/raid1/www/Hosts/bankrupt/TCR_Public/220524.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, May 24, 2022, Vol. 26, No. 143
Headlines
10-10 TRAINING: Files Emergency Bid to Use Cash Collateral
152 S IRVING: Court Approves Disclosure Statement
1917 HEIGHTS: June 27 Plan Confirmation Hearing Set
1917 HEIGHTS: Sale Proceeds to Fund Plan; Plan Hearing June 27
2999TC ACQUISITIONS: Court Confirms Amended Plan of Reorganization
942 PENN RR: Case Summary & Nine Unsecured Creditors
ABDOUN ESTATE: Unsecureds Will be Paid From Available Funds
ABRAXAS PETROLEUM: All Three Proposals Passed at Annual Meeting
ABRAXAS PETROLEUM: Posts $40.1 Million Net Income in First Quarter
ACRO BIOMEDICAL: Incurs $3.9 Million Net Loss in First Quarter
ADAMIS PHARMACEUTICALS: Reports $10.4M Net Loss for First Quarter
AE OPCO: Wins Interim Cash Collateral Access
AEMETIS INC: Incurs $18.3 Million Net Loss in First Quarter
AIKIDO PHARMA: Reports $3.5 Million Net Loss in First Quarter
AINOS INC: Incurs $2.1 Million Net Loss in First Quarter
ALL FOR ONE: Incurs $3.5 Million Net Loss in Second Quarter
AMERICANN INC: Posts $24K Net Income in Second Quarter
ANIMO INGLEWOOD: Fitch Affirms 'BB+' Rating on $7.09MM School Bonds
APPLIED ENERGETICS: Incurs $1.8 Million Net Loss in First Quarter
ARMSTRONG FLOORING: To Layoff 600 Plus Workers If No Buyer
ARTHUR GROOM: Case Summary & Eight Unsecured Creditors
AVAYA HOLDINGS: S&P Downgrades ICR to 'B-', Outlook Negative
AYTU BIOPHARMA: Incurs $53.1 Million Net Loss in Third Quarter
BALTIMORE HOTEL: S&P Raises Secured Revenue Bond Rating to 'CCC+'
BARRERA FAMILY TRANSPORT: Starts Chapter 11 Subchapter V Case
BARRETT AND PEREZ: Starts Chapter 11 Subchapter V Case
BAUSCH + LOMB: Fitch Assigns 'BB-' LT IDR, On Watch Positive
BLUE DOLPHIN: Posts $3.5 Million Net Income in First Quarter
CARIBBEAN BANANA: Seeks Bankruptcy Protection
CASSWAY CONTRACTING: Wins Access to TD Bank's Cash Collateral
CENTENNIAL RESOURCE: S&P Places 'B' ICR on Watch Pos. on Merger
CFN ENTERPRISES: Delays Filing of First Quarter Form 10-Q
CFN ENTERPRISES: Incurs $12.2 Million Net Loss in 2021
CHILAQUILES FACTORY: Taps Kristy R. Cortez CPA as Accountant
CHRISTIAN CARE CENTERS: Case Summary & 30 Top Unsecured Creditors
CHRISTIAN CARE: Files for Chapter 11 to Sell to Boncrest
CIRTRAN CORP: Incurs $297K Net Loss in First Quarter
COLGATE ENERGY: S&P Places 'B' ICR on Watch Positive on Merger
COLLEGE CABLE: Gets Final Cash Collateral Access
COMPASS POINTS: Starts Chapter 11 Subchapter V Case
COOK & BOARDMAN: S&P Lowers ICR to 'B-' Due to Elevated Leverage
COSMOS HOLDINGS: Posts $203K Net Income in First Quarter
D&F RESOURCES: Files for Chapter 11 With $2M Debt to Lone Star
DAYCO LLC: S&P Downgrades ICR to 'CCC' on Refinancing Risk
DEMO REALTY: May Access Cash Collateral Thru June 6
DIGIPATH INC: Incurs $374K Net Loss in Second Quarter
DIOCESE OF CAMDEN: Asks Court to Hear Insurer Deal With Plan
DUNWOODY LABS: Files Emergency Bid to Use Cash Collateral
EAGLE BEAR: Voluntary Chapter 11 Case Summary
EDGEWATER HOLDINGS: Taps Cosculluela & Marzano as Special Counsel
ENSTROM HELICOPTER: Chapter 7 Sale Saves Business, 70+ Jobs
FORTRESS TRANSPORTATION: Fitch Affirms 'BB-' IDR, Outlook Negative
GAUCHO GROUP: Incurs $2.3 Million Net Loss in First Quarter
GIGAMON INC: Fitch Withdraws 'B' LongTerm IDR
GODFREY ROSE: Voluntary Chapter 11 Case Summary
HAN JOE RO: Gets Court Nod to Use Cash Collateral
HOUSTON BLUEBONNET: Unsecureds Will Get 100% of Claims in 60 Months
INVEPA INTERNATIONAL: Seeks to Hire Meyer & Nunez as Legal Counsel
INVEPA INTERNATIONAL: U.S. Trustee Unable to Appoint Committee
INVO BIOSCIENCE: Incurs $2.8 Million Net Loss in First Quarter
ISAGENIX WORLDWIDE: S&P Downgrades ICR to 'CCC', Outlook Negative
JADE INVESTMENTS: Seeks Access to K&S Note's Cash Collateral
JINZHENG GROUP: Testa Appointed as New Committee Member
KDA PROPERTIES: Nativ Hotel Slated for June 2022 Auction
KNOX CLINIC: Cottage Clinic Laid Off 5 Workers Without Notice
LATAM AIRLINES: Spurned Creditors Decry Lender 'Extreme' Fratricide
LATAM AIRLINES: Unsec. Creditors Say Plan Violates Bankruptcy Code
LIBERATED SPECIALTY: In Talks w/ Creditors, to File Plan in August
LTL MANAGEMENT: Plan Exclusivity Period Extended to Sept. 9
MAJESTIC HILLS: Plan and Disclosures Due May 27
MALLINCKRODT PLC: Will Issue $650M First Lien Senior Secured Notes
MEG ENERGY: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
MEGA-PHILADELPHIA: Wins Cash Collateral Access Thru July
MGM RESORTS: Fitch Withdraws BB- Issuer Default Rating
MLK BRYANT: July 5 Plan Confirmation Hearing Set
MTPC LLC: Plan Exclusivity Period Extended to June 15
NELSON FAMILY LAWN: Starts Chapter 11 Subchapter V Case
OMAGINE INC: Further Fine-Tunes Plan Documents
ORIGINCLEAR INC: Incurs $3.6 Million Net Loss in First Quarter
OSCEOLA FENCE: Unsecureds Will Get 50% Dividend in 48 Months
OZOP ENERGY: Unit to Buy $11 Million in Solar Panels to Meet Demand
PARETEUM CORP: May Use $3MM of Circles DIP Loan
PARTY CITY: S&P Downgrades ICR to 'B-', Outlook Negative
PETSMART LLC: S&P Alters Outlook to Positive, Affirms 'B' ICR
PHUNWARE INC: Incurs $14.9 Million Net Loss in First Quarter
PIAGGIO AMERICA: Amends Unsecured Creditors Claims Pay Details
PIONEER POWER: Incurs $788K Net Loss in First Quarter
PLAYA HOTELS: S&P Upgrades ICR to 'B', Outlook Stable
POLAR POWER: Incurs $1.1 Million Net Loss in First Quarter
PRACTICAL PRACTICE: Involuntary Chapter 11 Case Summary
PRIMARY PRODUCTS: Fitch Assigns 'BB' LongTerm IDRs, Outlook Stable
PROFESSIONAL DIVERSITY: Incurs $703K Net Loss in First Quarter
PROMEDICA HEALTH: Fitch Lowers LT IDR to 'BB+', Outlook Negative
QHC FACILITIES: Seeks to Hire Dentons Davis Brown as Co-Counsel
RED RIVER: Plan Exclusivity Period Extended to June 14
REMARK HOLDINGS: Incurs $25.4 Million Net Loss in First Quarter
RIVER MILL: Gets Interim Cash Collateral Access Thru Aug. 7
SMG INDUSTRIES: Incurs $3.6 Million Net Loss in First Quarter
STEM HOLDINGS: Incurs $3.5 Million Net Loss in Second Quarter
T.G. UNITED INC: Hits Chapter 11 Bankruptcy
TALEN ENERGY: Fitch Lowers LongTerm IDR to 'D' on Bankruptcy Filing
TELKONET INC: Incurs $518K Net Loss in First Quarter
TERRA MANAGEMENT: Unsecureds to Get 10% Under Plan
THOMASBORO LANDCO: Seeks to Hire Manning Fulton as Special Counsel
VERANO RECOVERY: Unsecureds Will be Paid in Full in Plan
VIDEO RIVER: Posts $599K Net Income in First Quarter
VOYAGEUR IMAGING: Wins Interim Collateral Access
VYANT BIO: Incurs $9.2 Million Net Loss in First Quarter
W K ZARTMAN FARMS: Starts Chapter 11 Subchapter V Case
WATER WIND: Files for Chapter 11 to Stop Trustee's Sale
WITHOUT WALLS PROPERTY: Chapter 11 Case Dismissed
YU HUA LONG: Chan/Kwan Plan Contemplates Liquidation
*********
10-10 TRAINING: Files Emergency Bid to Use Cash Collateral
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10-10 Training of Cedar Park, LLC asks the U.S. Bankruptcy Court
for the Western District of Texas, Austin Division, for authority
to use cash collateral and provide adequate protection.
The Debtor has an immediate need to use the cash collateral of
Delta Bridge Funding, Rapid Finance, and Fora Financial, the
Debtor's secured creditors claiming liens on the Debtor's personal
property including cash and accounts.
The cash collateral will be used to continue the Debtor's ongoing
operations.
The Debtor can adequately protect the interests of the Secured
Lenders by providing the Secured Lenders with post-petition liens,
a priority claim in the Chapter 11 bankruptcy case, and cash flow
payments.
A copy of the motion is available at https://bit.ly/3NpqAii from
PacerMonitor.com.
About 10-10 Training of Cedar Park, LLC
10-10 Training of Cedar Park, LLC is a gym offering monthly
memberships as well as personal training located in Cedar Park,
Texas. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 22-10312) on May 16,
2022. In the petition signed by Kenneth Fidje, manager, the Debtor
disclosed up to $50,000 in assets and up to $100,000 in
liabilities.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, is
the Debtor's counsel.
152 S IRVING: Court Approves Disclosure Statement
-------------------------------------------------
Judge Kathryn C. Ferguson has entered an order approving the
Disclosure Statement dated May 13, 2022, explaining 152 S Irving CG
LLC's Chapter 11 Plan.
June 23, 2022, at 2:00 p.m. is fixed as the date and time for the
hearing on confirmation of the Plan.
Written acceptances, rejections or objections to the Plan must be
filed not less than 7 days before the hearing on confirmation of
the Plan.
About 152 S. Irving CG, LLC
152 S. Irving CG LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)).
Colon Venture Group, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. D.N.J. Case No. 22-10023) on Jan. 3, 2022.
152 S. Irving CG LLC also filed a Chapter 11 bankruptcy petition
(Bankr. D.N.J. Case No. 22-10294) on Jan. 13, 2022. The Debtor
estimated assets of $500,000 to $1 million and debt of $1 million
to $10 million.
The Hon. Kathryn C. Ferguson is the case judge.
The cases are jointly administered under Case No. 22-10294.
SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA, LLP, is the Debtors'
counsel.
1917 HEIGHTS: June 27 Plan Confirmation Hearing Set
---------------------------------------------------
On March 31, 2022, debtor 1917 Heights Hospital, LLC filed with the
U.S. Bankruptcy Court for the Southern District of Texas a
Disclosure Statement referring to Chapter 11 Plan.
On May 17, 2022, Judge Eduardo Rodriguez approved the Disclosure
Statement and ordered that:
* May 31, 2022, is the deadline for the filing of a modified
plan, if any.
* June 17, 2022, is the deadline for filing and serving
written objections to confirmation of the Plan.
* June 23, 2022, is the deadline for filing ballots accepting
or rejecting the Plan.
* June 27, 2022, at 2:30 p.m. at the United States Bankruptcy
Court, Bob Casey Federal Building, Courtroom #401, 515 Rusk Ave,
Houston Texas 77002 is the evidentiary hearing on confirmation of
the Plan.
A copy of the order dated May 17, 2022, is available at
https://bit.ly/3Nt01bP from PacerMonitor.com at no charge.
Attorneys for Debtor:
Steven D. Shurn
HUGHES WATTERS ASKANASE, L.L.P
1201 Louisiana, St., 28th Floor
Houston, Texas 77002
Telephone: (713) 759-0818
Facsimile: (713) 759-6834
Cell Phone: (713) 410-2139
E-mail: sshurn@hwallp.com
About 1917 Heights Hospital
1917 Heights Hospital, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-31811) on June 1,
2021. In its petition, the Debtor listed $100 million to $500
million in assets and $10 million to $50 million in liabilities.
Dr. Dharmesh Patel, manager, signed the petition.
Judge Eduardo V. Rodriguez oversees the case.
Hughes Watters Askanase, LLP, is the Debtor's bankruptcy counsel.
1917 HEIGHTS: Sale Proceeds to Fund Plan; Plan Hearing June 27
--------------------------------------------------------------
1917 Heights Hospital, LLC, filed with the U.S. Bankruptcy Court
for the Southern District of Texas a Disclosure Statement regarding
Chapter 11 Plan dated May 19, 2022.
