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Exhibit 99.1

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

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-l

   X      

Schedule of Disbursements by Debtor Entity

  

MOR-la

   X      

Schedule of Debtor Bank Account Balances

  

MOR-lb

   X      

Schedule of Professional Fees and Expenses Paid

  

MOR-lc

   X      

Copies of bank statements

           

Certification Attached

Cash disbursements journals

           

Certification Attached

Bank reconciliation

           

Certification Attached

Statement of Operations

  

MOR-2

   X      

Balance Sheet

  

MOR-3

   X      

Status of Postpetition Taxes

           

Certification Attached

Copies of IRS Form 6123 or payment receipt

           

Certification Attached

Copies of tax returns filed during reporting period

           

Certification Attached

Summary of Unpaid Postpetition Debts

           

Summary of Unpaid Post Petition Accounts Payables

  

MOR-4

   X      

Accounts Receivable Aging

  

MOR-5

   X      

Debtor Questionnaire

  

MOR-5

   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/ Thomas P. Lynch

   

30 July 2018

Signature of Authorized Individual*     Date

Thomas P. Lynch

   

Chief Administrative Officer & General Counsel

Printed Name of Authorized Individual     Title of Authorized Individual

 

*

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.

Notes:

The last four digits of Debtor’s federal tax identification number are (8822). The Debtor’s mailing address for purposes of this chapter 11 case is 3344 North Torrey Pines Court, Suite 200, La Jolla, CA, 92037.


UNITED ST ATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

CERTIFICATION REGARDING POST-PETITION BANK ACCOUNT

RECONCILIATIONS, CASH DISBURSEMENT JOURNALS AND

COMPLIANCE AND PAYMENT OF POST-PETITION TAXES

I, Thomas Lynch, Chief Administrative Officer & General Counsel, of Orexigen Therapeutics, Inc. (the “Debtor”) hereby ceitify the following:

1. Attached to MOR-l is a listing of the Debtor’s bank accounts, by account number, and the opening and closing balances. These accounts are reconciled monthly in accordance with the Debtor’s ordinaiy course accounting practices and are available to the United States Trustee upon request.

2. Cash disbursement journals are maintained in accordance with the Debtor’s ordinaiy course accounting practices and are available to the United States Trustee upon request.

3. To the best of my knowledge and belief, the Debtor is current on all post-petition taxes, and no post-petition tax amounts are past due.

 

/s/ Thomas Lynch

     

30 July 2018

Thomas Lynch       Date
Chief Administrative Officer & General Counsel      


UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

 

In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

Notes to Monthly Operating Report

Debtor in Possession Financial Statements

The financial statements and supplemental information presented in this Monthly Operating Report (“MOR”) have been prepared using the Debtor’s books and records solely to comply with the requirements of the monthly reporting requirements under the United States Bankruptcy Code and those of the United States Trustee for Region Three.

The financial statements and supplemental information presented herein are unaudited, preliminary in nature, and may not comply with generally accepted accounting principles in the United States of America (“U.S. GAAP”) in all material respects. These preliminary unaudited financial statements and other information represent the Debtor’s good faith attempt to comply with the requirements of the United States Bankruptcy Code and those of the United States Trustee using the resources available. This information is limited in scope to the requirements of this report.

These preliminary unaudited financial statements have not been subject to procedures that would typically be applied to financial information presented in accordance with U.S. GAAP, and upon application of such procedures, the Debtor believes that the financial information could be subject to changes, which could be material. Certain totals may not sum due to rounding.

All related tax implications are not currently reflected in the preliminary unaudited financial statements herein. The financial impact of potential tax and other adjustments on the accompanying preliminary unaudited financial statements cannot be determined at this time.

There may be adjustments to the opening balance sheet as of March 12, 2018 that will impact these accompanying preliminary unaudited financial statements. ASC 805 permits a one-year measurement period in which the opening balance sheet can be adjusted if additional information becomes available.

Liabilities Subject to Compromise

As a result of the commencement of the Debtor’s chapter 11 case, the payment of certain prepetition indebtedness of the Debtor is subject to compromise or other treatment under a plan of reorganization.

Reorganization Items

ASC 852 requires expenses and income directly associated with the Debtor’s chapter 11 cases to be reported separately in the income statement as reorganization items. Reorganization items include expenses related to legal advisory and representation services, and other professional consulting and advisory services. Reorganization costs also include adjustment to record debt at the estimated amount of the claim.

