Delaware
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1-9601 | 43-0618919 |
(State or other jurisdiction
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(Commission | (I.R.S. Employer |
of incorporation)
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File Number) | Identification No.) |
2280 Schuetz Road
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St. Louis, MO
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63146 | |
(Address of principal executive offices)
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(Zip Code) |
Item 7.01
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Regulation FD Disclosure.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit Number
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Description |
99.1
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Monthly Operating Report for the
Period From August 4, 2012 To
August 31, 2012
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K-V PHARMACEUTICAL COMPANY
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By:
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/s/ Patrick J. Christmas
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Patrick J. Christmas
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Vice President, General Counsel and
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Secretary
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United States Bankruptcy Court
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Southern District of New York
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X
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In re:
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:
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Chapter 11
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:
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K-V Discovery Solutions, Inc. et al.:
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:
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Case No. 12-13346 (ALG)
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:
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Debtors.
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X
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Jointly Administered
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Debtors' Address:
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2280 Schuetz Road
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St. Louis, Missouri 63146
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Telephone: (314) 645-6000
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Debtors' Attorneys:
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Willkie Farr & Gallagher LLP
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787 Seventh Avenue
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New York, New York 10019
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Telephone: (212) 728-8000
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/s/ Thomas S. McHugh
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September 21, 2012
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Thomas S. McHugh
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Chief Financial Officer
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K-V Pharmaceutical Company
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In re
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K-V DISCOVERY SOLUTIONS, INC., et al.
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Case No.
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12-13346
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Debtors.
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Reporting Period:
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8/4/12 - 8/31/12 1
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Federal Tax I.D.#
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13-1587982
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CORPORATE MONTHLY OPERATING REPORT
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File with the Court and submit a copy to the United States Trustee within 20 days after the end of the month and submit a copy of the report to any official committee appointed in the case.
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(Reports for Rochester and Buffalo Divisions of Western District of New York are due 15 days after the end of the month, as are the reports for Southern District of New York.)
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REQUIRED DOCUMENTS
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Form No.
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Document Attached
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Explanation Attached
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Schedule of Cash Receipts and Disbursements
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MOR-1
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x
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Bank Reconciliation (or copies of debtor's bank reconciliations)
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MOR-1 (CON'T)
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x
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Copies of bank statements
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x
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Cash disbursements journals
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x
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Statement of Operations
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MOR-2
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x
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Balance Sheet
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MOR-3
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x
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Status of Post-petition Taxes
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MOR-4
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x
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x
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Copies of IRS Form 6123 or payment receipt (See Notes to MOR 4)
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x
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Copies of tax returns filed during reporting period (See Notes to MOR 4)
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x
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Summary of Unpaid Post-petition Debts (See Notes to MOR 4)
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MOR-4
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x
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Listing of Aged Accounts Payable (See MOR 7)
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x
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Accounts Receivable Reconciliation and Aging
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MOR-5
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x
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Taxes Reconciliation and Aging (See MOR 7)
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MOR-5
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x
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Payments to Insiders and Professional
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MOR-6
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x
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Post Petition Status of Secured Notes, Leases Payable
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MOR-6
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x
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Debtor Questionnaire
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MOR-7
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x
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Makena® Performance Metrics
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x
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1
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Each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the U.S. Bankruptcy Code on August 4, 2012. Unless otherwise noted herein, all information presented in this MOR is for the post-petition period of August 4, 2012 through August 31, 2012.
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Debtor
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Case Number
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K-V Discovery Solutions, Inc.
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12-13346
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K-V Pharmaceutical Company
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12-13347
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Ther-Rx Corporation
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12-13348
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K-V Generic Pharmaceuticals, Inc.
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12-13349
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Zeratech Technologies USA, Inc.
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12-13350
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DrugTech Corporation
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12-13351
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K-V Solutions USA, Inc.
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12-13352
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FP1096, Inc.