The Debtor is a Texas limited liability company. The Debtor was a
landlord, with its primary asset being the medial office building
located at 1917 Ashland Street, Houston, Texas 77008 (the "Medical
Office Building").
On July 22, 2021, following pre-petition and post-petition
marketing efforts of the Medical Office Building and extensive
negotiations with purchaser Platinum Heights, LLC ("Purchaser"),
the Debtor filed its motion seeking approval of the sale of the
Medical Office Building on a going concern basis.
In general, the proposed sale and settlement allowed the bankruptcy
estate to realize sufficient funds to pay the secured debt of
Arbitra and certain ad valorem real property taxes at closing, with
additional funds being available to later make a very substantial
distribution to allowed secured claims, allowed unsecured priority
claims and allowed general unsecured claims, pursuant to the Plan.
The Bankruptcy Court after hearing, approved the sale by a final
nonappealable order, and the sale has closed. The Debtor holds
certain net sales proceeds together with other funds and certain
claims and causes of action, which are proposed to be administered
as set forth in the Plan.
The Plan provides that the Debtor will be vest with certain
bankruptcy estate assets (including the Net Sale Proceeds) that
will be distributed to holders of Allowed Claims, by the Debtor
post-confirmation. The Plan provides that holders of Allowed
Administrative Claims and Allowed Priority Claims will be paid in
full by the Debtor post-confirmation on the Administrative and
Priority Claims Distribution Date (which is the date occurring as
soon as practical after the Effective Date) or the date when such
claim is allowed, or such other date as the Debtor and the claimant
may agree.
The Plan also provides that holders of Allowed Miscellaneous
Secured Claims, in the sole discretion of the Debtor post
confirmation, will receive either the proceeds of the Collateral
securing such Claimant's Allowed Secured Claim (up to the amount of
Claimant's Allowed Secured Claim) after satisfaction in full of all
superior liens or the Collateral securing such Claimant's Allowed
Secured Claim in full and final satisfaction of such Claim. The
Plan further provides that Allowed General Unsecured Claims will
receive payment of their Allowed Claims from Available Cash on one
or more Distribution Dates. It is presently anticipated that such
holder of Allowed General Unsecured Claims will receive payment of
the face dollar amount of such Allowed Claim.
Finally, the Plan provides that all Equity Interests will be
retained and not canceled, however holders of such Equity Interests
shall receive no Distribution under the Plan. The Debtor will be
vested with additional assets (primarily, causes of action) which
may facilitate a distribution of future profit to Equity Interest
in the future depending upon the success of such causes of action.
Future success of such litigation is presently unknown.
Class 3 consists of General Unsecured Claims. Class 3 Claims are
impaired under the Plan. The Debtor/Post-Confirmation Debtor shall
distribute Available Cash to holders of Allowed Claims in Class 3
and/or the Disputed Claims Reserve, if applicable, on one or more
Distribution Date(s). The Debtor shall have the right, but not the
obligation, to make interim distributions to holders of Allowed
General Unsecured Claims in Class 3 from Available Cash on such
Distribution Dates as the Debtor/Post-Confirmation Debtor
determines appropriate. It is presently anticipated based upon the
present Allowed claims that Class 3 General Unsecured Claims will
be paid the face dollar amounts of such allowed general unsecured
claims in a single, final distribution as soon as practical after
the Effective Date. According to its Schedules and currently
allowed proof of claim, the Debtor estimates its potential
liability for Class 3 Claims to be approximately $1,500,000.00.
Class 4 Equity Interests are impaired. Equity Interests will not
receive a distribution under the Plan. Equity Interest shall retain
their equity interest in the Debtor but shall not receive any
distributions of profit, if any, until all other Claims and Classes
of Claims are paid according to the Plan. Any such future
distributions of profit, if any, are most likely contingent on the
PostConfirmation Debtor successfully prosecuting certain Causes of
Action post-confirmation. Class 4 Equity Interest is comprised
solely of insiders. Class 4 Equity Interest is deemed to reject the
Plan and as such is not entitled to vote.
The transactions contemplated by the Plan shall be approved and
effective as of the Effective Date, without the need for any
further state or local regulatory approvals or approvals by any
non-Debtor party, and without any requirement for further action by
the Debtor, its managers, members, or any other person or entity.
All assets of the Debtor and its estate will vest in the Post
Confirmation Debtor on the Effective Date, including without
limitation the Causes of Action, Rights of Action and the Net Sales
Proceeds free and clear of any and all liens, claims, interest and
encumbrances including but not limited to any and all ad valorem
tax liens. The Post-Confirmation Debtor, shall be the sole owner of
all such property, Claims or interests and assets of the Debtor and
its estate (including without limitation, the Causes of Action,
Rights of Action and the Net Sales Proceeds) of every kind subject
only to its obligations under the Plan.
The Plan proposed by the Debtor provides for the liquidation of the
Debtor's remaining assets as appropriate and a distribution of cash
to creditors in accordance with the priority scheme of the
Bankruptcy Code and terms of the Plan. The Plan also provides for
appropriate reserves for payment of Miscellaneous Secured Claims
and administrative and priority claims and mechanisms for
consummation of distributions to holders of Allowed Claims entitled
to them. Thus, the Debtor believes in its business judgment that,
following consummation of the Plan, there will be no need for
further liquidation or reorganization.
The Bankruptcy Court has set the Confirmation Hearing for June 27,
2022, at 2:30 p.m.
The Voting Deadline to accept or reject the Plan is June 23, 2022.
All Ballots must be received by June 23, 2022.
A full-text copy of the Disclosure Statement dated May 19, 2022, is
available at https://bit.ly/3wxRQp3 from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Steven D. Shurn TBN: 24013507
sshurn@hwallp.com
HUGHES WATTERS ASKANASE, L.L.P
1201 Louisiana, St., 28th Floor
Houston, Texas 77002
Telephone: (713) 759-0818
Facsimile: (713) 759-6834
Cell Phone: (713) 410-2139
About 1917 Heights Hospital
1917 Heights Hospital, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-31811) on June 1,
2021. In its petition, the Debtor listed $100 million to $500
million in assets and $10 million to $50 million in liabilities.
Dr. Dharmesh Patel, manager, signed the petition.
Judge Eduardo V. Rodriguez oversees the case.
Hughes Watters Askanase, LLP, is the Debtor's bankruptcy counsel.
2999TC ACQUISITIONS: Court Confirms Amended Plan of Reorganization
------------------------------------------------------------------
Judge Harlin DeWayne Hale has entered an order confirming the Third
Amended Plan of Reorganization of 2999TC Acquisitions, LLC
The Debtor shall pay the United States Trustee quarterly fees until
the Clerk of the Court closes the case and shall file quarterly
reports with the United States Trustee in the form required by the
Office of the United States Trustee until the case is closed.
Holders of Allowed Administrative Claims will be paid in full.
Holders of Allowed Priority Claims will be paid pursuant to Section
1129.
The Plan is feasible. Confirmation of the Plan is not likely to be
followed by the liquidation of, or need for further financial
reorganization of, the Debtor. The Plan does contemplate that the
Debtor's property and rights in property will be conveyed following
confirmation to a new entity that will obtain the required
financing to payoff HNGH. Either such new financing or the
Debtor's existing ownership will payoff any remaining creditors in
the case as called for by the Plan, including Allowed Unsecured
Claims, Allowed Administrative Claims and fees of the United States
Trustee.
Attorneys for the Debtor:
Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, Texas 75202
Telephone: (972) 503-4033
About 2999TC Acquisitions
Dallas, Texas-based 2999TC Acquisitions, LLC filed its voluntary
petition for Chapter 11 protection (Bankr. N.D. Texas Case No.
21-31954) on Oct. 29, 2021, listing up to $100 million in assets
and up to $50 million in liabilities. Tim Barton, president of
2999TC Acquisitions, signed the petition. Judge Harlin Dewayne Hale
oversees the case. Joyce W. Lindauer, Esq., serves as the Debtor's
legal counsel.
942 PENN RR: Case Summary & Nine Unsecured Creditors
----------------------------------------------------
Debtor: 942 Penn RR, LLC
942 Pennsylvania Avenue
Miami Beach, FL 33139
Business Description: 942 Penn RR is the fee simple owner of a
real property also known as 942
Pennsylvania, Avenue, Miami Beach, FL
valued at $1.62 million.
Chapter 11 Petition Date: May 23, 2022
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 22-14038
Judge: Hon. Robert A. Mark
Debtor's Counsel: Mark S. Roher, Esq.
LAW OFFICE OF MARK S. ROHER, P.A.
1806 N. Flamingo Road, Suite 300
Pembroke Pines, FL 33028
Tel: (954) 353-2200
E-mail: mroher@markroherlaw.com
Total Assets: $1,617,630
Total Liabilities: $27,179,541
The petition was signed by Raziel Ofer as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/37XRLUQ/942_Penn_RR_LLC__flsbke-22-14038__0001.0.pdf?mcid=tGE4TAMA
ABDOUN ESTATE: Unsecureds Will be Paid From Available Funds
-----------------------------------------------------------
Abdoun Estate Holdings, LLC, submitted a Second Amended Combined
Plan and Disclosure Statement.
Under the Plan, Class 3 General Unsecured Claims total $212,824.
The Debtor intends to pay these claims (to the extent they are an
Allowed claim) on a pro-rata basis to the extent funds are
available from sale and/or litigation proceeds. Payments shall be
made within 30 days of receipt of sale/litigation proceeds by the
Debtor and beginning 30 days following the Effective Date. Class 3
is impaired.
The Plan will be funded from sale of the Property and claims and/or
insurance proceeds.
The Debtor intends to sell its Property located in 26250
Northwestern Highway, Southfield, MI 48076, in accordance with its
agreement with Red Oak , with the net proceeds of such sale
committed to the Plan. Should Debtor be unable to timely close a
sale of the Property, the Property will be turned over to Red Oak
(which will assume all associated liabilities), and no proceeds
shall be applied to the Plan. Debtor also owns several claims
against third parties, which it will continue to prosecute for the
benefit of the estate, with proceeds committed to the Plan.
Attorneys for the Abdoun Estate Holdings, LLC:
Anthony J. Miller, Esq.
OSIPOV BIGELMAN P.C.
20700 Civic Center Drive, Suite 420
Southfield, MI 48076
Tel: (248) 663-1804
Fax: (248) 663-1801
E-mail: am@osbig.com
A copy of the Disclosure Statement dated May 18, 2022, is available
at https://bit.ly/3t9A3Th from PacerMonitor.com.
About Abdoun Estate Holdings
Abdoun Estate Holdings, LLC, is a single asset real estate debtor
(as defined in 11 U.S.C. Section 101(51B)) based in Southfield,
Mich.
Abdoun Estate Holdings filed its voluntary petition for Chapter 11
protection (Bankr. E.D. Mich. Case No. 21-48063) on Oct. 11, 2021,
listing as much as $10 million in both assets and liabilities.
Ahmad Abulabon, managing member of Abdoun Estate Holdings, signed
the petition.
Judge Thomas J. Tucker oversees the case.
The Debtor tapped Yuliy Osipov, Esq., at Osipov Bigelman, P.C., as
its bankruptcy counsel. The Blum Law Firm and Frasco Caponigro
Wineman Scheible Hauser & Luttmann, PLLC, serve as the Debtor's
special counsel.
ABRAXAS PETROLEUM: All Three Proposals Passed at Annual Meeting
---------------------------------------------------------------
At the Annual Meeting of Stockholders of Abraxas Petroleum
Corporation, the stockholders:
(a) elected Brian L. Melton, Damon Putman and Daniel Baddeloo as
directors for a term of three years to hold office until the
expiration of his term in 2025, or until a successor has been
elected and duly qualified;
(b) ratified the appointment of Akin, Doeherty, Klein & Feuge,
P.C. as the Company's independent registered public accounting firm
for the year ended Dec. 31, 2022; and
(c) approved, on an advisory vote, a resolution on executive
compensation.
About Abraxas
San Antonio, TX-based Abraxas Petroleum Corporation --
www.abraxaspetroleum.com -- is an independent energy company
primarily engaged in the acquisition, exploration, development and
production of oil and gas.
Abraxas Petroleum reported a net loss of $44.57 million for the
year ended Dec. 31, 2021, a net loss of $184.52 million for the
year ended Dec. 31, 2020, and a net loss of $65 million for the
year ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had
$130.48 million in total assets, $247.06 million in total
liabilities, and $116.59 million in total stockholders' deficit.
ABRAXAS PETROLEUM: Posts $40.1 Million Net Income in First Quarter
------------------------------------------------------------------
Abraxas Petroleum Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
net income of $40.13 million on $12.19 million of total revenue for
the three months ended March 31, 2022, compared to a net loss of
$23.69 million on $16.67 million of total revenue for the three
months ended March 31, 2021.
As of March 31, 2022, the Company had $78.13 million in total
assets, $17.30 million in total liabilities, and $60.83 million in
total stockholders' equity.
Abraxas said "We believe we could access capital to resume
development of our assets. We believe that our high quality asset
base, high degree of operational control and inventory of drilling
projects position us for future growth. At December 31, 2021, we
operated properties accounting for virtually all of our PV-10,
giving us substantial control over the timing and incurrence of
operating and capital expenditures. We have identified numerous
additional drilling locations on our existing leaseholds, the
successful development of which we believe could significantly
increase our production and proved reserves.
