Delaware | 1-9601 | 43-0618919 |
(State or other jurisdiction | (Commission | (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
2280 Schuetz Road
|
|
St. Louis, MO | 63146 |
(Address of principal executive offices) | (Zip Code) |
Item 7.01
|
Regulation FD Disclosure.
|
K-V PHARMACEUTICAL COMPANY
|
|||
|
By:
|
/s/ Patrick J. Christmas | |
Patrick J. Christmas | |||
Vice President, General Counsel and | |||
Secretary |
United States Bankruptcy Court
|
||
Southern District of New York
|
||
X
|
||
In re:
|
:
|
Chapter 11
|
:
|
||
K-V Discovery Solutions, Inc. et al.:
|
:
|
Case No. 12-13346 (ALG)
|
:
|
||
Debtors.
|
X
|
Jointly Administered
|
Debtors' Address:
|
2280 Schuetz Road
|
St. Louis, Missouri 63146
|
|
Telephone: (314) 645-6600
|
|
Debtors' Attorneys:
|
Willkie Farr & Gallagher LLP
|
787 Seventh Avenue
|
|
New York, New York 10019
|
|
Telephone: (212) 728-8000
|
/s/ Thomas S. McHugh
|
November 15, 2012
|
|
Thomas S. McHugh
|
||
Chief Financial Officer
|
||
K-V Pharmaceutical Company
|
In re
|
K-V DISCOVERY SOLUTIONS, INC., et al.
|
Case No.
|
12-13346
|
|
Debtors.
|
Reporting Period:
|
10/1/12 -10/31/12
|
||
Federal Tax I.D.#
|
13-1587982
|
CORPORATE MONTHLY OPERATING REPORT
|
|||
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.
|
|||
(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.)
|
REQUIRED DOCUMENTS
|
Form No.
|
Document Attached
|
Explanation Attached
|
Schedule of Cash Receipts and Disbursements
|
MOR-1
|
x
|
|
Bank Reconciliation (or copies of debtor's bank reconciliations)
|
MOR-1
|
x
|
|
Copies of bank statements
|
x
|
||
Cash disbursements journals
|
x
|
||
Statement of Operations
|
MOR-2
|
x
|
|
Balance Sheet
|
MOR-3
|
x
|
|
Status of Post-petition Taxes
|
MOR-4
|
x
|
x
|
Copies of IRS Form 6123 or payment receipt (See Notes to MOR 4)
|
x
|
||
Copies of tax returns filed during reporting period (See Notes to MOR 4)
|
x
|
||
Summary of Unpaid Post-petition Debts (See Notes to MOR 4)
|
MOR-4
|
x
|
|
Listing of Aged Accounts Payable (See MOR 7)
|
x
|
||
Accounts Receivable Reconciliation and Aging
|
MOR-5
|
x
|
|
Taxes Reconciliation and Aging (See MOR 7)
|
MOR-5
|
x
|
|
Payments to Insiders and Professionals
|
MOR-6
|
x
|
|
Post Petition Status of Secured Notes, Leases Payable
|
MOR-6
|
x
|
|
Debtor Questionnaire
|
MOR-7
|
x
|
|
Makena® Performance Metrics
|
x
|
Debtor
|
Case Number
|
K-V Discovery Solutions, Inc.
|
12-13346
|
K-V Pharmaceutical Company
|
12-13347
|
Ther-Rx Corporation
|
12-13348
|
K-V Generic Pharmaceuticals, Inc.
|
12-13349
|
Zeratech Technologies USA, Inc.
|
12-13350
|
Drug Tech Corporation
|
12-13351
|
K-V Solutions USA, Inc.
|
12-13352
|
FP1096, Inc.
|
12-13353
|
Debtor
|
Case Number
|
Cash Receipts
|
|||||
Ther-Rx Corporation
|
12-13348 | $ | 7,226 | ||||
K-V Pharmaceutical Company
|
12-13347 | 87 | |||||
DrugTech Corporation
|
12-13351 | 0 | |||||
K-V Discovery Solutions, Inc.
|
12-13346 | 0 | |||||
K-V Generic Pharmaceuticals, Inc.
|
12-13349 | 0 | |||||
Zeratech Technologies USA, Inc.
|
12-13350 | 0 | |||||
K-V Solutions USA Inc.
|
12-13352 | 0 | |||||
FP1096, Inc.
|
12-13353 | 0 | |||||
Total Cash Receipts
|
$ | 7,313 | |||||
Debtor
|
Case Number
|
Cash 2
Disbursements
|
|||||
K-V Pharmaceutical Company
|
12-13347 | $ | (6,191 | ) | |||
Ther-Rx Corporation
|
12-13348 | (2,334 | ) | ||||
DrugTech Corporation
|
12-13351 | (8 | ) | ||||
K-V Discovery Solutions, Inc.