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12-13353
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Debtor
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Case Number
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Cash Receipts
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||||||
K-V Discovery Solutions, Inc
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12-13346 | 0 | ||||||
K-V Pharmaceutical Company
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12-13347 | $ | 469 | |||||
Ther-Rx Corporation
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12-13348 | 4,715 | ||||||
K-V Generic Pharmaceuticals, Inc
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12-13349 | 0 | ||||||
Zeratech Technologies USA, Inc
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12-13350 | 0 | ||||||
DrugTech Corporation
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12-13351 | 0 | ||||||
K-V Solutions USA Inc
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12-13352 | 0 | ||||||
FP1096, Inc
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12-13353 | 0 | ||||||
Total Cash Receipts
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$ | 5,184 |
Debtor
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Case Number
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Cash 2 Disbursements
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||||||
K-V Discovery Solutions, Inc
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12-13346 | 0 | ||||||
K-V Pharmaceutical Company
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12-13347 | $ | (6,649 | ) | ||||
Ther-Rx Corporation
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12-13348 | 0 | ||||||
K-V Generic Pharmaceuticals, Inc
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12-13349 | 0 | ||||||
Zeratech Technologies USA, Inc
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12-13350 | 0 | ||||||
DrugTech Corporation
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12-13351 | 0 | ||||||
K-V Solutions USA Inc
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12-13352 | 0 | ||||||
FP1096, Inc
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12-13353 | 0 | ||||||
Total Cash Disbursements
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$ | (6,649 | ) |
1 –
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Cash is received and disbursed by the Debtors as described in the Debtors’ motion to approve continued use of their cash management system (which motion was granted on an interim basis pursuant to an order entered by the Bankruptcy Court on August 7, 2012) and is consistent with the Debtors’ historical cash management practices. All amounts listed are the balances reported by the bank as of the end of the reporting period. Copies of bank statements will be provided upon reasonable request in writing to counsel for the Debtors.
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2 –
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Cash disbursements include $643 of outstanding checks.
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Debtor
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Case Number
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Bank and Account Description
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Bank Account No. Ending In
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Bank Balance
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|||||||||
K-V Pharmaceutical Company
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12-13347 |
Fifth Third Money Market / Investment Account
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1225 | $ | 21,686 | ||||||||
K-V Pharmaceutical Company
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12-13347 |
Fifth Third / Nesher Escrow Account
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0383 | 7,512 | |||||||||
K-V Pharmaceutical Company
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12-13347 |
Fifth Third Bank / Operating Account
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9158 | 7,068 | |||||||||
K-V Pharmaceutical Company
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12-13347 |
Fifth Third / PDI Escrow Account
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18766 | 1,819 | |||||||||
K-V Pharmaceutical Company
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12-13347 |
Bank of America / Payroll Account
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6170 | 961 | |||||||||
K-V Pharmaceutical Company
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12-13347 |
Commerce Bank / Deposit Account
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2433 | 150 | |||||||||
K-V Pharmaceutical Company
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12-13347 |
AMEX Centurion Bank / Certificate of Deposit
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8420 | 75 | |||||||||
K-V Pharmaceutical Company
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12-13347 |
Fifth Third Bank
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04795 | 2 | |||||||||
DrugTech Corporation
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12-13351 |
US Bank / DrugTech Custody Account
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3256 | 4 | |||||||||
DrugTech Corporation
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12-13351 |
Wells Fargo Bank/ DrugTech Operating Acct
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6823 | 1 | |||||||||
$ | 39,278 |
1 –
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The Debtors have not included copies of their bank statements or cash disbursement journals due to the voluminous nature of these reports. Copies of the Debtors’ bank statements and cash disbursement journals will be provided upon reasonable request in writing to counsel for the Debtors.
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5 –
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The Debtors opened this bank account post-petition on August 28, 2012 in connection with a request for adequate protection by one of the Debtors’ utility service providers.
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6 –
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This account was inadvertently identified in the Debtors’ motion to approve continued use of their cash management system as ending in 4187.