"Our future oil and gas production, and therefore our success, is
highly dependent upon our ability to find, acquire and develop
additional reserves that are profitable to produce. The rate of
production from our oil and gas properties and our proved reserves
will decline as our reserves are produced unless we acquire
additional properties containing proved reserves, conduct
successful development and exploration activities or, through
engineering studies, identify additional behind-pipe zones or
secondary recovery reserves. We cannot assure you that we will
have any significant exploration and development activities in the
near term or that they will result in increases in our proved
reserves. If our proved reserves decline in the future, our
production may also decline and, consequently, our cash flow from
operations will decline. If cash flow declines and we have no
access to additional capital, we will be unable to acquire or
develop additional reserves or develop our existing undeveloped
reserves, in which case our results of operations and financial
condition will be adversely affected. Additionally, due to our lack
of liquidity, all of our proved undeveloped reserves have been
removed from our books."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000867665/000143774922012526/axas20220331_10q.htm
About Abraxas
San Antonio, TX-based Abraxas Petroleum Corporation --
www.abraxaspetroleum.com -- is an independent energy company
primarily engaged in the acquisition, exploration, development and
production of oil and gas.
Abraxas Petroleum reported a net loss of $44.57 million for the
year ended Dec. 31, 2021, a net loss of $184.52 million for the
year ended Dec. 31, 2020, and a net loss of $65 million for the
year ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had
$130.48 million in total assets, $247.06 million in total
liabilities, and $116.59 million in total stockholders' deficit.
ACRO BIOMEDICAL: Incurs $3.9 Million Net Loss in First Quarter
--------------------------------------------------------------
Acro Biomedical Co., Ltd. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.93 million on $298,500 of revenues for the three months ended
March 31, 2022, compared to a net loss of $59,494 on $99,500 of
revenues for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $728,594 in total assets,
$85,375 in total liabilities, and $643,219 in total stockholders'
equity.
Acro Biomedical said "We had limited gross profit and incurred a
loss from operations for the three months ended March 31, 2022 and
for the past few years. These factors, among others, raise
substantial doubt about our ability to continue as a going concern.
"We propose to fund operations through sales of products and equity
financing arrangements. However, because of the lack of sales and
the absence of any active trading market for our common stock, our
financial condition and our lack of an operating history, including
our dependence upon a limited number of customers, we may not be
able to raise funds for capital expenditures, working capital and
other cash requirements and will have to rely on advances from a
minority stockholder, who is also an unpaid consultant, and our
officer. If we cannot generate revenue from its products, it may
not be able to continue in its business."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1622996/000164033422001037/acro_10q.htm
About Acro Biomedical
Acro Biomedical Co., Ltd. has been engaged in the business of
developing and marketing nutritional products that promote wellness
and a healthy lifestyle. The Company's business to date has
involved the purchase of products from three suppliers in the
Republic of China. The Company sells product in bulk to companies
who may use its products as ingredients in their products or sell
the products they purchase from the Company to their own
customers.
Acro Biomedical reported net loss of $7.70 million for the year
ended Dec. 31, 2021, compared to a net loss of $117,453 for the
year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$761,077 in total assets, $117,370 in total liabilities, and
$643,707 in total stockholders' equity.
Hackensack, New Jersey-based Prager Metis CPAs, LLC, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 15, 2022, citing that the Company had limited
cash as of Dec. 31, 2021, had limited gross profit and incurred a
loss from its operations for the year ended Dec. 31, 2021 and past
few years. These circumstances, among others, raise substantial
doubt about the Company's ability to continue as a going concern.
ADAMIS PHARMACEUTICALS: Reports $10.4M Net Loss for First Quarter
-----------------------------------------------------------------
Adamis Pharmaceuticals Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss applicable to common stock of $10.35 million on $1.15
million of net revenue for the three months ended March 31, 2022,
compared to a net loss applicable to common stock of $15.38 million
on $1.39 million of net revenue for the three months ended March
31, 2021.
As of March 31, 2022, the Company had $30.55 million in total
assets, $14.65 million in total liabilities, and $15.90 million in
total stockholders' equity.
Cash and cash equivalents at March 31, 2022, totaled approximately
$17.8 million. For this year, the Company expects to receive
additional proceeds resulting from amounts payable to it pursuant
to its sale of certain USC assets to Fagron and from the
disposition of the remaining USC assets which includes the land,
the building, the machinery and the equipment.
Adamis said "The Company has significant operating cash flow
deficiencies. Additionally, the Company will need additional
funding in the future to help support commercialization of its
products and conduct the clinical and regulatory activities
relating to the Company's product candidates, satisfy existing and
future obligations and liabilities, and otherwise support the
Company's intended business activities and working capital needs.
The preceding conditions raise substantial doubt about the
Company's ability to continue as a going concern. The condensed
consolidated financial statements for the three months ended March
31, 2022, were prepared under the assumption that we would continue
our operations as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities during
the normal course of business. Our unaudited condensed
consolidated financial statements do not include any adjustments
that may result from the outcome of this uncertainty. Management's
plans include attempting to secure additional required funding
through equity or debt financings, sales or out-licensing of
intellectual property or other assets, products, product candidates
or technologies, seeking partnerships with other pharmaceutical
companies or third parties to co-develop and fund research and
development efforts, or similar transactions, and through revenues
from existing agreements and sales of prescription compounded
formulations. There is no assurance that the Company will be
successful in obtaining the necessary funding to meet its business
objectives. In addition, a severe or prolonged economic downturn,
political disruption or pandemic, such as the COVID-19 pandemic,
could result in a variety of risks to our business, including our
ability to raise capital when needed on acceptable terms, if at
all."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/887247/000138713122006207/admp-10q_033122.htm
About Adamis Pharmaceuticals
Adamis Pharmaceuticals Corporation --
http://www.adamispharmaceuticals.com-- is a specialty
biopharmaceutical company primarily focused on developing and
commercializing products in various therapeutic areas, including
allergy, opioid overdose, respiratory and inflammatory disease.
Adamis reported a net loss applicable to common stock of $45.83
million for the year ended Dec. 31, 2021, compared to a net loss
applicable to common stock of $49.39 million for the year ended
Dec. 31, 2020.
San Diego, California-based BDO USA, LLP, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated March 31, 2022, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
AE OPCO: Wins Interim Cash Collateral Access
--------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized AE OPCO III, LLC to use cash collateral on an
interim basis and provide adequate protection.
The Debtor is authorized to use cash collateral to pay: (a) amounts
expressly authorized by the Court, (b) the current and necessary
expenses set forth in the budgets, plus an amount not be exceed 10%
for each line item; and (c) additional amounts as may be expressly
approved in writing by California Bank of Commerce.
The Debtor is authorized to pay its President, Jack Hall, his
salary and benefits pursuant to a separate Court order.
Each creditor or other party with a security interest or other
interest in cash collateral shall have a perfected post-petition
lien or interest against cash collateral to the same extent and
with the same validity and priority as its prepetition lien or
interest, without the need to file or execute any document as may
otherwise be required under applicable non bankruptcy law.
As adequate protection, the Debtor will provide the Secured
Creditor with the following:
a. A post-petition replacement lien or interest in cash
collateral equal in validity and dignity as it existed
pre-petition.
b. Proof of insurance upon request of same.
c. Commencing on April 5, 2022 and continuing on the 5th day
of each month thereafter, interest only payments at the rate
specified in the loan documents.
A continued preliminary hearing on the matter is scheduled for July
28, 2022 at 3 p.m.
A copy of the order and the Debtor's budget for the period from
April to September 2022 is available at https://bit.ly/3yL0MsR from
PacerMonitor.com.
The Debtor projects $12,642,950 in total collections and
$13,337,915 in total expenses for the period.
About AE OPCO III, LLC
AE OPCO III, LLC owns and operates an aerospace composite
manufacturing facility. AE OPCO III provides design services,
testing, assembling and repairs for commercial and governmental
customers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01186) on March 25,
2022. In the petition signed by Jack Hall, president, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge Catherine Peek McEwen oversees the case.
Alberto F. Gomez, Jr., Esq. at Johnson, Pope, Bokor, Ruppel and
Burns, LLP is the Debtor's counsel.
AEMETIS INC: Incurs $18.3 Million Net Loss in First Quarter
-----------------------------------------------------------
Aemetis, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $18.29
million on $52.05 million of revenues for the three months ended
March 31, 2022, compared to a net loss of $18.11 million on $42.81
million of revenues for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $166.49 million in total
assets, $62.73 million in total current liabilities, $232.35
million in total long-term liabilities, and a total stockholders'
deficit of $128.59 million.
Aemetis said "As a result of negative capital and negative
operating results, and collateralization of substantially all of
the company assets, the Company has been reliant on its senior
secured lender to provide additional funding and has been required
to remit substantially all excess cash from operations to the
senior secured lender. In order to meet its obligations during the
next twelve months, the Company will need to either refinance the
Company's debt or receive the continued cooperation of its senior
lender. This dependence on the senior lender raises substantial
doubt about the Company's ability to continue as a going concern.
The Company plans to pursue the following strategies to improve the
course of the business.
"For the Keyes Plant, we plan to operate the plant and continue to
improve financial performance by adopting new technologies or
process changes that allow for energy efficiency, cost reduction or
revenue enhancements, execute upon awarded grants that improve
energy and operational efficiencies resulting in lower cost, lower
carbon demands and overall margin improvement.
"For the ABGL biogas project, we plan to operate the biogas
digesters to capture and monetize biogas as well as continue to
build new dairy digesters and extend the existing pipeline in order
to capture the higher carbon credits available in California.
Funding for continued construction is based upon obtaining
government guaranteed loans and executing on existing and new state
grant programs.
"For the Riverbank project, we plan to raise the funds necessary to
construct and operate the Carbon Zero 1 plant using loan guarantees
and public debt financings based upon the licensed technology that
generate federal and state carbon credits available for ultra-low
carbon fuels utilizing lower cost, non-food advanced feedstocks to
significantly increase margins.
"For the Kakinada Plant, we plan to develop sales channels for
domestic products as the costs of feedstock normalize against the
price of diesel, as recently announced governmental incentives take
effect to promote the blending of biodiesel, and as feedstocks such
as refined animal tallow are used domestically and exported.
Additionally, we are in the process of obtaining approval to export
refined animal tallow and biodiesel produced using animal tallow
into international markets as the use of refined animal tallow
received approval from the Pollution Control Board of India for
production of biodiesel. The acquisition of land and equipment to
refine crude animal tallow is underway.
"In addition to the above we plan to continue to locate funding for
existing and new business opportunities through a combination of
working with our senior lender, restructuring existing loan
agreements, selling equity through the ATM and otherwise, selling
the current EB-5 Phase II offering, or by vendor financing
arrangements."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/738214/000165495422006779/amts_10q.htm
About Aemetis
Headquartered in Cupertino, California, Aemetis, Inc. --
http://www.aemetis.com-- is an international renewable natural
gas, renewable fuels and byproducts company focused on the
acquisition, development and commercialization of innovative
technologies that replace traditional petroleum-based products.
The Company operates in two reportable geographic segments: "North
America" and "India."
Aemetis reported a net loss of $47.15 million for the year ended
Dec. 31, 2021, compared to a net loss of $36.66 million for the
year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$160.83 million in total assets, $65.33 million in total current
liabilities, $215.74 million in total long term liabilities, and a
total stockholders' deficit of $120.24 million.
AIKIDO PHARMA: Reports $3.5 Million Net Loss in First Quarter
-------------------------------------------------------------
Aikido Pharma Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.54 million for the three months ended March 31, 2022,
compared to a net loss of $3.96 million for the three months ended
March 31, 2021.
As of March 31, 2022, the Company had $117.95 million in total
assets, $895,000 in total liabilities, $11 million in Series O
redeemable convertible preferred stock, $11 million in Series P
redeemable convertible preferred stock, and $95.05 million in total
stockholders' equity.
The Company continues to incur ongoing administrative and other
expenses, including public company expenses, in excess of
corresponding (non-financing related) revenue. While the Company
continues to implement its business strategy, it intends to finance
its activities through managing current cash on hand from the
Company's past debt and equity offerings.
Based upon projected cash flow requirements, the Company has
adequate cash to fund its operations for at least the next twelve
months from the date of the issuance of these consolidated
financial statements.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/12239/000121390022027192/f10q0322_aikidopharma.htm
About AIkido Pharma
Headquartered in New York, NY, AIkido Pharma Inc. fka Spherix
Incorporated -- http://www.spherix.com-- was initially formed in
1967 and is currently a biotechnology company seeking to develop
small-molecule anti-cancer therapeutics. The Company's activities
generally include the acquisition and development of technology
through internal or external research and development. In
addition, the Company seeks to acquire existing rights to
intellectual property through the acquisition of already issued
patents and pending patent applications, both in the United States
and abroad. The Company may alone, or in conjunction with others,
develop products and processes associated with technology
development. Recently, the Company has invested in and helped
develop technology with Hoth Therapeutics, Inc., DatChat, Inc. and
with its recent asset acquisition with CBM BioPharma, Inc. in
December 2019.
Aikido reported a net loss of $7.17 million for the year ended Dec.
31, 2021, compared to a net loss of $12.34 million for the year
ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $102.66
million in total assets, $1.06 million in total liabilities, and
$101.60 million in total stockholders' equity.
AINOS INC: Incurs $2.1 Million Net Loss in First Quarter
--------------------------------------------------------
Ainos, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $2.10
million on $87,200 of revenues for the three months ended March 31,
2022, compared to a net loss of $534,006 on $2,121 of revenues for
the three months ended March 31, 2021.
As of March 31, 2022, the Company had $40.74 million in total
assets, $32.65 million in total liabilities, and $8.08 million in
total stockholders' equity.
As of March 31, 2022 and Dec. 31, 2021, the Company had available
cash of $1,871,349 and $1,751,499, respectively.
Ainos said "The continuing operations of the Company and the
recoverability of the carrying value of assets is dependent upon
the ability of the Company to obtain necessary financing to fund
its working capital requirements, and upon future profitable
operations.