Litigation

The Debtor is subject to lawsuits and claims that arise out of its operations in the normal course of business. Prior to the petition date, the Debtor was the defendant to various legal proceedings, described in detail in the most recent publicly filed financial statements, which are stayed during the course of the chapter 11 bankruptcy proceedings.

There are uncertainties inherent in any litigation and appeal and the Debtor cannot predict the outcome. At this time the Debtor is unable to estimate possible losses or ranges of losses that may result from such legal proceedings described in detail in the most recent publicly filed financial statements, and it has not accrued any amounts in connection with such legal proceedings in the financial statements herein, other than attorney’s fees accrued prior to the petition date.

Sale Transaction

On April 23, 2018, the Debtor entered into an asset purchase agreement with Nalpropion Pharmaceuticals, Inc. (the “Buyer”) for the sale of substantially all of its assets through section 363 of the Bankruptcy Code. This transaction was subsequently approved by the Bankruptcy Court on June 28, 2018. On July 27, 2018, the Debtor closed the sale and transferred substantially all of its assets to the Buyer. As part of the sale, the Debtor entered into a transition services agreement for the post-closing period through the effective date of a Plan of Liquidation. The Debtors are currently in discussions with their stakeholders to develop and file a Plan of Liquidation in the near term.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR - 1

Consolidated Schedule of Cash Receipts and Disbursements (1)

For the Period: June 1, 2018 - June 30, 2018

(Unaudited)

 

$ USD ‘000s

   June 1, 2018 - June 30, 2018     Cumulative
Since Filing
 

Beginning Cash Balance (Book)

   $ 17,109     $ 21,372  

Receipts

    

Operating Receipts

     14,773       48,732  

Miscellaneous Receipts

     24       254  
  

 

 

   

 

 

 

Total Receipts

     14,796       48,985  

Operating Disbursements

    

Payroll & Benefits / Contractors

     (2,419     (8,888

Inventory

     (1,146     (3,412

Manufacturing and Logistics

     (43     (120

Gross to Net Disbursements

     (9,590     (29,531

Marketing / Commercial Operations

     (1,102     (15,471

Ordinary Course Professionals

     (212     (498

Rent / Facilities / Equipment

     (138     (417

Insurance

     (76     (228

IT / Utilities

     (68     (242

Regulatory and Compliance

     (99     (385

Other G&A

     (253     (657
  

 

 

   

 

 

 

Total Operating Disbursements

     (15,144     (59,849

Operating Cash Flow

     (347     (10,864

Reorganization Costs

    

DIP Loan Interest and Fees

     (440     (726

US Trustee Fees

     —         (121

Restructuring Professional Fees

     (659     (1,099
  

 

 

   

 

 

 

Total Reorganization Costs

     (1,100     (1,946

Total Disbursements

   $ (16,244   $ (61,795
  

 

 

   

 

 

 

Lender Professional Fees

     (44     (545

Net Cash Flow

   $ (1,492   $ (13,354

DIP Draw - Cash

     —         7,600  
  

 

 

   

 

 

 

Ending Cash Balance (Book)

   $ 15,618     $ 15,618  

Notes:

 

(1)

The Schedule of Cash Receipts and Disbursements is presented on a book basis.

 


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR - 1a

Schedule of Disbursements by Debtor Entity (1)

For the Period: June 1, 2018 - June 30, 2018

(Unaudited)

 

$ USD ‘000s

Debtor        

 

June 1, 2018 - June 30, 2018

   

Cumulative

Since Filing

 

Orexigen Therapeutics, Inc.

  $ 16,288     $ 62,340  
 

 

 

   

 

 

 

Total

  $ 16,288     $ 62,340  

Notes:

 

(1)

The Schedule of Disbursements is presented on a book basis.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR - 1b

Schedule of Debtor Bank Account Balances (1)

For the Period: June 1, 2018 - June 30, 2018

(Unaudited)

 

$ USD ‘000s

Debtor        

 

Bank

  Last Four Digits
Account No.
    

Account Description

  Beginning
Balance
6/1/2018
    Ending
Balance
6/30/2018
 

Orexigen Therapeutics, Inc.

  Silicon Valley Bank     6813      General checking   $ 2     $ 190  

Orexigen Therapeutics, Inc.

  Silicon Valley Bank     1180      Zero-balance lockbox     —         —    

Orexigen Therapeutics, Inc.