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For the Month Ended August 31, 2012 1
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Net revenues
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$ | 4,190 | ||
Cost of sales
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260 | |||
Gross profit
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3,930 | |||
Research and development
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877 | |||
Selling and administrative
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7,140 | |||
Operating expenses
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8,017 | |||
Operating loss
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(4,087 | ) | ||
Interest, net and other
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219 | |||
Reorganization items, net
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2,217 | |||
Total other expense, net
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2,436 | |||
Loss from continuing operations before income taxes
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(6,523 | ) | ||
Income tax provision
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986 | |||
Net loss from continuing operations
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$ | (7,509 | ) |
1 -
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The Debtors prepare their income statement on an accrual basis. Attempting to pro-rate accruals for the three-day prepetition period (August 1, 2012 through August 3, 2012) would be burdensome and time-consuming, and such efforts would produce potentially inaccurate or misleading financial information. Accordingly, the Debtors’ income statement, as set forth in this MOR, reflects the results of the Debtors’ operations for the entire month of August.
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As of
August 31,
2012 |
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ASSETS
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Current Assets:
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Cash and cash equivalents
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$ | 29,079 | ||
Restricted cash
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9,556 | |||
Receivables, net
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7,572 | |||
Inventories, net
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4,340 | |||
Other current assets
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4,334 | |||
Income taxes receivable
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460 | |||
Total Current Assets
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55,341 | |||
Property and equipment, less accumulated depreciation
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1,989 | |||
Intangible assets, net
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122,996 | |||
Other assets
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16,324 | |||
Total Assets
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$ | 196,650 | ||
LIABILITIES
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LIABILITIES NOT SUBJECT TO COMPROMISE:
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Current Liabilities:
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Accounts payable
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$ | 1,168 | ||
Accrued expenses
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17,465 | |||
Other current liabilities
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9,330 | |||
Total Current liabilities
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27,963 | |||
Total Liabilities not subject to compromise
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27,963 | |||
Total liabilities subject to compromise
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670,392 | |||
Total Liabilities
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698,355 | |||
SHAREHOLDERS' DEFICIT
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Preferred Stock
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0 | |||
Class A Common Stock
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643 | |||
Class B Common Stock
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112 | |||
Additional paid-in capital
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205,653 | |||
Accumulated deficit
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(650,704 | ) | ||
Less: Treasury stock
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(57,409 | ) | ||
Total Shareholders' Deficit
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(501,404 | ) | ||
Total Liabilities and Shareholders' Deficit
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$ | 196,650 |
Federal
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Beginning Tax
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Amount Withheld and/or Accrued
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Amount Paid
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Ending Tax
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Withholding
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$ | 0 | $ | 453 | $ | (453 | ) | $ | 0 | |||||||
FICA-Employee
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0 | 121 | (121 | ) | 0 | |||||||||||
FICA-Employer
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0 | 161 | (161 | ) | 0 | |||||||||||
Total Federal Taxes
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$ | 0 | $ | 735 | $ | (735 | ) | $ | 0 | |||||||
State and Local
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Withholding
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$ | 0 | $ | 111 | $ | (111 | ) | $ | 0 | |||||||
Sales Tax
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9 | 0 | 0 | 9 | ||||||||||||
Unemployment
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0 | 0 | 0 | 0 | ||||||||||||
Real Property
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3 | 1 | 0 | 4 | ||||||||||||
Personal Property
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52 | 0 | 0 | 52 | ||||||||||||
Franchise Tax
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(20 | ) | 20 | (36 | ) | (36 | ) | |||||||||
Total State and Local
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$ | 44 | $ | 132 | $ | (147 | ) | $ | 29 | |||||||
Total Taxes
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$ | 44 | $ | 867 | $ | (882 | ) | $ | 29 |
1 -
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The Debtors have not annexed copies of tax returns filed with various taxing authorities during the current reporting period to this MOR, nor have they included the Debtors’ IRS Form 6123 with this MOR. Copies of such tax returns and IRS Form 6123 will be provided upon reasonable request in writing to counsel for the Debtors.
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2 -
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The Debtors believe they are paying all undisputed taxes and preparing and filing all tax returns when due or obtaining extensions where necessary.
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Description
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Amount
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0 - 30 days old
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$ | 1,168 | ||
31+ days old
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0 | |||
Total Vendor Accounts Payable Post-petition
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$ | 1,168 |
1 -
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The Debtors believe they are paying all undisputed post-petition obligations according to terms. Aged amounts represent certain items which have been paid subsequent to the end of the reporting period.