"There can be no assurance that capital will be available as
necessary to meet the Company's working capital requirements or, if
the capital is available, that it will be on terms acceptable to
the Company. The issuances of additional equity securities by the
Company may result in dilution in the equity interests of its
current stockholders. Obtaining commercial loans, assuming those
loans would be available, will increase the Company's liabilities
and future cash commitments. If the Company is unable to obtain
financing in the amounts and on terms deemed acceptable, the
business and future success may be adversely affected and the
Company may cease operations. These factors raise substantial
doubt regarding our ability to continue as a going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1014763/000165495422006967/aimd_10k.htm
About Ainos
Ainos, Inc., formerly known as Amarillo Biosciences, Inc., is a
diversified healthcare company engaged in the research and
development and sales and marketing of pharmaceutical and biotech
products. The Company is engaged in developing medical
technologies for point-of-care testing and safe and novel medical
treatment for a broad range of disease indications. The Company is
a Texas corporation incorporated in 1984.
Ainos reported a net loss of $3.89 million for the year ended Dec.
31, 2021, compared to a net loss of $1.45 million for the year
ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $40.82
million in total assets, $30.63 million in total liabilities, and
$10.20 million in total stockholders' equity.
ALL FOR ONE: Incurs $3.5 Million Net Loss in Second Quarter
-----------------------------------------------------------
All For One Media Corp. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.51 million on $1,170 of revenues for the three months ended
March 31, 2022, compared to net income of $3.87 million on $2,351
of revenues for the three months ended March 31, 2021.
For the six months ended March 31, 2022, the Company reported net
income of $1.84 million on $3,483 of revenues compared to net
income of $2.58 million on $4,761 of revenues for the six months
ended March 31, 2021.
As of March 31, 2022, the Company had $49,668 in total assets,
$16.10 million in total current liabilities, and a total
stockholders' deficit of $16.06 million.
The Company had an accumulated (deficit) of $(25,722,681) and
working capital (deficit) of $(16,055,151) as of March 31, 2022.
As of March 31, 2022, the Company had $1,069,921 of convertible
notes and $430,000 of notes payable that are currently in default
for nonpayment. The Company said these matters raise substantial
doubt about the Company's ability to continue as a going concern
for twelve months from the issuance date of this report.
All For One said "The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the
future such as selling the completed Movie and/or to obtain the
necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when they come
due. The Company's ability to raise additional capital through the
future issuances of common stock is unknown. The obtainment of
additional financing, the successful development of the Company's
contemplated plan of operations, and its transition, ultimately, to
the attainment of profitable operations are necessary for the
Company to continue operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1286459/000147793222003417/afom_10q.htm
About All For One Media
All for One Media Corp., incorporated in the State of Utah on March
2, 2004, is a media and entertainment company focused on creating,
launching, and marketing original pop music groups commonly
referred to as "boy bands" and "girl groups." The Company's former
operations were in the business of acquiring, training, and
reselling horses with an emphasis in the purchase of thoroughbred
weanlings or yearlings that were resold as juveniles.
All For One reported a net loss of $3.12 million for the year ended
Sept. 30, 2021, compared to a net loss of $8.74 million for the
year ended Sept. 30, 2020. As of Sept. 30, 2021, the Company had
$122,622 in total assets, $18.61 million in total current
liabilities, and a total stockholders' deficit of $18.49 million.
Boca Raton, Florida-based Salberg & Company, P.A., the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Dec. 17, 2021, citing that the Company has a net loss
and cash used in operations of $3,115,470 and $660,935,
respectively, for the year ended Sept. 30, 2021. Additionally, the
Company had an accumulated deficit of $27,568,913 and working
capital deficit of $18,491,425 as of Sept. 30, 2021. These matters
raise substantial doubt about the Company's ability to continue as
a going concern.
AMERICANN INC: Posts $24K Net Income in Second Quarter
------------------------------------------------------
Americann, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing net income of $24,240
on $667,366 of rental income for the three months ended March 31,
2022, compared to a net loss of $304,092 on $437,344 of rental
income for the three months ended March 31, 2021.
For the six months ended March 31, 2022, the Company reported a net
loss of $508,788 on $1.32 million of rental income compared to a
net loss of $806,376 on $708,929 of rental income for the six
months ended March 31, 2021.
As of March 31, 2022, the Company had $15.06 million in total
assets, $9.60 million in total liabilities, and $5.47 million in
total stockholders' equity.
The Company had an accumulated deficit of $20,094,233 and
$19,585,445 at March 31, 2022 and Sept. 30, 2021, respectively.
"While the Company is attempting to increase operations and
generate additional revenues, the Company's cash position may not
be significant enough to support the Company's daily operations.
Management intends to raise additional funds through the sale of
its securities," Americann said.
"Management believes that the actions presently being taken to
further implement its business plan and generate additional
revenues provide the opportunity for the Company to continue as a
going concern. While the Company believes in the viability of its
strategy to generate additional revenues and in its ability to
raise additional funds, there can be no assurances to that effect.
The ability of the Company to continue as a going concern is
dependent upon the Company's ability to further implement its
business plan and generate additional revenues," the Company said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1508348/000143774922012606/acan20220331_10q.htm
About AmeriCann
AmeriCann (OTCQB:ACAN) is a specialized cannabis company that is
developing state-of-the-art product manufacturing and greenhouse
cultivation facilities. Its business plan is based on the
continued growth of the regulated marijuana market in the United
States.
Americann reported a net loss of $862,893 for the year ended Sept.
30, 2021, a net loss of $709,343 for the year ended Sept. 30, 2020,
and a net loss of $4.90 million for the year ended Sept. 30, 2019.
As of Dec. 31, 2021, the Company had $15.02 million in total
assets, $9.58 million in total liabilities, and $5.44 million in
total stockholders' equity.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
Dec. 3, 2021, citing that the Company has suffered recurring losses
from operations and has an accumulated deficit that raises
substantial doubt about its ability to continue as a going concern.
ANIMO INGLEWOOD: Fitch Affirms 'BB+' Rating on $7.09MM School Bonds
-------------------------------------------------------------------
Fitch Ratings has affirmed the following revenue bonds issued by
the California Statewide Communities Development Authority (CA) on
behalf of Green Dot Public Schools, Animo Inglewood Charter High
School (AICHS) Project at 'BB+':
-- $7,095,000 charter school revenue bonds series 20011A.
In addition, Fitch has affirmed AICHS's Issuer Default Rating (IDR)
at 'BB+'.
The Rating Outlook on the revenue bond and IDR is Stable.
SECURITY
The bonds are payable from pledged revenues of AICHS, including
local control funding formula (LCFF) funds from the state of
California. A cash-funded debt service reserve is equal to maximum
annual debt service (MADS).
ANALYTICAL CONCLUSION
The 'BB+' IDR and bond rating reflect the school's elevated
leverage metrics given its midrange revenue defensibility
characteristics and operating risk assessments.
KEY RATING DRIVERS
Revenue Defensibility -- Midrange: AICHS's midrange revenue
defensibility is supported by its solid academic performance, a
stable state funding environment, and history of steady and
resilient enrollment (around 630 in recent years). California's
LCFF provides a robust framework for per-pupil funding, which Fitch
expects to result in moderate, if variable, revenue growth.
AICHS's stable enrollment is further supported by a waitlist, which
declined to 152 (24% of enrollment) in fiscal 2022, as management
focused on sustaining active enrollment through the pandemic.
Management is now building a strategy to bring the waitlist count
back up to pre-pandemic levels (around 50%). The school has some
flexibility to enroll additional students up to a chartered maximum
of 650, but like most charter schools, lacks control over tuition
rate setting.
Operating Risk -- Midrange: The school has midrange flexibility to
vary cost with enrollment shifts, reflected in consistent modest
surpluses throughout the pandemic and a rebound of operations to
historical levels in fiscal 2021, restoring capacity to respond to
potential future volatility. Fitch considers AICHS's carrying costs
for debt service and pension contributions to be low at $1.2
million (12.3% of fiscal 2021 expenditures).
Financial Profile -- 'bb': The school's 'bb' financial profile
assessment reflects AICHS's solid operating margins and cash flow
generation, however the school is limited by elevated leverage
metrics that have been maintained over the past several years. Net
debt (including Fitch-calculated net pension liabilities) to cash
flow available for debt service (CFADS) has fluctuated over the
last five years, but has remained in the 'bb' assessment range.
Fitch estimates the school's NPL for CalPERS and CalSTRS by
allocating a portion of each plan's Fitch-adjusted net liability
using a ratio of AICHS's annual contributions relative to the total
contribution for each plan. Fitch does not incorporate cash held by
GDPSC in its analysis of net debt. As a result, net debt to CFADS
remains elevated at over 6x through Fitch's stress case, but solid
cash flow may result in sustained leverage at the lower end of the
6x-12x 'bb' assessment range.
Asymmetric Additional Risk Considerations: None.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A sustained decline in Net Debt to CFADS below 6.0x while
maintaining sustainable operating margins and cash flow
available for debt service.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A decline in per-pupil funding that is more significant than
what Fitch currently anticipates in its stress case scenario,
without additional offsetting expenditure measures taken by
the school;
-- A sustained decline in enrollment that reduce revenues and
weakens the financial condition of the school;
-- An increase in net debt to CFADS above 12.0x in Fitch's stress
case;
-- The loss of the school's charter.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
CREDIT PROFILE
Animo Inglewood is a charter high school located in Inglewood, CA.
Certified in 2001 and initiating operations in 2002 with 140
freshman students, AICHS has received three charter renewals since
creation, most recently in 2020 for a full five-year term. AICHS's
history of renewals and strong academic track record partially
offset the renewal risk inherent in any charter school. AICHS's
charter was renewed in the of fall 2019 for another 5-year term
beginning June 30th, 2020.
GDPSC is a non-profit charter school management organization
serving over 11,000 students across a network of 21 schools in CA
in the greater Los Angeles area. In exchange for a shared services
fee, AICHS has access to GDPSC's vendor contracts, academic and
financial management support, and fundraising capabilities.
During the current academic year, AICHS returned to in-person
academic services following a period of distance learning and
hybrid academic models. AICHS ended fiscal 2021 favorably, with a
surplus of approximately $1.2 million. The school benefited from
additional state and federal funding, which largely offset
additional expenses related to the return to full staffing and
in-person instruction as well as some pandemic-related spending.
The school's fiscal 2022 projects a surplus of approximately
$200,000 and includes the use of additional federal and state aid
monies to offset expenditure growth. As of the end of the 3Q2022,
the school projects fiscal 2021 will be in line with or above the
budgeted surplus.
State revenue performance far exceeded expectations in fiscal 2021,
supporting a stable near-term outlook for state per-pupil funding.
California's revenues are driven by personal income and capital
gains taxes from high-income individuals, which have been less
affected by the pandemic than the broader economy. California's
fiscal 2022 budget includes significant additional funding for
schools, including incentives for reopening quickly, additional
summer school funding, more rapid repayment of deferrals and a 3.8%
cost of living adjustment for Local Control Funding Formula for the
2021-2022 school year.
The federal government also provided extraordinary aid to schools
in the state, with $26.4 billion provided across three aid
packages. The largest stimulus measure, the American Rescue Plan of
March 2021, provides $15.3 billion for California schools.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
APPLIED ENERGETICS: Incurs $1.8 Million Net Loss in First Quarter
-----------------------------------------------------------------
Applied Energetics, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.78 million for the three months ended March 31, 2022,
compared to a net loss of $1.09 million for the three months ended
March 31, 2021.
As of March 31, 2022, the Company had $3.75 million in total
assets, $2.01 million in total liabilities, and $1.74 million in
total stockholders' equity.
At March 31, 2022, the company had total current assets of
$2,803,621 and total current liabilities of $1,526,499 resulting in
working capital of $1,277,122. At March 31, 2022, the Company had
$2,551,870 of cash and cash equivalents, a decrease of $1,110,745
from $3,662,615 at Dec. 31, 2021.
During the first three months of 2022, the net cash outflow from
operating activities was $1,262,305. This amount was comprised
primarily of the Company's net loss of $1,781,190, offset by
noncash stock-based compensation expense of $554,877, depreciation
and amortization of $6,209, amortization of future compensation
payable of $208,333, and amortization of prepaid assets of $43,407,
and cash used from changes in assets and liabilities of $293,941
from the increase in prepaid and deposits of $251,767, decrease in
accounts payable of $54,442, and the decrease in accrued expenses
and compensation of $2,261, off set by the net increase in
operating lease liabilities of $14,529.
Investing activities reflected $6,455 for the acquisition of
equipment.
During the first three months of 2022, the net cash inflow from
financing activities was $158,015. This amount was compromised of
$175,435 of proceeds from note payable, offset by $17,420 repayment
on note payable.
Based on the Company's current business plan, it believes its cash
balance as of the date of this report will be sufficient to meet
its anticipated cash requirements for the next twelve months.
However, there can be no assurance that the current business plan
will be achievable.
The Company's existence is dependent upon management's ability to
develop profitable operations. Management is devoting
substantially all of its efforts to developing its business and
raising capital, as needed, and cannot be certain that these
efforts will be successful. Management's business development
efforts may not result in profitable operations. To fund its
research and development and marketing efforts, the Company's
management continues to explore possible financing opportunities
through discussions with investment bankers and private investors.