|
12-13346 | 0 | |||||
K-V Generic Pharmaceuticals, Inc.
|
12-13349 | 0 | |||||
Zeratech Technologies USA, Inc.
|
12-13350 | 0 | |||||
K-V Solutions USA Inc.
|
12-13352 | 0 | |||||
FP1096, Inc.
|
12-13353 | 0 | |||||
Total Cash Disbursements
|
$ | (8,533 | ) |
1 –
|
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 on a second interim basis pursuant to an order entered by the Bankruptcy Court on September 28, 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.
|
2 –
|
Cash disbursements during the month of October 2012 include $467 of outstanding checks.
|
Debtor
|
Case Number
|
Bank and Account Description
|
Bank Account No. Ending In
|
Bank Balance
|
||||||
K-V Pharmaceutical Company
|
12-13347 |
Fifth Third Money Market / Investment Account
|
1225 | $ | 21,687 | |||||
K-V Pharmaceutical Company
|
12-13347 |
Fifth Third Bank / Nesher Escrow Account
|
0383 | 7,513 | ||||||
K-V Pharmaceutical Company
|
12-13347 |
Fifth Third Bank / Operating Account
|
9158 | 7,224 | ||||||
K-V Pharmaceutical Company
|
12-13347 |
Fifth Third Bank / PDI Escrow Account
|
1876 | 5 | 1,819 | |||||
K-V Pharmaceutical Company
|
12-13347 |
Commerce Bank / Deposit Account
|
2433 | 150 | ||||||
K-V Pharmaceutical Company
|
12-13347 |
AMEX Centurion Bank / Certificate of Deposit
|
8420 | 75 | ||||||
K-V Pharmaceutical Company
|
12-13347 |
Fifth Third Bank / Utility Deposit
|
0479 | 7 | 2 | |||||
Drug Tech Corporation
|
12-13351 |
US Bank / DrugTech Custody Account
|
3256 | 4 | ||||||
Drug Tech Corporation
|
12-13351 |
Wells Fargo Bank/ DrugTech Operating Acct
|
6823 | 1 | ||||||
$ | 38,475 |
1 –
|
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.
|
2 –
|
The Debtors reconcile their bank accounts on a monthly basis. |
3 –
|
The Debtors have excluded accounts with no balance as of the end of the reporting period. |
4 –
|
The Debtors’ bank balances exclude $503 of outstanding checks. |
5 –
|
This account was inadvertently identified in the Debtors’ motion to approve continued use of their cash management system as ending in 4187.
|
6 –
|
During this reporting period, the Debtors closed a bank account in the name of K-V Pharmaceutical Company with Bank of America (“Payroll Account”, bank account no. ending in 6170).
|
7 –
|
The Debtors opened this bank account post-petition on August 28, 2012 in accordance with the order of the Bankruptcy Court, entered on August 23, 2012, that, among other things, established procedures for providing deposits to the Debtors’ utility service providers that request adequate assurance of payment and deemed such utility service providers to have adequate assurance of payment.
|
For the
Month Ended
October 31, 20121
|
||||
Net revenues
|
$ | 7,730 | ||
Cost of sales
|
139 | |||
Gross profit
|
7,591 | |||
Research and development
|
382 | |||
Selling and administrative
|
6,585 | |||
Operating expenses
|
6,967 | |||
Operating income
|
624 | |||
Interest, net and other
|
0 | |||
Reorganization items, net
|
1,507 | |||
Total other expense, net
|
1,507 | |||
Loss from continuing operations before income taxes
|
(883 | ) | ||
Income tax provision
|
1,008 | |||
Net loss from continuing operations
|
$ | (1,891 | ) |
1 –
|
The Debtors prepare their income statement on an accrual basis. Accordingly, the Debtors’ Statement of Operations, as set forth in this MOR, reflects the results of the Debtors’ operations for the month of October 2012.