  Silicon Valley Bank     3036      Sweep account     17,301       15,434  

Orexigen Therapeutics, Inc.

  Silicon Valley Bank     7307      Utility adequate assurance     10       10  

Orexigen Therapeutics, Inc.

  Silicon Valley Bank     5177      Collateral     100       100  

Orexigen Therapeutics, Inc.

  U.S. Bank     4219      Investment account(2)     —         —    

Orexigen Therapeutics, Inc.

  State Street Bank & Trust     2355      Investment account(2)     —         —    

Orexigen Therapeutics, Inc.

  Wells Fargo     3348      Foreign wire transfer account(2)     —         —    

Orexigen Therapeutics, Inc.

  JMP Securities LLC     0041      Investment account(2)     —         —    
        

 

 

   

 

 

 

Total Bank Account Balances

         $ 17,413     $ 15,734  
        

 

 

   

 

 

 

Notes:

 

(1)

The Consolidated Schedule of Cash Receipts and Disbursements (MOR-1) and Schedule of Disbursements by Debtor Entity (MOR-1a) represent book balances while MOR-1b represents bank balances. The balances differ primarily due to the bank’s delayed recording of intrabank activity between the general checking and sweep accounts.

(2)

Account was closed in April 2018.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR - 1c

Schedule of Professional Fees and Expenses Paid

For the Period: June 1, 2018 - June 30, 2018

(Unaudited)

 

                      Month Ended 6/30/18     Cumulative Since Filing  

Payee

 

Category

 

Payor

  Date   Period Covered     Fees     Expenses     Fees     Expenses  

Retained

Professionals

               

Hogan Lovells US LLP

  Debtor Counsel   Orexigen Therapeutics, Inc.   6/1/2018     3/12/2018 - 3/31/2018     $ 262,805     $ 106     $ 262,805     $ 106  

Morris, Nichols, Arsht & Tunnell LLP

  Debtor Local Counsel   Orexigen Therapeutics, Inc.   6/1/2018     3/12/2018 - 3/31/2018       92,663       5,009       92,663       5,009  

Perella Weinberg Partners1

  Debtor Investment Banker   Orexigen Therapeutics, Inc.             437,500       1,738  

Kurtzman Carson Consultants LLC

  Claims Agent   Orexigen Therapeutics, Inc.   6/20/2018     3/12/2018 - 5/31/2018       143,705       155,188       143,705       155,188  

Other Restructuring Professionals

               

Wilmington Trust, National Association

 

DIP Administrative Agent

 

Orexigen Therapeutics, Inc.

          $ 50,000     $ —    

Arnold & Porter Kaye Scholer LLP

 

DIP Administrative Agent Counsel

 

Orexigen Therapeutics, Inc.

  6/28/2018     3/1/2018 - 3/31/2018       6,567       99       67,217       99  

Quinn Emanuel Urquhart & Sullivan, LLP

 

DIP Lenders Counsel

 

Orexigen Therapeutics, Inc.

            172,846       236  

Brown Rudnick LLP

 

DIP Lender Counsel

 

Orexigen Therapeutics, Inc.

            134,881       1,497  

Whiteford Taylor Preston

 

DIP Lenders Local Counsel

 

Orexigen Therapeutics, Inc.

            129,090       1,383  

U.S. Bank, N.A.

 

Indenture Trustee

 

Orexigen Therapeutics, Inc.

  6/28/2018     4/1/2018 - 4/31/2018       37,213       443       37,213       443  
         

 

 

   

 

 

   

 

 

   

 

 

 

Total

          $ 542,952     $ 160,845     $ 1,527,918     $ 165,699  

Notes:

 

(1)

The 4/18/2018 Perella Weinberg Partners payment was a clerical error and paid prior to the filing of a fee application. The amount paid will be offset against future fee applications filed.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR - 2

Statement of Operations

For the Period: June 1, 2018 - June 30, 2018

(Unaudited)

 

$ USD ‘000s

   June 1, 2018 - June 30, 2018     March 12 - June 30, 2018  

Net product sales

   $ 4,815     $ 24,977  

Cost of product sales

     (1,142     (5,607

Operating expenses:

    

Research and development

     (554     (2,367

Selling, general and administrative

     (4,177     (28,822

Amortization expense of intangible assets

     (661     (2,411
  

 

 

   

 

 

 

Total operating expenses

     (5,392     (33,600
  

 

 

   

 

 

 

Loss from operations

     (1,719     (14,230

Other income/(expense):

    

Interest income

     148       542  

Refundable tax credit(2)

     —         1,300  

Interest expense

     (147     (600
  

 

 

   

 

 

 

Total other income (expenses)

     0       1,242  
  

 

 

   

 

 

 

Net loss

     (1,719     (12,988

Reorganization expenses (1)

     (3,751     (178,290
  

 

 

   

 

 

 

Net loss

   $ (5,470   $ (191,278
  

 

 

   

 

 

 

Notes:

 

(1)

Reorganization expenses includes the write up of the notes to the principle balance and the elimination of the debt discount and debt costs related to the 2013 debt.