The Company may not be successful in its effort to secure
additional financing on terms it considers favorable, according to
the SEC filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/879911/000121390022027024/f10q0322_applied.htm
About Applied Energetics
Headquartered in Tucson, Arizona, Applied Energetics, Inc. --
www.aergs.com -- specializes in the development and manufacture of
advanced high-performance lasers, high voltage electronics,
advanced optical systems, and integrated guided energy systems for
prospective defense, aerospace, industrial, and scientific
customers worldwide.
Applied Energetics reported a net loss of $5.42 million for the
year ended Dec. 31, 2021, a net loss of $3.23 million for the year
ended Dec. 31, 2020, and a net loss of $5.56 million for the year
ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had $4.89
million in total assets, $1.92 million in total liabilities, and
$2.97 million in total stockholders' equity.
Las Vegas, NV-based RBSM LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
30, 2022, citing that the company has suffered recurring losses
from operations, will require additional capital to fund its
current operating plan, that raises substantial doubt about the
Company's ability to continue as a going concern.
ARMSTRONG FLOORING: To Layoff 600 Plus Workers If No Buyer
----------------------------------------------------------
Daniel Urie of Penn Live Patriot News reports that a flooring
company that has filed for Chapter 11 bankruptcy and is looking for
a buyer has alerted the state that it would have to lay off more
than 600 people at three locations, if it has to shut down.
Armstrong Flooring Inc. filed the WARN (Worker Adjustment and
Retraining Notification) notice with the Pennsylvania Department of
Labor & Industry on Friday, May 20, 2022, that 606 people would be
permanently laid off at plants at 1067 Dillerville Road in
Lancaster and at 1215 Loop Road in Lancaster and at an office at
1770 Hempstead Road in East Hempfield Township, Lancaster County
between June 17 and July 1, 2022 if it can't find a buyer. The
company's office is about 45 minutes from Harrisburg.
About Armstrong Flooring
Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the
design and manufacture of innovative flooring solutions that
inspire beauty wherever your life happens. Headquartered in
Lancaster, Pennsylvania, Armstrong Flooring continually builds on
its resilient, 150-year legacy by delivering on its mission to
create a stronger future for customers through adaptive and
inventive solutions. The company safely and responsibly operates
seven manufacturing facilities globally, working to provide the
highest levels of service, quality, and innovation to ensure it
remains as strong and vital as its 150-year heritage. On the Web:
http://www.armstrongflooring.com/
Armstrong Flooring Inc. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 22-10426) on May 9, 2022. In the
petition filed by Michel S. Vermette, as president and chief
executive officer, Armstrong Flooring disclosed total assets
amounting to $517,000,000 and estimated total liabilities of
$317,800,000.
The case is assigned to Honorable Bankruptcy Judge Mary F.
Walrath.
The Company is represented in this matter by Skadden, Arps, Slate,
Meagher & Flom LLP as legal advisor, Houlihan Lokey Capital Inc. as
its investment bank, and Riveron RTS, LLC as financial advisor.
Groom Law Group, Chartered is the benefits counsel, Friedman Kaplan
Seiler & Adelman LLP is the conflicts counsel, and Robert A. Weber,
Esq. and Aidan T. Hamilton, Esq. are the efficiency counsels. Epiq
Corporate Restructuring, LLC, is the claims advisor.
ARTHUR GROOM: Case Summary & Eight Unsecured Creditors
------------------------------------------------------
Debtor: Arthur Groom & Co., Inc.
262 East Ridgewood Avenue
Ridgewood, NJ 07450
Chapter 11 Petition Date: May 23, 2022
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 22-14127
Debtor's Counsel: Stephen B. McNally, Esq.
McNALLYLAW, LLC
93 Main Street
Suite 201
Newton, NJ 07860
Tel: 973-300-4260
Fax: 973-300-4264
Email: steve@mcnallylawllc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Arthur Groom, owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/EQEJEDY/Arthur_Groom__Co_Inc__njbke-22-14127__0001.0.pdf?mcid=tGE4TAMA
AVAYA HOLDINGS: S&P Downgrades ICR to 'B-', Outlook Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Avaya
Holdings Corp. and its issue-level rating on its senior secured
debt to 'B-' from 'B+'. S&P's '3' recovery rating on the secured
debt remains unchanged. At the same time, S&P lowered its
issue-level rating on the company's senior unsecured debt to 'CCC'
from 'B-'. S&P's '6' recovery rating on the unsecured debt remains
unchanged.
S&P said, "Our negative outlook reflects the increasing risk that
Avaya will face a liquidity shortfall due to its upcoming debt
maturity ($350 million due June 2023) and our projection for
significant negative cash flow. Therefore, absent a successful
near-term refinancing, we believe there is at least a one-in-three
chance we will lower our ratings on the company.
Avaya's operating performance and credit metrics are trending
weaker. For the three- and six-month periods ended March 31, 2022,
the company generated revenue of $716 million and $1,429 billion,
respectively, which represented declines of about 3.0% and 3.5%
compared with its revenue during the same periods a year earlier.
This decrease was primarily due to a $40 million adverse impact
from Avaya's continuing shift away from its on-premise product and
services and toward its OneCloud portfolio, about a $5 million
revenue loss from knock-on effects associated with the
Russia-Ukraine conflict, and unfavorable foreign-currency
translation. That said, the company reported higher revenue from
its OneCloud subscription offerings and hardware products, which
helped partially offset these headwinds. Avaya's S&P Global
Ratings-adjusted EBITDA margins of about 19.8% were also about 150
basis points (bps) lower than during the same periods the prior
year, primarily because its shift toward a subscription model
resulted in a less-favorable revenue mix but also due to decreased
operating leverage, higher third-party expenses, and increased
freight and material costs stemming from supply chain constraints.
The company generated negative free cash flow of $27 million and
$165 million, respectively, over the three- and six-month periods
due to its lower profitability and the unfavorable working capital
dynamics under its subscription contracts (because its subscription
customers pay cash over time rather than all upfront as under its
licensing model).
Avaya's revised outlook for fiscal year 2022 suggests a
wider-than-expected free cash flow deficit and materially
weaker-than-projected credit metrics. In conjunction with its
second quarter of fiscal-year 22 earnings release, the company
suggested that with an acceleration in its subscription transition
(which S&P expects will lower its point-in-time revenue by $165
million) and about a $60 million revenue loss stemming from the
Russia-Ukraine conflict, its operating performance will decelerate
through the remainder of the year. Specifically, Avaya has
indicated that it now expects full-year revenue of between $2.815
billion and $2.855 billion (indicating a year-over-year decline of
between 5% and 4%), a generally accepted accounting principles
(GAAP) operating margin of about 3%, and negative cash flow from
operations of about 7% of its revenue. In comparison, a quarter
earlier the company's expectations included revenue of $2.975
billion-$3.025 billion, a GAAP operating margin of of between
6%-7%, and cash flow from operations of about 1%. S&P said, "This
also compares with our prior forecast, which assumed a
low-single-digit increase in its revenue, S&P Global
Ratings-adjusted EBITDA margins in the mid-20% area, and reported
operating cash flow of about $50 million in 2022. Under our updated
forecast, we project its revenue declines by about 4%, its S&P
Global Ratings-adjusted EBITDA margins decrease to the
18.75%-19.00% area, and free operating cash flow (FOCF) of -$300
million. Based on these assumptions, we project Avaya's S&P Global
Ratings-adjusted leverage will increase to the 7x area in fiscal
year 2022, which would exceed our 6x downgrade threshold for the
current rating."
Although Avaya appears to be slightly ahead of the OneCloud
annualized recurring revenue (ARR) targets it conveyed under its
subscription transition, its cash flow generation will fall
significantly short of its targets over the coming 12 months.The
company began its transition to a subscription model in 2019 and
reported OneCloud ARR of $191 million and $530 million as of the
ends of fiscal years 2020 and 2021, respectively. However, due to
the corresponding negative effect on its cash collections and
working capital, Avaya has been generating low levels of cash flow
from operations (CFFO), which--along with its increased capital
expenditure (capex) requirements--caused it to generate negative
FOCF in fiscal year 2021. At its December 2021 investor day, Avaya
indicated that it expected its ARR to reach at least $900 million
by the end of fiscal year 2022, at least $1.6 billion by the end of
fiscal year 2023, and more than $2 billion by the end of fiscal
year 2024. The company also conveyed CFFO targets (as a percentage
of its revenue) through fiscal year 2024, including about 1% in
fiscal year 2022, in the mid- to high-single digit percent range in
fiscal year 2023, and about 11%-13% in 2024.
Over the first six months of fiscal year 2022, Avaya continued to
increase its ARR by adding $90 million and $130 million in the
first and second quarters, respectively, which improved its total
ARR to $750 million as of the end of the second quarter. Moreover,
under its updated 2022 outlook, the company expects to achieve
OneCloud ARR of $940 million-$960 million by the end of fiscal year
2022, which puts it slightly ahead of its previous targets.
Nonetheless, Avaya's CFFO to revenue over this same six-month
period was -7.9% (-$113 million). In addition, for the fiscal year
2022 Avaya now it expects its total CFO to revenue to be about -7%
(or roughly -$200 million). Because of the sharp downward revision
to its CFFO expectations relative to the levels of ARR it has
achieved, S&P now thinks there is an elevated risk that it will
fall short of its previous CFO target for fiscal year 2023.
S&P said, "We have reassessed Avaya's business and financial
risk.Our ratings on the company have historically balanced the
inverse relationship between its temporarily weaker profitability
and cash flow generation during its transition to a
subscription-based business model against the long-term benefits
that typically accrue to businesses with higher proportions of ARR.
Based on our expectations that its profitability and cash flow
generation would improve as its transition progressed--and because
we felt its strong cash position (more than $600 million at its
peak) would help temper the near-term risks to its operational
flexibility and liquidity--we placed greater emphasis on the
long-term benefits of the transition. That said, Avaya carried cash
equivalents of roughly $324 million as of the end of the second
quarter of fiscal year 2022, which compares with $354 million as of
the end of the first quarter and $498 million as of the end of its
fiscal year 2021 (ended Sept. 30, 2021). With our forecast for
about $100 million of negative FOCF over the remainder of fiscal
year 2022, we project its cash position will decline further to
approximately $190 million. At these levels, Avaya may have reduced
flexibility to sustain the pace of subscription growth it is
targeting. More importantly, because we now see limited prospects
for positive free cash flow over the next 12 months--and note that
the maturity of its $350 million convertible notes is approaching
in June 2023--we see elevated risk for a liquidity shortfall absent
a refinancing.
"We think Avaya has the ability and is motivated to address its
June 2023 maturity in short order. A key assumption supporting the
current rating is our belief that the company will execute, or
demonstrate credible plans for, refinancing its $350 million
convertible 2.25% senior notes due June 15, 2023, before they
become current. We also believe that Avaya, supported by its cash
balances, the availability under its asset-based lending (ABL)
credit facility, and ability to trim its growth investments, will
likely be able to fund the maturity. Nevertheless, this would leave
it with little liquidity to run its business and hinges on it
performing in line with our forecast. That said, factors beyond the
company's control, such as a deteriorating macroeconomic
environment or political instability, could challenge its ability
to meet our forecast.
"Our negative outlook reflects the increasing risk that Avaya will
face a liquidity shortfall due to its upcoming debt maturity ($350
million due June 2023) and our projection for significant negative
cash flow. Therefore, absent a successful near-term refinancing, we
believe there is at least a one-in-three chance we will lower our
ratings on the company.
"We could consider lowering our ratings on Avaya if it fails to
demonstrate credible plans for refinancing its $350 million senior
unsecured convertible notes before they become current or it
underperforms our revenue, profitability, and cash flow generation
assumptions. Under either scenario, we would likely conclude there
is a growing risk it will be unable to address the maturity and
maintain a liquidity position that supports the level of working
capital investment and capex required to maintain the pace of its
transition to a subscription business model, including achieving
ARR of $1.6 billion by fiscal year 2023 and $2.0 billion by fiscal
year 2024.
"We could revise our outlook on Avaya to stable if it addresses the
maturity of its convertible notes and we believe its operating
prospects and liquidity sources, including its cash position,
availability under its credit facility, and future cash flow
generation prospects, would be sufficient to support its ongoing
transition to a subscription-based revenue model."
ESG credit indicators: E-2; S-2; G-2
AYTU BIOPHARMA: Incurs $53.1 Million Net Loss in Third Quarter
--------------------------------------------------------------
Aytu Biopharma, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $53.07 million on $24.20 million of net product revenue for the
three months ended March 31, 2022, compared to a net loss of $25.46
million on $13.48 million of net product revenue for the three
months ended March 31, 2021.
For the nine months ended March 31, 2022, the Company reported a
net loss of $92.47 million on $69.22 million of net product revenue
compared to a net loss of $39.29 million on $42.15 million of net
product revenue for the same period during the prior year.
As of March 31, 2022, the Company had $168.83 million in total
assets, $107.68 million in total liabilities, and $61.14 million in
total stockholders' equity.