|
As of
October 31,
|
||||
2012
|
||||
ASSETS
|
||||
Current Assets:
|
||||
Cash and cash equivalents
|
$ | 28,414 | ||
Restricted cash
|
9,408 | |||
Receivables, net
|
10,542 | |||
Inventories, net
|
5,446 | |||
Other current assets
|
4,311 | |||
Income taxes receivable
|
421 | |||
Total Current Assets
|
58,542 | |||
Property and equipment, less accumulated depreciation
|
1,867 | |||
Intangible assets, net
|
119,641 | |||
Other assets
|
15,531 | |||
Total Assets
|
$ | 195,581 | ||
LIABILITIES
|
||||
LIABILITIES NOT SUBJECT TO COMPROMISE:
|
||||
Current Liabilities:
|
||||
Accounts payable
|
$ | 2,068 | ||
Accrued expenses
|
22,941 | |||
Other current liabilities
|
9,331 | |||
Total Current liabilities
|
34,340 | |||
Total Liabilities not subject to compromise
|
34,340 | |||
Total liabilities subject to compromise
|
672,106 | |||
Total Liabilities
|
706,446 | |||
SHAREHOLDERS' DEFICIT
|
||||
Preferred Stock
|
0 | |||
Class A Common Stock
|
643 | |||
Class B Common Stock
|
112 | |||
Additional paid-in capital
|
205,802 | |||
Accumulated deficit
|
(660,013 | ) | ||
Less: Treasury stock
|
(57,409 | ) | ||
Total Shareholders' Deficit
|
(510,865 | ) | ||
Total Liabilities and Shareholders' Deficit
|
$ | 195,581 |
Federal
|
Beginning Tax
|
Amount Withheld and/or Accrued
|
Amount Paid
|
Ending Tax
|
||||||||||||
Withholding
|
$ | 0 | $ | 268 | $ | (268 | ) | $ | 0 | |||||||
FICA-Employee
|
0 | 59 | (59 | ) | 0 | |||||||||||
FICA-Employer
|
0 | 77 | (77 | ) | 0 | |||||||||||
Total Federal Taxes
|
$ | 0 | $ | 404 | $ | (404 | ) | $ | 0 | |||||||
State and Local
|
||||||||||||||||
Withholding
|
$ | 0 | $ | 68 | $ | (68 | ) | $ | 0 | |||||||
Sales Tax
|
9 | 1 | 0 | 10 | ||||||||||||
Real Property
|
5 | 1 | 0 | 6 | ||||||||||||
Personal Property
|
52 | 0 | 0 | 52 | ||||||||||||
Franchise Tax
|
(17 | ) | 20 | (37 | ) | (34 | ) | |||||||||
Total State and Local
|
$ | 49 | $ | 90 | $ | (105 | ) | $ | 34 | |||||||
Total Taxes
|
$ | 49 | $ | 494 | $ | (509 | ) | $ | 34 |
1 –
|
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.
|
2 –
|
The Debtors believe they are paying all undisputed taxes and preparing and filing all tax returns when due or obtaining extensions where necessary.
|
Description
|
Amount
|
|||
0 - 30 days old
|
$ | 2,053 | ||
31+ days old
|
15 | |||
Total Vendor Accounts Payable Post-petition
|
$ | 2,068 |
1 –
|
The Debtors believe they are paying all undisputed post-petition obligations according to terms.
|
Description
|
Amount
|
|||
0 - 30 days old
|
$ | 10,892 | ||
31 - 60 days old
|
5 | |||
61 - 90 days old
|
1 | |||
90+ days old
|
913 | |||
Total Customer Accounts Receivable
|
$ | 11,811 | ||
Customer Allowances
|
(1,269 | ) | ||
Total Accounts Receivable
|
$ | 10,542 |
INSIDERS
|
Name
|
Type of Payment 1
|
Current Month Amount Paid
|
Total Paid Since
August 4, 2012
|
||||||
Christmas, Patrick
|
Salary/Expenses
|
$ | 21 | $ | 62 | ||||
Divis, Gregory
|
Salary/Expenses
|
31 | 89 | ||||||
McHugh, Thomas
|
Salary/Expenses
|
24 | 69 | ||||||
Stancic, Ana
|
Director Fees
|
29 | 29 | ||||||
Hermelin, David
|
Director Fees
|
31 | 31 | ||||||
Sidransky, David MD
|
Director Fees
|
30 | 30 | ||||||
Bentley, Gregory
|
Director Fees
|
29 | 29 | ||||||
Lehrer, Joseph
|
Director Fees
|
41 | 41 | ||||||
Dow, Mark
|
Director Fees
|
34 | 34 | ||||||
Baldini, Robert
|
Director Fees
|
30 | 30 | ||||||
Total
|
$ | 300 | $ | 444 |
1 –
|
Additional detail concerning payments to the Debtors’ insiders will be provided upon reasonable request in writing to counsel for the Debtors.
