Violin Memory Inc - FORM 8-K - EX-99.1

Violin Memory Inc - FORM 8-K - EX-99.1 - March 24, 2017

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Violin Memory Inc Reports

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8-K - FORM 8-K - Violin Memory Inc	d363655d8k.htm

Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE


In re Violin Memory, Inc.		Case No. 16-12782 (LSS)
		Reporting Period: February 1, 2017 - February 28, 2017

MONTHLY OPERATING REPORT

File with Court and submit copy to United States Trustee within 20 days after end of month.

Submit copy of report to any official committee appointed in the case.

REQUIRED DOCUMENTS

Form No.

Document
Attached

Explanation
Attached

Affidavit /
Supplement
Attached

Schedule of Cash Receipts and Disbursements

MOR-1

Bank Reconciliation (or copies of debtor’s bank reconciliations)

MOR-1a

Schedule of Professional Fees Paid

MOR-1b

Copies of bank statements

Cash disbursements journals

Statement of Operations

MOR-2

Balance Sheet

MOR-3

Status of Postpetition Taxes

MOR-4

Copies of IRS Form 6123 or payment receipt

N/A

Copies of tax returns filed during reporting period

None

Summary of Unpaid Postpetition Debts

MOR-4

Listing of aged accounts payable

MOR-4

Accounts Receivable Reconciliation and Aging

MOR-5

Debtor Questionnaire

MOR-5

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.

*	Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS


	BANK ACCOUNTS																		CURRENT MONTH				CUMULATIVE FILING TO DATE
	Concen (6057)			AP (8879)			Collat. (Acct: 6659)		Prof Svcs (Acct: 6061)		DIP Collateral (Acct: 1164)			Payroll (Acct: 2592)			Benefits (Acct: 6076)		ACTUAL		PROJECTED		ACTUAL		PROJECTED
CASH BEGINNING OF MONTH	$	3,408,890		$	—		$	—	$	—	$	—		$	—		$	—	$	3,408,890	$	2,960,481	$	3,676,714	$	3,676,835
RECEIPTS
Accounts receivable		—			—			—		—		24,338			—			—		24,338		—		1,482,412		1,016,270
Sale of assets		—			—			—		—		66,458			—			—		66,458		—		66,458		—
Other		4,802			5,659			—		—		38,475			—			—		48,937		220,000		497,266		271,385
Intra-bank Transfers, net		(5,358,946	)		888,840			3,285,270		516,538		(50,758	)		700,030			19,026		—		—		—		—
Transfers from DIP Accts		2,502,000			—			—		—		—			—			—		2,502,000		2,752,000		2,502,000		2,752,000

TOTAL RECEIPTS		(2,852,143	)		894,499			3,285,270		516,538		78,513			700,030			19,026		2,641,733		2,972,000		4,548,136		4,039,655

DISBURSEMENTS
Payroll		—			—			—		—		—			706,919			—		706,919		505,263		2,416,670		1,730,045
Benefits		35,386			—			—		—		—			—			19,026		54,411		166,919		112,330		329,694
Expense reimb.		—			21,431			—		—		—			—			—		21,431		40,000		57,557		70,000
Vendor payments		1,195			333,847			—		—		—			—			—		335,042		701,909		684,854		1,068,362
Sales Tax		—			1,232			—		—		460			—			—		1,692		—		21,986		—
Rent		—			578,347			—		—		—			—			—		578,347		580,000		578,347		580,000
Transfers to DIP Accts		—			—			—		—		—			—			—		—		—		—		—
Professional Fees		—			—			—		—		—			—			—		—		—		—		—
U.S. Trustee Quarterly Fees		—			—			—		—		—			—			—		—		—		325		4,875
Court Costs		—			—			—		—		—			—			—		—		—		—		—

TOTAL DISBURSEMENTS		36,581			934,857			—		—		460			706,919			19,026		1,697,841		1,994,091		3,872,069		3,782,976

NET CASH FLOW	$	(2,888,724	)	$	(40,358	)	$	3,285,270	$	516,538	$	78,054		$	(6,888	)	$	—	$	943,892	$	977,909	$	676,067	$	256,679

CASH END OF MONTH	$	520,166		$	(40,358	)	$	3,285,270	$	516,538	$	78,054		$	(6,888	)	$	—	$	4,352,782	$	3,938,390	$	4,352,782	$	3,933,515


DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES
TOTAL DISBURSEMENTS																									$	1,697,841
Less: Transfers to DIP accounts																										—
Plus: Estate Disbursements made by outside sources (i.e. from escrow accounts)																										—

TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES																									$	1,697,841