"In our fiscal third quarter and throughout 2022, we continued to
make solid progress in growing our commercial businesses and
developing our product candidate pipeline, and the operational
improvements we've implemented following the Neos acquisition are
being realized," said Josh Disbrow, chief executive officer of Aytu
BioPharma. "We've identified three key areas of strategic focus
for our organization in the near-term โ executing and growing our
base business, enhancing our operational efficiencies, and
preparing to advance a pipeline that addresses significant areas of
medical need โ all of which we believe will drive Aytuโs
long-term growth and success. To date, we've demonstrated growth
of the prescription portfolio with an integrated, streamlined sales
force, and our consumer division posted its highest revenue quarter
in company history. With our ongoing plan to gain manufacturing
efficiencies, we expect to see increased gross margins on our
commercial-stage ADHD products, and, following that, we'll be well
positioned to improve profitability across our commercial business
to help fund our pipeline advancements. We've continued to advance
our AR101 and Healight programs, which are aimed at treating
life-threatening conditions for which there are no or very few
available treatment options. To execute against these objectives,
we are dedicated to building a strong, value-driven organization
comprised of high-performing, talented individuals who are
committed to serving patients and caregivers who are in need of new
therapeutic solutions for rare and complex conditions."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1385818/000155837022008952/aytu-20220331x10q.htm
About Aytu BioPharma
Englewood, Colorado-based Aytu BioPharma, Inc., formerly known as
Aytu BioScience, Inc. -- http://www.aytubio.com-- is a specialty
pharmaceutical company with a growing commercial portfolio of
prescription therapeutics and consumer health products. The
company's primary prescription products treat attention deficit
hyperactivity disorder (ADHD) and other common pediatric
conditions. Aytu markets ADHD products Adzenys XR-ODT
(amphetamine) extended-release orally disintegrating tablets,
Cotempla XR-ODT (methylphenidate) extended-release orally
disintegrating tablets, and Adzenys-ER (amphetamine)
extended-release oral suspension.
Aytu Biopharma reported a net loss of $58.29 million for the year
ended June 30, 2021, a net loss of $13.62 million for the year
ended June 30, 2020, and a net loss of $27.13 million for the year
ended June 30, 2019. As of Sept. 30, 2021, the Company had $227.73
million in total assets, $116.23 million in total liabilities, and
$111.50 million in total stockholders' equity.
BALTIMORE HOTEL: S&P Raises Secured Revenue Bond Rating to 'CCC+'
-----------------------------------------------------------------
S&P Global Ratings raised the issue-level rating on Baltimore Hotel
Corp.'s (BHC) senior secured revenue refunding bond to 'CCC+' from
'CCC' due to the positive developments in the hotel's performance
recovery during the first quarter of 2022. However, S&P still need
to see a sustainable operating and financial recovery during 2022
before removing the credit from the 'CCC' category.
BHC owns Hilton Baltimore Inner Harbor, which is connected to the
Baltimore Convention Center (BCC) and has been operated by an
affiliate of Hilton Worldwide Holdings Inc. since August 2008. It
is a 757-room convention center hotel in downtown Baltimore's Inner
Harbor area, overlooking Oriole Park at Camden Yards and connected
to BCC by a pedestrian bridge. The hotel has approximately 100,000
sq. ft. of meeting and pre-function space, two ballrooms totaling
42,400 sq. ft., and a 567-space, four-story parking garage with two
subterranean levels. The hotel's net revenue and pledged city tax
revenue secure the bonds. City revenue includes a pledge of $7
million, subject to city appropriation, to be funded from the
citywide hotel occupancy tax (HOT) revenue. It also includes a
pledge of site-specific HOT revenue, which will vary based on the
project's occupancy, and the tax increment financing payment.
S&P said, "We believe that the project's default risk, which
stemmed from the failure to pay administrative expenses, is
currently mitigated in the short term. The project paid off all
overdue administrative expenses in 2021 and has had no unpaid
administrative expenses outstanding so far in this year. We believe
that the project would be able to handle its administrative
expenses for the remainder of 2022 with the balance of its
administrative expense account. The project may incur additional
legal fees due to an ongoing legal dispute with builder regarding
incorrect materials for piping. However, we believe the impact, if
any, should not be a concern as the hotel's operation begins to
recover. As the result, bondholders currently don't have rights to
claim an event of default and subsequent bond acceleration as there
are no unpaid administrative expenses. We previously had the rating
at 'CCC' given that non-payment of administrative expenses could
result in an event of default.
"The hotel's performance demonstrated early stages of recovery,
with positive monthly excess cash flow between February and April
2022. Starting in February this year, the hotel's demand showed a
rebound, which drove monthly excess cash flow up to $1.6 million
for the past three months. The hotel achieved RevPAR at $63 (53% of
2019 level) for year to date (YTD) March 2022. Based on the hotel's
recent performance we believe both transient and group business
demand for this hotel are beginning to recover. However, before
upgrading the senior bonds from the CCC+ rating, we need to see a
longer recovery and the project being able to cover operating
expenses and debt service with operating cash flows and not relying
on any reserve accounts."
The project's liquidity position is sufficient to cover its debt
service in the next 12 months without the support of any
operational cash flow nor funding from the City of Baltimore. In
March, the project drew $3.7 million from its debt service reserve
account (DSRA) to make its $6.5 million debt service payment. The
rest of the debt service payment was funded from the debt service
account and operational cash flow. After the drawdown, the DSRA
balance fell to $15.2 million. The total debt service payment in
next 12 months will be around $16.3 million ($9.9 million due
September 2022 plus $6.4 million due March 2023), which is slightly
higher than the DSRA's current balance of $15.2 million. However,
it can be fully covered by the liquidity from the project's senior
furniture, fixtures, and equipment (FF&E) reserve account
(currently at $2.4 million). Assuming no contribution from
operational cash flow nor funding from the City of Baltimore, the
project could survive for 12 months using only its reserves without
depleting them, but could face a shortfall on its debt obligation
in September 2023. For context, the project's monthly EBITDA was
around $0.5 million in February, $1.6 million in March, and $1.5
million in April of 2022, and typically has its strongest months
during the summer period.
The hotel's long-term performance is still uncertain, but group
bookings will play a significant role. The hotel's transient
business recovered faster than group business since it reopened in
April 2021. Transient RevPAR tapped over 100% of October 2019 level
in October 2021, but trended down quickly as the leisure demand was
significantly affected by the spread of omicron variant. S&P
believes that transient business continues to lead recovery in the
short term but is not expected to be a core driver for the hotel's
long-term performance given its over 60% concentration in group
revenues pre-pandemic.
Group RevPAR was below 40% of the same month in 2019 level in 2021.
The spikes in February and March this year were largely due to
national sports events and meetings, which returned to BCC for the
first time after pandemic. S&P said, "We've also observed positive
trends in group room nights position during the past 12 months. In
March 2022, it recovered to almost 80% of pre-COVID level compared
to March 2019, meaning the hotel currently has captured around 80%
group bookings of what it was in March 2019. The recovery in group
business is a significant factor for long-term performance, and we
will continue monitoring it for the rest of the year. Typical
events that bring groups to the hotel include sports events and
conventions on state and national levels."
S&P said, "The positive outlook reflects our view that if the
hotel's RevPAR and operating margin continue to improve during 2022
as it did during the first quarter of the year, reaching DSCR above
1.0x on a sustainable basis, we would upgrade the senior secure
bond.
"We could raise the rating if the hotel's RevPAR and operating
margin recover through 2022, leading to DSCR above 1.0x for the
12-month period of 2022 without additional funding from the City of
Baltimore and the need to use reserve accounts.
"We could lower the rating by at least one notch if the hotel
incurs monthly cash deficits and its operating and/or
administrative expenses become unpaid again, causing a covenant
breach and potential event of default within the next 12 months."
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
Health and safety.
U.S. hotel demand is recovering meaningfully since the omicron
variant and hotel ADR is strong across price segments, driving
positive ratings actions over the past few months. Most U.S.
communities may have learned to live with the virus and new
variants without adopting constraints that materially disrupt
travel. With business and group travel improving, we expect
upper-upscale full-service hotels to return to more normal
occupancy levels, significantly supporting RevPAR recovery.
BARRERA FAMILY TRANSPORT: Starts Chapter 11 Subchapter V Case
-------------------------------------------------------------
Barrera Family Transport LLC filed for chapter 11 bankruptcy
protection in the District of Arizona.
According to court documents, Barrera Family Transport estimates
between 1 and 49 unsecured creditors.
The petition states that funds will be available to unsecured
creditors.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is
slated for June 7, 2022 9:00 a.m.
About Barrera Family Transport
Barrera Family Transport LLC is a licensed and bonded freight
shipping and trucking company running freight hauling business.
Barrera Family Transport filed for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
22-02872) on May 6, 2022. In the petition filed by Fernando Garza
Barrera, as managing member, Barrera Family Transport LLC listed
estimated assets between $50,000 and $100,000 and estimated
liabilities between $100,000 and $500,000.
Dawn Maguire has been named as Chapter 11 trustee.
The case is assigned to Honorable Bankruptcy Judge Brenda K.
Martin.
Allan 2 Newdelman, of ALLAN D NEWDELMAN PC, is the Debtor's
counsel.
BARRETT AND PEREZ: Starts Chapter 11 Subchapter V Case
------------------------------------------------------
Barrett and Perez Construction LLC filed for chapter 11 protection
in the Western District of Tennessee.
According to court documents, Barrett and Perez Construction LLC
estimates between 1 and 49 unsecured creditors. The petition
states that funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for
June 1, 2022 at 1:30 P.M. at the Office of U.S.T.
About Barrett and Perez Construction
Barrett and Perez Construction LLC operates in the residential
building construction industry.
Barrett and Perez sought relief under Subchapter V of Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-21799) on May 9,
2022. In the petition fled by Alejandro Perez, as managing member,
Barrett and Perez Construction disclosed total assets amounting to
$833,875 and total liabilities of $1,004,922.
The case is assigned to Honorable Bankruptcy Judge Denise E
Barnett.
Toni Campbell Parker, Esq., of LAW FIRM OF TONI CAMPBELL PARKER, is
the Debtor's counsel.
BAUSCH + LOMB: Fitch Assigns 'BB-' LT IDR, On Watch Positive
------------------------------------------------------------
Fitch Ratings assigned final ratings to Bausch + Lomb Corporation
(BLCO) with the Long-Term Issuer Default Rating (IDR) of 'BB-' with
a Rating Watch Positive (RWP) and a 'BB+'/'RR1'/RWP rating for
BLCO's secured term loan upon the closing of the initial public
offering and debt transactions. The rating actions follow the IPO
of BLCO.
KEY RATING DRIVERS
BLCO Solid Eye Care Business: BLCO is a leading global eye health
company with a portfolio of over 400 products. Fitch expects that
it will maintain an investment-grade capitalization upon its
separation from BHC and transition from a secured borrowing base to
unsecured.
Fitch views BLCO as significantly smaller than Boston Scientific
Corp. (BBB/Positive), Baxter International (BBB/Stable), Becton,
Dickinson & Company (BBB-/Positive) and Zimmer Biomet Holdings,
Inc. (BBB/Stable). BLCO also operates in consumer health and
prescription pharmaceuticals, providing some additional sector
diversification compared to Boston Scientific and Zimmer Biomet. It
also presents a moderate degree of regulatory risk regarding drug
pricing.
BLCO's Ratings Tied to BHC's: The primary driver of BLCO's ratings
is that of BHC's IDR (B/Negative) until the completion of the
separation. Fitch views the ringfencing and access and control
factors to be porous thereby allowing BHC's credit profile to
influence BLCO's. Fitch notches BLCO's ratings two notches higher
than BHC's and, until separation, any changes in the linkage could
lower BLCO's ratings.
Moreover, changes to BHC's ratings would influence BLCO's until
they are assessed on a stand-alone basis. An investment-grade
rating would likely have leverage below 3.5x and an unsecured
capital structure. Fitch will assess BLCO's corporate governance
and its impact on ratings and ESG Relevance Scores as it relates to
the separation. Additional detail on BHC's ratings can be found in
the rating action commentary dated Jan. 26, 2022.
Coronavirus Impact Moderating: BLCO's business is recovering from
the negative impact of COVID-19. Cataract and laser vision
correction surgeries faced significant challenges as these
procedures are generally considered elective or deferrable. Looking
back, the second quarter of 2020 will probably remain the trough in
revenues.
Fitch believes growth will continue as population immunity
increases, more therapeutics and diagnostic tests become available
and protocols by providers mitigate the risk and patient concern
associated with having these procedures. Nevertheless, the
potential emergence of a resistant and more virulent variant could
lead to a setback in procedure volumes.
Supply Chain/Inflation: Supply chain constraints and inflationary
pressures present challenges to many firms in the health care
sector. BLCO is generally managing these issues through building
stocks of raw materials and API. In addition, the company is adding
redundancies in its suppliers.
Reliably Increasing Demand: Aging demographics, improved income
demographics in emerging markets, increasing digital screen times
and the ongoing increase in the incidence of diabetes will likely
drive low- to mid-single digit growth in the demand for eye health
products and services during the intermediate term. A significant
number of BLCO's products enjoy leading market positions and strong
brand recognition. Consumables and implantables account for roughly
52% and 26% of BLCO's revenues, respectively. The company's product
portfolio has only limited exposure to market exclusivity losses.
Pipeline to Support Growth: Innovation is important to remain
competitive in the eye health market, Fitch views the company's R&D
efforts will help to drive intermediate- and long-term revenue
growth while also supporting margins. BLCO makes consistent and
significant investments in new product development. Its R&D efforts
span all three businesses with intensity geared more towards
surgical and ophthalmic pharmaceuticals. Fitch expects the company
will also continue to pursue innovation in its Vision Care business
with technological advancements being more incremental in nature.
Margin Expansion: Fitch expects that margins will improve over the
forecast period. Improving sales mix and manufacturing efficiency
gains should increase gross margins. SG&A as a percent of sales are
forecasted to decline owing to strong management of other operating
costs. In addition, increasing revenue should provide additional
operating leverage. In addition, Fitch believes only a moderate
amount BLCO's revenues are exposed to branded pharmaceuticals
pricing issues in the U.S.
Consistently Positive FCF: Advancing sales, improving margins,
solid working capital management and moderate capital expenditure
requirements should support consistently positive and increasing
FCF. Fitch does not expect that BLCO will pay dividends or engage
in share repurchases during the near term. Capital deployment will
focus on internal investment, external collaborations and targeted
acquisitions.