|
PROFESSIONALS 1
|
Name
|
Date of Court Order Authorizing Payment
|
Amount Requested 2
|
Current Month Amount Paid
|
Total Paid To Date 3
|
Total Incurred & Unpaid
|
||||||||||||
Alston & Bird, LLP
|
September 14, 2012
|
$ | 99 | $ | 61 | $ | 61 | $ | 38 | ||||||||
Arnall Golden Gregory, LLP
|
October 10, 2012
|
- | - | - | - | ||||||||||||
Duff & Phelps, LLC
|
October 10, 2012
|
205 | - | - | 205 | ||||||||||||
Epiq Bankruptcy Solutions
|
September 27, 2012
|
155 | 65 | 65 | 90 | ||||||||||||
Fortgang Consulting
|
September 14, 2012
|
- | - | - | - | ||||||||||||
Houlihan & Lokey Capital, Inc.
|
September 14, 2012
|
155 | - | 472 | 155 | ||||||||||||
Jefferies & Company, Inc.
|
October 10, 2012
|
- | - | - | - | ||||||||||||
Stroock, Stroock & Lavan, LLP
|
October 10, 2012
|
- | - | - | - | ||||||||||||
Weil, Gotshal & Manges, LLP
|
September 27, 2012
|
381 | 381 | 381 | - | ||||||||||||
Willkie, Farr & Gallagher, LLP
|
September 27, 2012
|
1,455 | 531 | 531 | 924 | ||||||||||||
Total
|
$ | 2,450 | $ | 1,039 | $ | 1,510 | $ | 1,412 |
1 –
|
Represents professional services exclusive of those rendered by professionals retained by the Debtors pursuant to the September 27, 2012 order of the Bankruptcy Court authorizing the Debtors to employ and retain professionals utilized in the ordinary course of business professional service providers.
|
2 –
|
Represents amounts requested during the current reporting period.
|
3 –
|
Represents payments made from the date of the Bankruptcy Court’s order authorizing each firm’s retention.
|
Name of Creditor
|
Scheduled Monthly
Payment Due
|
Amount Paid
During Month
|
||||||
Building lease payable
|
$ | 42 | $ | 42 | ||||
Total Payments
|
$ | 42 |
1 –
|
The Debtors’ schedule of lease payments, as set forth in this MOR, only reflects payments made pursuant to the Debtors’ real property lease. Immaterial leases of personal property are not included in this MOR-6.
|
Must be completed each month. If the answer to any of the questions is "Yes", provide a detailed explanation of each item. Attach additional sheets if necessary.
|
Yes
|
No
|
||
1
|
Have any assets been sold or transferred outside the normal course of business this reporting period?
|
X
|
||
2
|
Have any funds been disbursed from any account other than a debtor in possession account this reporting period?
|
X
|
||
3
|
Is the Debtor delinquent in the timely filing of any post-petition tax returns?
|
X
|
||
4
|
Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?
|
X
|
||
5
|
Is the Debtor delinquent in paying any insurance premium payment?
|
X
|
||
6
|
Have any payments been made on pre-petition liabilities this reporting period?
|
X
|
||
7
|
Are any post-petition receivables (accounts, notes or loans) due from related parties?
|
X
|
||
8
|
Are any post-petition payroll taxes past due?
|
X
|
||
9
|
Are any post-petition State or Federal income taxes past due?
|
X
|
||
10
|
Are any post-petition real estate taxes past due?
|
X
|
||
11
|
Are any other post-petition taxes past due?
|
X
|
||
12
|
Have any pre-petition taxes been paid during this reporting period?
|
X
|
||
13
|
Are any amounts owed to post-petition creditors delinquent?
|
X
|
||
14
|
Are any wages payments past due?
|
X
|
||
15
|
Have any post-petition loans been received by the Debtor from any party?
|
X
|
||
16
|
Is the Debtor delinquent in paying any US Trustee fees?
|
X
|
||
17
|
Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?
|
X
|
||
18
|
Have the owners or shareholders received any compensation outside of the normal course of business?
|
X
|
||
Explanations
|
||||
6
|
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.
|
|||
13
|
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.
|
Three Months Ended
|
Gross Revenues ($ in thousands)(1)
|
Total Prescriptions (2)
|
Vials Shipped to Customers (3)
|
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
|
$ 13,393
|
2,577
|
3,882
|
$ 13,006
|
3,046
|
3,770
|
|
10/31/2012(4)
|
$ 17,974
|
3,317
|
5,210
|
Notes:
|
|||
(1) Amounts shown are estimated based on the number of vials shipped and list price/vial.
|
|||
(2) Represents total prescriptions reported to the Debtors and does not include cancellations.
|
|||
(3) Represents paid vials shipped to the Debtors' customers, which include specialty pharmacies and distributors.
|
|||
(4) Data for the months of August, September, and October 2012 is used in the absence of complete data for the three months ending December 31, 2012.
|