(2)

Refundable tax credit includes refundable alternative minimum tax as created by the Tax Cuts and Jobs Act.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR - 3

Balance Sheet

(Unaudited)

 

     Orexigen Therapeutics, Inc.  

$ USD ‘000s

   As of March 11, 2018      As of June 30, 2018  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 21,372      $ 15,618  

Accounts receivable, net

     19,203        28,575  

Inventory

     8,857        7,663  

Prepaid expenses and other current assets

     6,868        10,044  

Intercompany receivable(1)

     93,353        94,444  
  

 

 

    

 

 

 

Total current assets

     149,653        156,344  

Non-current assets:

     

Property and equipment, net

     543        444  

Investment in Subsidiary(1)

     19,000        19,000  

Intangible assets

     66,566        64,156  

Other long-term assets

     588        1,643  

Restricted cash

     100        110  
  

 

 

    

 

 

 

Total assets

   $ 236,450      $ 241,697  
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable (2)

     925        3,039  

DIP loan (3)

     —          8,043  

Accrued expenses

     3,921        21,710  
  

 

 

    

 

 

 

Total current liabilities:

     4,846        32,792  
  

 

 

    

 

 

 

Total liabilities not subject to compromise

     4,846        32,792  

Total liabilities subject to compromise

     110,381        280,064  

Series Z preferred stock

     3,343        —    

Stockholders’ equity (deficit)

     117,880        (71,159
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity (deficit)

   $ 236,450      $ 241,697  
  

 

 

    

 

 

 

Notes:

 

(1)

Investment in Subsidiary $19m reclassed from Intercompany Receivable at March 11, 2018 to properly align for reporting.

(2)

Accounts payable includes pre-petition amounts approved by the Court and paid post-petition.

(3)

DIP loan includes accrued interest.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR-4

Summary of Unpaid Post Petition Accounts Payables

As of June 30, 2018

(Unaudited)

 

$ USD ‘000s

 
    

Number of Days Past Due

 
Post Petition Accounts Payable Aging    Current      0-30      31-60      61-90      Over 90      Total  

Post-Petition Accounts Payable (1)

   $ 2,976      $ 63      $ —        $ —        $ —        $ 3,039  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,976      $ 63      $ —        $ —        $ —        $ 3,039  

Notes:

 

(1)

The above figures represent post petition trade payables recorded in the Debtors’ subledger.


In re: Orexigen Therapeutics, Inc.    Case No. 18-10518 (KG)
Debtor    Reporting Period: June 1, 2018 - June 30, 2018

MOR-5

Accounts Receivable Aging

As of June 30, 2018

(Unaudited)

 

$ USD ‘000s                                          
Accounts Receivable Aging    Current      0-30 Days      31-60 Days      61-90 Days      91 Days +      Total  

Accounts Receivable, net

   $ 22,488      $ 2,539      $ 6      $ 3,500      $ 42      $ 28,575  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 22,488      $ 2,539      $ 6      $ 3,500      $ 42      $ 28,575  

Debtor Questionnaire

 

Must be completed each month

  

Yes

  

No

1.    Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.       X
2.    Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.       X
3.    Have all post petition 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


CERTIFICATE OF SERVICE

I, Andrew R. Remming, certify that I am not less than 18 years of age, and that service of the foregoing Monthly Operating Report for the reporting period June 1, 2018 – June 30, 2018, was caused to be made on July 30, 2018, in the manner indicated upon the party identified below.

VIA HAND DELIVERY

Attn: Timothy Fox, Esq.

Office of the United States Trustee

J. Caleb Boggs Federal Building

844 North King Street, Suite 2207

Wilmington, DE 19801

 

Dated: July 30, 2018    

/s/ Andrew R. Remming

    Andrew R. Remming (No. 5120)