For a global eye health company that includes medical devices and
pharmaceuticals, Fitch believes BLCO has relatively minimal
contingent liability risk regarding product liability, intellectual
property and other regulatory issues. As such, Fitch forecasts
BLCO's leverage (total debt/EBITDA) to decline over the forecast
period to below 2.5x, primarily through EBITDA growth. The current
level of balance sheet debt is generally viewed as a permanent
component of the capital structure and maturities are expected to
be refinanced.
DERIVATION SUMMARY
BLCO's 'BB-' IDR is based on it being a majority owned subsidiary
of BHC until the separation. Fitch views BLCO to be a stronger
subsidiary than the weaker parent and notches BLCO's ratings +2
from the consolidated parent's 'B' IDR. The notching is based on
Fitch viewing the ringfencing to be porous due to the lack of any
restrictive investment or dividend covenants and access and control
to be porous due to some overlapping Board of Directors members.
Until separation, BLCO's ratings will be influenced by BHC's whose
Rating Derivation is described in the RAC dated Jan. 26, 2022.
BLCO is significantly smaller than Boston Scientific Corp.
(BBB/Positive), Baxter International (BBB/Stable), Becton,
Dickinson & Company (BBB-/Positive) and Zimmer Biomet Holdings,
Inc. (BBB/Stable). BLCO also operates in consumer health and
prescription pharmaceuticals, providing some additional sector
diversification compared to Boston Scientific and Zimmer Biomet. It
also presents a moderate degree of regulatory risk regarding drug
pricing.
BLCO is somewhat less diversified than Becton, Dickinson and
Baxter. In addition, BLCO is solely focused on eye health, while
all of its peers address a number of disease markets, with Zimmer
Biomet also being somewhat less diversified than the others. Zimmer
Biomet and Becton, Dickinson have a similar financial profile to
BLCO, and Fitch expects the company to maintain gross debt/EBITDA
between 2.5x-3.0x.
Parent Subsidiary Linkage
The approach taken is a weak parent (BHC)/strong subsidiary (BLCO).
Using Fitch's PSL criteria, Fitch concludes there is porous ring
fencing and porous access & control. As such, Fitch rates the
parent and subsidiary at the consolidated level while notching the
subsidiary's rating up by two.
The release of guarantees and the unrestricting of BLCO will occur
upon the IPO (achieved) and the achievement of 7.6x pro forma net
leverage (not yet achieved) at BHC Parent, BLCO will be
unrestricted under the Parent debt documents and its capital stock
will no longer be pledged.
Fitch views imitations on investments, acquisitions and dividends
provide a moderate degree of ring fencing. However, the credit
facility can be amended.
BLCO will have its own Board of Directors (BOD), management and
treasury operations. However, some BOD members are also members of
BHC's BOD.
ESG CONSIDERATIONS
Bausch + Lomb Corporation has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to pressure to contain health care
spending growth; highly sensitive political environment, and social
pressure to contain costs or restrict pricing, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors. It is worth noting that
pharmaceuticals account for less than 15% of the firm's total
sales.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
KEY ASSUMPTIONS
-- Mid- to high-single-digit organic revenue growth driven by the
uptake of new product commercialization moderate offset by
increased competitive pressure for some established products;
-- Annual FCF generation greater than $400 million during the
forecast period with moderately improving operating EBITDA
margins;
-- Dividends are not included in the forecast, but if instituted
would decrease FCF by the same amount as Fitch defines as
CFFO-capex-dividends;
-- Cash deployment prioritized for tuck-in acquisitions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
BLCO
-- Fitch viewing BLCO on a standalone basis;
-- An upgrade of BHC. BHC's Rating Sensitivities are detailed
below.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
BLCO
-- Evidence of factors related to ringfencing and access and
control that would lead Fitch to rate BLCO on a consolidated
basis with BHC or with one notch rather than two notches;
-- A downgrade of BHC. BHC's Rating Sensitivities are detailed
below.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
BHC
-- An expectation of gross debt leverage (total debt/EBITDA)
durably below 6.0x;
-- BHC continues to maintain a stable operating profile and
refrains from pursuing large, leveraging transactions
including acquisitions;
-- Forecasted FCF remains significantly positive.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
BHC
-- Gross debt leverage (total debt/EBITDA) durably above 7.0x;
-- FCF significantly and durably deteriorates;
-- Refinancing risk increases and the prospect for meaningful
leverage reduction weakens.
BLUE DOLPHIN: Posts $3.5 Million Net Income in First Quarter
------------------------------------------------------------
Blue Dolphin Energy Company filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $3.48 million on $110.68 million of total revenue from
operations for the three months ended March 31, 2022, compared to a
net loss of $3.17 million on $59.41 million of total revenue from
operations for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $67.69 million in total
assets, $87.84 million in total liabilities, and a total
stockholders' deficit of $20.15 million.
"Blue Dolphin reported solid financial results for the first
quarter of 2022 as refining fundamentals improved," said Jonathan
P. Carroll, chief executive officer of Blue Dolphin. "In addition,
the Nixon refinery operated well."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/793306/000165495422006985/bdco_10q.htm
About Blue Dolphin
Headquartered in Houston, Texas, Blue Dolphin Energy Company --
http://www.blue-dolphin-energy.com-- is an independent downstream
energy company operating in the Gulf Coast region of the United
States. The Company's subsidiaries operate a light sweet-crude,
15,000-bpd crude distillation tower with approximately 1.2 million
bbls of petroleum storage tank capacity in Nixon, Texas. Blue
Dolphin was formed in 1986 as a Delaware corporation and is traded
on the OTCQX under the ticker symbol "BDCO."
Blue Dolphin reported a net loss of $12.84 million for the 12
months ended Dec. 31, 2021, compared to a net loss of $14.46
million for the 12 months ended Dec. 31, 2020. As of Dec. 31,
2021, the Company had $66.31 million in total assets, $89.94
million in total liabilities, and a total stockholders' deficit of
$23.63 million.
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2022, issued a "going concern" qualification in its report
dated April 1, 2022, citing that the Company is in default under
secured and related party loan agreements and has a net working
capital deficiency. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
CARIBBEAN BANANA: Seeks Bankruptcy Protection
---------------------------------------------
Caribbean Banana Inc. filed for chapter 11 protection in the
District of Puerto Rico.
The petition states funds will be available to Unsecured
Creditors.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is
slated for June 4, 2022 at 9:00 A.M.
About Caribbean Banana
Caribbean Banana, Inc. sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-01302) on May
6, 2022, listing as much as $500,000 in both assets and
liabilities.
Honorable Bankruptcy Judge Maria De Los Angeles Gonzalez oversees
the case.
Enrique Almeida Bernal, Esq., and Zelma B. Davila, Esq., at Almeida
& Davila, P.S.C. are the Debtor's bankruptcy attorneys.
CASSWAY CONTRACTING: Wins Access to TD Bank's Cash Collateral
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Cassway Contracting Corp. to use the cash collateral of
TD Bank, N.A. on a final basis in accordance with the budget.
The Court said except as expressly altered by or as otherwise set
forth in the Final Order, the interim relief so-ordered on the
record at the hearings on March 9 and March 28, 2022, and April 26,
2022, is ratified and affirmed, and will remain in full force and
effect in accordance with the terms of the Final Order.
The Debtor believes, subject to confirmation, that on February 1,
2016, the Debtor and TD Bank, N.A entered into a Loan and Security
Agreement and a revolving term note, each as amended by
Modification Agreements dated September 9, 2019. The Note was
further amended by an Amended and Restated Revolving Term Note
increasing the maximum principal amount from $1,000,000 to
$1,750,000, each with a term expiring on September 1, 2021.
TD Bank was perfected by virtue of the filing of a UCC-1 financing
statement on statement on June 2, 2009, followed by Continuations
filed on January 10, 2014, and April 8, 2019.
As of the Petition Date, the Debtor was indebted to TD Bank in the
approximate amount of $1,450,000, plus accrued interest in the
amount of $4,058 and other fees, attorneys' fees and expenses in
the amount of $3,278.
As adequate protection, TD Bank is granted replacement liens, to
the extent of any diminution in value of its cash collateral and
non-cash collateral, in all of the Debtor's pre-petition and
post-petition assets. The post-petition grant of the foregoing
security interests will be supplemental to and in addition to, the
security interests which TD Bank possess pursuant to the TD Bank's
Pre-Petition Loan Documents.
The Replacement Liens granted to TD Bank will be prior and senior
to (a) all liens and encumbrances of other secured creditors in and
to such property granted, or arising, subsequent to the date of the
Final Order; (b) any intercompany claim of the Debtor, or any
parent, subsidiary or affiliate of the Debtor; and (c) any security
interest or lien that is avoided or otherwise preserved for the
benefit of the Debtor's estate pursuant to section 551 of the
Bankruptcy Code; provided, however, that the Replacement Liens
granted to the TD Bank pursuant to the Final Order: (A) will be
subject, during the Final Period, to a carveout for (i) any
quarterly or other fees payable to the United States Trustee
pursuant and any Bankruptcy Court Clerk's fees; (ii) any Court
approved professional fees for the Debtor's in the aggregate amount
of (x) $150,000, or, (y) in the event there has been no diminution
in Cash Collateral from the Commencement Date, $200,000, (with
(c)(i) and (ii) therein consisting of the Carveouts); (c) valid and
enforceable claims under Article 3A of the New York Lien Law; and
(d) the fees and commissions of a hypothetical Chapter 7 trustee in
an amount not to exceed $10,000; (B) will not attach to any claims
for relief under Chapter 5 of the Bankruptcy Code or the proceeds
thereof (other than claims arising under Section 549 of the
Bankruptcy Code); and (C) will not prime any valid, perfected, and
non-avoidable pre-petition lien held by, or granted to, any other
party.
The Replacement Liens granted pursuant will constitute valid and
duly perfected security interests and liens.
As additional adequate protection, the Debtor, without further
order of or application to the Court, stipulates and agrees to the
monthly payment of postpetition interest on and after the Petition
Date with respect to the TD Bank Claim at the contractual
nondefault rate equal to the U.S. Prime Rate, as more particularly
set forth in the applicable TD Bank PrePetition Loan Documents.
As additional adequate protection, the Debtor is directed and
authorized to pay the postpetition out-of-pocket costs and expenses
incurred by TD Bank capped at $6,000 per month, with any such
payment to be made no later than 10 days of submission of an
invoice to the Debtor and the Debtor's counsel and in accordance
with the payment instructions accompanying such invoice provided no
specific objection has been raised to such invoice; to the extent
the monthly amount exceeds $6,000 TD Bank will file a fee notice on
the docket with a 30-day period for objection and in the event of
an objection the dispute will be determined by the Bankruptcy Court
and to the extent a specific objection to the invoice is raised,
the amounts to which there is no specific objection will be paid
within 10 days of submission of the invoice and the disputed
amounts will be resolved by the Court.
If, and to the extent that, the Replacement Liens and the adequate
protection payments are insufficient to provide adequate protection
for TD Bank, the Bank is granted an allowed superpriority claim
against the Debtor's estate, subject only to the Carveouts.
A copy of the order is available at https://bit.ly/3Nu7XcQ from
PacerMonitor.com.
About Cassway Contracting Corp.
Cassway Contracting Corp. is a drywall contractor to commercial and
residential buildings in the New York and New Jersey metro areas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. N.Y. Case No. 22-22107) on March 5,
2022. In the petition signed by James Cassidy, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Sean H. Lane oversees the case.
Dawn Kirby, Esq., at Kirby Aisner & Curley LLP, is the Debtor's
counsel.
CENTENNIAL RESOURCE: S&P Places 'B' ICR on Watch Pos. on Merger
---------------------------------------------------------------
S&P Global Ratings placed all of its ratings on Centennial Resource
Development Inc., including the 'B' issuer credit rating and 'B+'
issue-level rating, on CreditWatch with positive implications.
This reflects the likelihood that S&P will raise the issuer-level
rating and issue-level rating by up to one notch following the
close of the acquisition.
Centennial has announced a merger with Colgate Energy Partners III
LLC valuing Colgate at approximately $3.9 billion and the overall
value of the combined company around $7 billion.
Centennial will issue approximately 269.3 million shares to the
current Colgate equity holders, assume Colgate's net debt of $1.4
billion, and pay $525 million in cash to Colgate's equity holders.
S&P said, "We placed the ratings on CreditWatch positive to reflect
the potential that we will raise the ratings by one notch following
the close of the acquisition. The pro forma company will have
approximately 180,000 net acres in the Delaware Basin, production
around 135,000 barrels of oil equivalent per day (mboe/d), reserves
of around 550 million (mm) boe/d, making its scale consistent with
higher rated-peers. Additionally, forecasted net debt leverage of
around 1x at year-end 2022 supports the rating action. Both
companies' boards have approved the transaction, which is still
subject to shareholder approval, regulatory approvals, and other
customary closing conditions.
"The positive CreditWatch placement reflects our expectation that
we could raise our ratings one-notch at the close of the merger
given there are no material changes to the company's long term
capital structure or financial policy. We expect to resolve the
CreditWatch placement after the close of the transaction, which is
expected to be in the third quarter of 2022."
CFN ENTERPRISES: Delays Filing of First Quarter Form 10-Q
---------------------------------------------------------
CFN Enterprises Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its
Quarterly Report on Form 10-Q for the period ended March 31, 2022.
The Company has determined that it is unable to file the Quarterly
Report within the prescribed time period without unreasonable
effort or expense. Additional time is necessary as the Company is
still working on the completion of the financial statements for the
period ended March 31, 2022. The Company currently expects to file
the Quarterly Report within the five calendar day extension period
provided by Rule 12b-25.
