Andrece Housley	12/19/19
Andrece Housley	Date
Chief Financial Officer of Insys Therapeutics, Inc.; et al.

Page 10 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-4

Summary of Unpaid Postpetition Debts

Reporting Period: October 1, 2019 – October 31, 2019

($’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)	$	3,295,400	$	4,307,307	$	2,308,005	$	1,718,412	$	1,051,719	$	12,680,842

Footnotes:

(1) The postpetition accounts payable represents open and outstanding trade vendor invoices that have been entered into the Debtors’ accounts payable system and do not include accruals.  This summary does not include intracompany and intercompany payables.

(2) Trade Payables per balance sheet include accruals and non-cash entries not due and payable per accounts payable aging.

Page 11 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-5

Accounts Receivable Reconciliation and Aging

Reporting Period: October 1, 2019 – October 31, 2019

($’s in USD)

#	Accounts Receivable Reconciliation	Beginning Accounts Receivable		Change in Accounts Receivable			Ending Accounts Receivable
1	IC Operations, LLC(1)	$	8,428,099	$	(1,438,460	)	$	6,989,639
2	Insys Therapeutics, Inc.(1)		622,299		2,909,822			3,532,121
3	Total Accounts Receivable	$	9,050,398	$	1,471,362		$	10,521,760
				Days Past Due
#	Accounts Receivable Aging	Current		0 - 30 Days			31 - 60 Days		61 - 90 Days			> 91 Days	Total
1	IC Operations, LLC(2)(3)	$	2,612,554	$	2,367,495		$	426,066	$	484,923	$	1,098,602	$	6,989,639
2	Insys Therapeutics, Inc.(2)(3)		2,909,822		622,299		-		-			-		3,532,121
3	Total Accounts Receivable	$	5,522,376	$	2,989,794		$	426,066	$	484,923	$	1,098,602	$	10,521,760

Footnotes:

(1) Amounts are shown on a gross basis before any adjustment for estimated bad debts and other uncollectable amounts.  This summary does not include any accrued fees, discounts or intracompany and intercompany receivables.

(2) Amounts are aged from the due date and are included on a gross basis before any adjustment for estimated bad debts and other uncollectable amounts.  This summary does not include any accrued fees, discounts or intracompany and intercompany receivables.

Page 12 of 13

In re:	Case No. 19-11292 (KG)
Insys Therapeutics, Inc.; et al.	Reporting Period: October 1
– October 31, 2019
Debtors

MOR-6

Debtor Questionnaire

Reporting Period: October 1, 2019 – October 31, 2019

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(1)
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

Footnotes:

1. In October, certain Syndros and CBD related assets were sold pursuant to the Order approving the Asset Purchase Agreement between the Debtor and Chilion Group Holdings US, Inc.

Page 13 of 13