NOTE: ALL OTHER BANK ACCOUNTS REFLECTED NO ACTIVITY FOR THE MONTH


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

BANK RECONCILIATIONS


	Concen (Acct: 6057)		AP (Acct: 88879)					Reserve (Acct: 6659)		Prof Svcs (Acct: 6061)		DIP Collateral (Acct:1164)		Payroll (Acct: 2592)
BALANCE PER BOOKS	$	520,166			$	(40,358	)	$	3,285,270	$	516,538	$	78,054			$	(6,888	)

BANK BALANCE	$	520,166			$	—		$	3,285,270	$	516,538	$	78,054			$	—
(+) DEPOSITS IN TRANSIT (ATTACH LIST)		—				—			—		—		—				—
(-) OUTSTANDING CHECKS (ATTACH LIST)		—				(40,358	)		—		—		—				(6,888	)
OTHER (ATTACH EXPLANATION)		—				—			—		—		—				—

ADJUSTED BANK BALANCE *	$	520,166			$	(40,358	)	$	3,285,270	$	516,538	$	78,054			$	(6,888	)

* Adjusted bank balance must equal balance per books

DEPOSITS IN TRANSIT			Date		Amount									Date		Amount

CHECKS OUTSTANDING			CK#		Amount									CK#		Amount
				50029	$	1,232.39									101279	$	2,654.33
				50031	$	63.34									101283	$	1,569.61
				50032	$	32.63									101284	$	2,664.30
				50041	$	1,094.00
				50044	$	554.83
				50045	$	3,792.75
				50047	$	11,500.00
				50049	$	4,550.00
				50056	$	436.54
				50053	$	477.64
				50055	$	43.75
				50060	$	1,500.00
				50061	$	2,100.00
				50062	$	7,700.00
				50063	$	5,280.00

NOTE: The remaining bank and book balances are zero.


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

SCHEDULE OF PROFESSIONAL FEES AND EXPENSES PAID

Payee

Period
Covered

Amount
Approved

Payor

Check

Amount Paid

Year-To-Date

Check #

Date

Fees

Expenses

Fees

Expenses

US Trustee

Q4 2016

4,550

Violin Memory Inc

50049

2/23/17

4,550

—

4,875

—

Violin Memory Inc

Grand Total

4,550.00

4,550

—

4,875

—


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

STATEMENT OF OPERATIONS


	Feb 2017			Cumulative Filing to Date
REVENUE
Product revenue	$	149,900		$	39,709
Service revenue		1,504,035			4,319,203

Total Revenue		1,653,935			4,358,912

COST OF REVENUE
Cost of product revenue		325,652			518,348
Cost of service revenue		659,997			1,214,231

Total cost of revenue		985,649			1,732,579

Gross profit		668,285			2,626,333

OPERATING EXPENSES
Personnel costs		743,947			1,858,872
Outside services		292,639			382,754
Marcom		(210,869	)		(443	)
Equipment/Software		111,469			737,583
Travel & Entertainment		(6,607	)		17,097
Depreciation & Amortization		330,382			840,818
Other Expenses		34,036			124,825
Facility Expenses		100,260			344,837
Intercompany Expenses		—			813,773

Total operating expenses		1,395,257			5,120,116

Loss from operations		(726,972	)		(2,493,783	)

OTHER INCOME AND EXPENSES
Other income, net		(7,004	)		(54,819	)
Interest and other financing expense		—			(1,505,524	)

Net loss before reorganization items		(733,976	)		(4,054,125	)

REORGANIZATION ITEMS
Professional fees		836,392			2,696,836
U.S. Trustee quarterly fees		33,886			43,094
Personnel costs		—			—
Gain (loss) from sale of assets		(257,040	)		(257,040	)

Total reorganization expenses		1,127,318			2,996,970

Loss before income taxes		(1,861,294	)		(7,051,095	)
Income taxes		—			400

Net loss	$	(1,861,294	)	$	(7,051,495	)


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

BALANCE SHEETS


	Book Value at End of Current Reporting Month			Book Value on Petition Date
	Feb 28, 2017			Dec 14,2016
Assets
Current assets:
Cash	$	4,352,782		$	3,676,714
Accounts receivable, net		1,223,473			1,901,568
Inventory		7,530,934			9,982,190
Other current assets		1,896,797			2,015,187

Total current assets		15,003,986			17,575,659

Property and equipment, net		5,411,992			6,216,346
Other assets		5,653,628			4,986,074

	$	26,069,606		$	28,778,079

Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise (Post-petition)
Accounts payable	$	701,054		$	—
Taxes payable		60,406			—
Accrued liabilities		2,458,016			—

