SEC Filings

PERNIX THERAPEUTICS HOLDINGS, INC. filed this Form 8-K on 06/26/2019
Entire Document




In re: Pernix Sleep, Inc. et al. Case No. 19-10323 (CSS)
Debtors Reporting Period: April 1, 2019 - April 30, 2019


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 Debtors' books and records solely to comply with 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 Debtors believe 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 February 17, 2019 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 Debtors' chapter 11 cases, the payment of certain prepetition indebtedness of the Debtors are subject to compromise or other treatment under a plan of reorganization.


Reorganization Items


ASC 852 requires expenses and income directly associated with the Debtors' 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 and an estimate of the loss on sale of assets which is pending a valuation.




The Debtors are subject to lawsuits and claims that arise out of its operations in the normal course of business. Prior to the petition date, the Debtors were 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 Debtors cannot predict the outcome. At this time the Debtors are 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 February 19, 2019, the Debtor entered into an asset purchase agreement with Highbridge Capital Management, LLC (the "Buyer") for the sale of substantially all of its assets through section 363 of the Bankruptcy Code. This transaction was