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Description
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Amount
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0 - 30 days old
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$ | 8,058 | ||
31 - 60 days old
|
270 | |||
61 - 90 days old
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48 | |||
90+ days old
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888 | |||
Total Customer Accounts Receivable
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$ | 9,264 | ||
Customer Allowances
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(1,692 | ) | ||
Total Accounts Receivable
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$ | 7,572 |
INSIDERS
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Name
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Category
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Amount
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Christmas, Patrick
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Salary
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$ | 17 | ||
Christmas, Patrick
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Travel
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2 | |||
Divis, Gregory
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Salary
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27 | |||
McHugh, Thomas
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Salary
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18 | |||
McHugh, Thomas
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Travel
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2 | |||
Total Insiders
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$ | 66 |
PROFESSIONALS
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Name
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Amount
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Houlihan Lokey Capital, Inc
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$ | 273 | ||
Total Professionals
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$ | 273 |
Name of Creditor
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Scheduled Monthly
Payment Due
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Amount Paid
During Month
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Building lease payable
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$ | 38 | $ | 38 | ||||
Utility deposit
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N/A | 2 | ||||||
Total Payments
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$ | 40 |
1 -
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The Debtors’ schedule of lease payments, as set forth in the MOR, only reflects payments made pursuant to the Debtors’ real property lease. Immaterial leases of personal property are not reflected in the financial statements that comprise part of this MOR.
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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.
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Yes
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No
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1
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Have any assets been sold or transferred outside the normal course of business this reporting period?
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X
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2
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Have any funds been disbursed from any account other than a debtor in possession account this reporting period?
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X
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3
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Is the Debtor delinquent in the timely filing of any post-petition tax returns?
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X
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4
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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?
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X
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5
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Is the Debtor delinquent in paying any insurance premium payment?
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X
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6
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Have any payments been made on pre-petition liabilities this reporting period?
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X
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7
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Are any post-petition receivables (accounts, notes or loans) due from related parties?
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X
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8
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Are any post-petition payroll taxes past due?
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X
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9
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Are any post-petition State or Federal income taxes past due?
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X
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10
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Are any post-petition real estate taxes past due?
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X
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11
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Are any other post-petition taxes past due?
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X
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12
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Have any pre-petition taxes been paid during this reporting period?
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X
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13
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Are any amounts owed to post-petition creditors delinquent?
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X
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14
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Are any wages payments past due?
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X
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15
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Have any post-petition loans been received by the Debtor from any party?
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X
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16
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Is the Debtor delinquent in paying any US Trustee fees?
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X
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17
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Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?
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X
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18
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Have the owners or shareholders received any compensation outside of the normal course of business?
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X
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Explanations
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6
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Pursuant to various orders entered by the Bankruptcy Court, the Debtors were authorized to pay certain pre-petition employee salary and benefit obligations, as well as certain pre-petition vendor, warehousemen and common carrier obligations. The Bankruptcy Court also approved the Debtors’ motion to honor certain prepetition obligations to their customers.
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12
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Pursuant to an order entered by the Bankruptcy Court, the Debtors were authorized to pay certain pre-petition taxes and other fees.
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13
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The Debtors believe that all undisputed post-petition accounts payable have been and are being paid according to agreed-upon terms specific to each vendor and/or service provider. Any aged amounts represent items subject to valid disputes and certain items which have been paid subsequent to the end of this reporting period.
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Three Months Ended
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Gross Revenues ($ in thousands) (1)
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Total Prescriptions (2)
|
Vials Shipped to Customers (3)
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|||||||||
9/30/2011
|
$ | 1,318 | 1,255 | 382 | ||||||||
12/31/2011
|
$ | 1,670 | 1,687 | 484 | ||||||||
3/31/2012
|
$ | 6,396 | 2,240 | 1,854 | ||||||||
6/30/2012
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$ | 13,393 | 2,577 | 3,882 | ||||||||
$ | 13,938 | 2,939 | 4,041 |
(1) Amounts shown are estimated based on the number of vials shipped and list price/vial.
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(2) Represents total prescriptions reported to the Debtors and does not include cancellations.
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(3) Represents paid vials shipped to the Debtors' customers, which include specialty pharmacies and distributors.
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(4) Data for the months of June, July, and August 2012 is used in the absence of complete data for three months ending September 30, 2012.
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