Total post-petition liabilities		3,219,476			—

Liabilities Subject to Compromise (Pre-petition)
Secured debt		250,826			250,826
Priority debt		1,795,827			1,795,827
Unsecured debt		143,131,754			141,904,381

Total pre-petition liabilities		145,178,408			143,951,035

Total liabilities		148,397,884			143,951,035

Stockholders’ deficit:
Common stock		2,440			2,440
Additional paid-in capital		514,162,674			514,266,501
Accumulated deficit—pre-petition		(629,441,896	)		(629,441,896	)
Accumulated deficit—post-petition		(7,051,495	)		—

Total stockholders’ deficit		(122,328,278	)		(115,172,956	)

	$	26,069,606		$	28,778,079


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

SUMMARY OF POST-PETITION TAXES AND UNPAID DEBTS


	Beginning Tax Liability		Accrued or Withheld			Amount Paid		Date Paid		EFT		Ending Tax Liability
Federal
Withholding	$	—	$	50,044		$	50,044		2/15/2017	$	—	$	—
FICA-Employee		—		25,442			25,442		2/15/2017		—		—
FICA-Employer		—		25,442			25,442		2/15/2017		—		—
Unemployment		—		45			45		2/15/2017		—		—
Withholding		—		48,008			48,008		2/28/2017		—		—
FICA-Employee		—		24,443			24,443		2/28/2017		—		—
FICA-Employer		—		24,443			24,443		2/28/2017		—		—
Unemployment		—		49			49		2/28/2017		—		—
Income		—									—		—

Total Federal Taxes	$	—	$	197,917		$	197,917			$	—	$	—

State and Local
Withholding	$	—	$	19,505		$	19,505		2/15/2017	$	—	$	—
Unemployment—Employee		—		2,750			2,750		2/15/2017		—		—
Unemployment—Employer		—		592			592		2/15/2017		—		—
Withholding		—		18,765			18,765		2/28/2017		—		—
Unemployment—Employee		—		2,680			2,680		2/28/2017		—		—
Unemployment—Employer		—		787			787		2/28/2017		—		—
Sales tax—Kentucky		1,254		—			1,254		2/3/2017		—		—
Sales tax—New York		—		684			—				—		684
Sales tax—Texas		—		879			—				—		879
Sales tax—Texas		462		(2	)		460		2/21/2017		—		—
Use tax—California		58,844		—			—				—		58,844
Income		—		—			—				—		—
Personnal property		—		—			—				—		—

Total State and Local	$	60,559	$	46,639		$	46,792			$	—	$	60,406


	Summary of Unpaid Postpetition Debts
	Number of Days Past Due
	Current		0-30			31-60		61-90		Over 90		Total
Accounts Payable	$	60,838	$	149,579		$	—	$	827	$	—	$	211,243
Wages Payable		—		—			—		—		—		—
Taxes Payable		—		—			—		—		—		—
Rent/Leases—Building		—		26,058			—		—		—		26,058
Rent/Leases—Equipment		—		—			—		—		—		—
Secured Debt/Adequate protection payments		—		—			—		—		—		—
Professional Fees		—		161,395			152,358		150,000		—		463,752
Amounts due to Insiders		—		—			—		—		—		—
Other		—		—			—		—		—		—

Total Postpetition debts	$	60,838	$	337,031		$	152,358	$	150,827	$	—	$	701,054


In re: Violin Memory, Inc.	Case No.:	16-12782 (LSS)
	Reporting Period:	February 28, 2017

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING


Accounts Receivable Reconciliation	Amount
Total Accounts Receivable at the beginning of the reporting period	$	384,289
Plus: Amounts billed during the period		862,532
Minus: Amounts collected during the period		23,348
Minus: Increase in allowance for uncollectible accounts		—

Total Accounts Receivable at the end of the reporting period	$	1,223,473


Accounts Receivable Aging	Amount
Current	$	400,934
0 - 30 days past due		438,712
31 - 60 days past due		441,439
61+ days past due		682,357

Total account receivable		1,963,441

Amount considered uncollectible		(739,969	)

Accounts receivable, net	$	1,223,473

DEBTOR QUESTIONNAIRE


1. Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.		Yes

Sold excess component parts out of inventory and sold misc. office furniture in connnection with vacating a portion of the debtor’s corporate headquarters

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.		No

3. Have all post-petition tax returns been timely filed? If no, provide an explanation below.		Yes

4. Are workers compensation, general liability, and other necessary insurance coverages in effect? If no, provide an explanation below.		Yes

5. Has any bank account been opened during the reporting period?		No

/s/ Cory Sindelar

March 20, 2017

Signature of Authorized Individual*

Cory Sindelar

Chief Financial Officer

Printed Name of Authorized Individual

Title of Authorized Individual