The Company's results of operations for the three months ended
March 31, 2022 are anticipated to be significantly different from
the corresponding period in the prior fiscal year due to the
Company's purchase of all of the equity interests of CNP Operating
LLC, a Colorado limited liability company, on Aug. 25, 2021. The
Company had a net loss available to common shareholders of
approximately $376,000 during the three months ended March 31,
2021. The Company is not yet able to anticipate the net loss
available to common shareholders for the three months ended March
31, 2022 pending completion of the Company's financial statements.
About CFN
CFN Enterprises Inc. owns and operates CNP Operating, a
cannabidiol, or CBD, manufacturer vertically integrated with a 360
degree approach to the processing of high quality CBD products
designed for growers, pharmaceutical, wellness providers, and
retailers' needs, and a cannabis industry focused sponsored content
and marketing business. The Company's ongoing operations currently
consist primarily of CNP Operating and the CFN Business and it will
continue to pursue strategic transactions and opportunities. The
Company is currently in the process of launching an e-commerce
network focused on the sale of general wellness CBD products.
CFN Enterprises reported a net loss of $12.20 million for the year
ended Dec. 31, 2021, compared to a net loss of $1.42 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$6.69 million in total assets, $9.09 million in total liabilities,
and a total stockholders' deficit of $2.39 million.
New York, NY-based RBSM LLP, the Company's auditor since 2012,
issued a "going concern" qualification in its report dated May 13,
2022, citing that the Company has suffered recurring losses from
operations and will require additional capital to continue as a
going concern. This raises substantial doubt about the Company's
ability to continue as a going concern.
CFN ENTERPRISES: Incurs $12.2 Million Net Loss in 2021
------------------------------------------------------
CFN Enterprises Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$12.20 million on $3.16 million of net revenues for the year ended
Dec. 31, 2021, compared to a net loss of $1.42 million on $506,490
of net revenues for the year ended Dec. 31, 2020.
As of Dec. 31, 2021, the Company had $6.69 million in total assets,
$9.09 million in total liabilities, and a total stockholders'
deficit of $2.40 million.
New York, NY-based RBSM LLP, the Company's auditor since 2012,
issued a "going concern" qualification in its report dated May 13,
2022, citing that the Company has suffered recurring losses from
operations and will require additional capital to continue as a
going concern. This raises substantial doubt about the Company's
ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1352952/000109690622001124/cnfn_10k.htm
About CFN
CFN Enterprises Inc. owns and operates CNP Operating, a
cannabidiol, or CBD, manufacturer vertically integrated with a 360
degree approach to the processing of high quality CBD products
designed for growers, pharmaceutical, wellness providers, and
retailers' needs, and a cannabis industry focused sponsored content
and marketing business. The Company's ongoing operations currently
consist primarily of CNP Operating and the CFN Business and it will
continue to pursue strategic transactions and opportunities. The
Company is currently in the process of launching an e-commerce
network focused on the sale of general wellness CBD products.
CHILAQUILES FACTORY: Taps Kristy R. Cortez CPA as Accountant
------------------------------------------------------------
Chilaquiles Factory, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to employ Kristy R. Cortez
CPA, PC as its accountant.
The firm's services include the preparation of annual tax returns
and monthly operating reports, and monthly bookkeeping services.
The firm will charge these flat monthly fees:
Bookkeeping $840
Annual Tax Returns $300
Monthly Operating Reports $175
As disclosed in court filings, Kristy R. Cortez is a disinterested
person within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Kristy R. Cortez, CPA
Kristy R. Cortez CPA, PC
3600 W Parmer Ln #105
Austin, TX 78727
Phone: (512) 835-2635
Fax: (512) 835-2675
Email: info@kristyrcortezcpa.com
About Chilaquiles Factory
Chilaquiles Factory, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. W.D. Texas Case No.
22-10170) on March 17, 2022, listing as much as $1 million in both
assets and liabilities. Eric Terry serves as Subchapter V trustee.
Judge H. Christopher Mott oversees the case.
The Debtor tapped Stephen W. Sather, Esq., at Barron & Newburger,
PC as legal counsel and Kristy R. Cortez CPA, PC as accountant.
CHRISTIAN CARE CENTERS: Case Summary & 30 Top Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Christian Care Centers, Inc.
900 Wiggins Parkway
Mesquite, TX 75150
Business Description: CCCI was incorporated in 1947 as a
nonprofit Texas corporation. The
Foundation was incorporated in 1994 also
as a nonprofit Texas corporation. CCCI,
a faith-based organization, operates
three senior living housing and health
care campuses in the Dallas/Fort Worth
Metroplex. In addition, CCCI owns
unimproved real property in Dallas
County and Tarrant County, adjacent to
the Mesquite and Fort Worth communities.
The Foundation is a supporting
organization that serves as an endowment
organization for CCCI.
Chapter 11 Petition Date: May 23, 2022
Court: United States Bankruptcy Court
Northern District of Texas
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Christian Care Centers, Inc. (Lead Debtor) 22-80000
Christian Care Centers Foundation, Inc. 22-80001
Judge: Hon. Stacey G. Jernigan
Debtors' Counsel: Buffey E. Klein, Esq.
HUSCH BLACKWELL LLP
1900 N. Pearl Street, Suite 1800
Dallas, Texas 75201
Tel: (214) 999-6100
Fax: (214) 999-6170
Email: Buffey.Klein@huschblackwell.com
- and -
Lauren Hayes, Esq.
Amber Fly, Esq.
HUSCH BLACKWELL LLP
111 Congress Avenue, Suite 1400
Austin, Texas 78701
Tel: (512) 479-9758
Fax: (512) 479-1101
Email: Lauren.Hayes@huschblackwell.com
Amber.Fly@huschblackwell.com
Debtors'
Restructuring
Advisor: GLASSRATNER ADVISORY & CAPITAL LLC
d/b/a B. RILEY ADVISORY SERVICES
Debtors'
Investment
Banker: HOULIHAN LOKEY CAPITAL, INC.
Debtors'
Claims &
Noticing
Agent: EPIQ CORPORATE RESTRUCTURING, LLC
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Mark Shapiro as chief restructuring
officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/F4NBLFQ/Christi-an_Care_Centers_Inc__txnbke-22-80000__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Quality Care Rehab Vendor $324,922
8477 S. Suncoast Blvd.
Homosassa, FL 34446
Trina Fisk
Tel: 352-382-4800
Email: tfisk@therapytmgmt.com
2. Resident 205273 Entrance $189,364
(address redacted) Fee Refund
3. Robert Zarbaugh Former $186,536
(address redacted) Employee
4. Resident 205287 Entrance $177,840
(address redacted) Fee Refund
5. Resident 205292 Entrance $177,840
(address redacted) Fee Refund
6. Resident 205234/205235 Entrance $169,358
(address redacted) Fee Refund
7. US Foodservice, Inc. Vendor $166,776
PO Box 843202
Dallas, TX 75284-3202
Charlene Gross
Tel: 972-487-6200
Email: Charlene.Gross @usfoods.com
8. Resident 205184 Entrance $166,500
(address redacted) Fee Refund
9. Resident 233 Entrance $160,875
(address redacted) Fee Refund
10. Resident 205175 Entrance $160,852
(address redacted) Fee Refund
11. Former Resident 3 Entrance $156,330
(address redacted) Fee Refund
12. Resident 2030307 Entrance $154,552
(address redacted) Fee Refund
13. Resident 205262 Entrance $152,775
(address redacted) Fee Refund
14. Resident 205238 Entrance $151,452
(address redacted) Fee Refund
15. Resident 205146 Entrance $149,891
(address redacted) Fee Refund
16. Resident 205197 Entrance $141,500
(address redacted Fee Refund
17. SISCO Vendor $139,515
LeadingAge Texas
Premium
800 Main Street
Dubuque, IA 52001
Jordan Steuer
Tel: 563-587-5174
Email: jsteuer@siscobenefits.com
18. Resident 205293 Entrance $139,500
(address redacted) Fee Refund
19. McKesson Vendor $138,545
Medical-Surgical
c/o Minnesota
Supply, Inc.
P O Box 630693
Cincinnati, OH 45263-0693
Theresa Schrimpf
Tel: 800-453-5180
Email: Theresa.Schrimpt
@McKesson.com
20. Resident 205216 Entrance $138,020
(address redacted) Fee Refund
21. Resident 205249 Entrance $134,640
(address redacted) Fee Refund
22. Resident 205254/205255 Entrance $134,640
(address redacted) Fee Refund
23. Resident 205223 Entrance $132,320
(address redacted) Fee Refund
24. Resident 2020323 Entrance $129,168
(address redacted) Fee Refund
25. Resident 205185/205186 Entrance $125,320
(address redacted) Fee Refund
26. Resident 205213 Entrance $118,800
(address redacted) Fee Refund
27. Resident 205231/205232 Entrance $118,800
(address redacted) Fee Refund
28. Resident 205264 Entrance $115,776
(address redacted) Fee Refund
29. Resident 205191 Entrance $114,841
(address redacted) Fee Refund
30. Resident 205268 Entrance $113,814
(address redacted) Fee Refund
CHRISTIAN CARE: Files for Chapter 11 to Sell to Boncrest
--------------------------------------------------------
Christian Care Communities & Services said it has filed for Chapter
11 protection after identifying a purchaser for the communities
that is committed to maintaining a high standard of care and
services for residents and their families. CCC&S is a non-profit,
faith-based organization that operates three communities for
seniors in Mesquite, Fort Worth and Allen.
Boncrest Resource Group, a mission-driven, nonprofit charitable
organization based in Atlanta, is lined up to assume operation of
the three communities. The organization plans to honor all resident
contracts, protect residents' deposits and entrance fees, and, with
the company's existing employees, continue providing high-quality
care and services.
Through the transition, CCC&S will continue to operate the
communities, providing high-quality care and services to all
residents on the three campuses, maintaining the experienced and
dedicated staff, and minimizing change for residents and
employees.
The acquisition will resolve the financial uncertainty for CCC&S
that the COVID-19 pandemic exacerbated. To complete the sale, CCC&S
today for Chapter 11 bankruptcy protection in the Northern District
of Texas. As part of the process, CCC&S has secured
debtor-in-possession financing to fund the communities through the
bankruptcy cases.
The transaction and process will allow proceeds from the sale to be
distributed to creditors while positioning the purchasers to
continue delivering high-quality care and services to residents and
communities. The process also requires that CCC&S be prepared to
consider other offers (if any) that might be in the best interest
of residents, employees and other stakeholders.
"Our focus throughout this process has been on our residents and
staff โ continuing to serve our communities, maintaining our
phenomenal team and protecting the assets of those we serve," said
Sabrina Porter, CCC&S President and CEO. "We are grateful to have
found a buyer who shares our long-term commitment and values. This
sale, when approved by the bankruptcy court, will keep our
communities stable and sustainable for years to come."
CCC&S was founded in 1947 as a ministry to retired Church of Christ
ministers and has grown over the past seven decades. At its three
campuses, it offers independent living, assisted living, memory
care, skilled nursing, respite care and hospice care, among other
services.
Boncrest is committed to providing quality services, activities,
and programs that serve public and charitable purposes in a rapidly
changing and challenging health care economy. The organization
shares CCC&S' values and commitment to care and services โ and to
the wellbeing of residents and patients.
"Christian Care Communities & Services has a proud mission โ to
serve this region and its seniors โ and a long history of doing
just that. We are honored to take up that mantle by continuing to
deliver care and services to residents," said Tom Baker, Director
and CEO of Boncrest Resource Group. "These are vital communities
providing effective, essential and valuable services to seniors and
their families. We're committed to ensuring that they continue to
do so."
The sale of the CCC&S properties is expected to be completed in
August or September through a court-approved process. By going
through this process, CCC&S has created a path forward that will
protect residents' deposits and entrance fees, and will maintain
the organization's longstanding commitments. As part of the
proposed acquisition, Boncrest will assume all resident agreements
and the associated obligations.
Residents, employees and vendors will be contacted directly with
information about the transition.
About Christian Care Centers
Christian Care Centers, Inc., was incorporated in 1947 as a
nonprofit Texas corporation. The Christian Care Centers
Foundation, Inc., was incorporated in 1994 also as a nonprofit
Texas corporation. CCCI, a faith-based organization, operates
three senior living housing and health care campuses in the
Dallas/Fort Worth Metroplex. In addition, CCCI owns unimproved
real property in Dallas County and Tarrant County, adjacent to the
Mesquite and Fort Worth communities. The Foundation is a
supporting organization that serves as an endowment organization
for CCCI.
On May 23, 2022, Christian Care Centers, Inc., and Christian Care
Centers Foundation, Inc., sought Chapter 11 protection (Bankr. N.D.
Tex. Lead Case No. 22-80000) after finding a buyer for the
business.
Christian Care Centers estimated assets and debt of $50 million to
$100 million as of the bankruptcy filing.
The Hon. Stacey G. Jernigan is the case judge.
The Debtors tapped HUSCH BLACKWELL LLP as counsel; GLASSRATNER
ADVISORY & CAPITAL LLC d/b/a B. RILEY ADVISORY SERVICES as
restructuring advisor; and HOULIHAN LOKEY CAPITAL, INC., as
investment banker. EPIQ CORPORATE RESTRUCTURING, LLC, is the
claims agent.
CIRTRAN CORP: Incurs $297K Net Loss in First Quarter
----------------------------------------------------
Cirtran Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $296,503 on $691,768 of net sales for the three months ended
March 31, 2022, compared to a net loss of $327,555 on $619,399 of
net sales for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $1.76 million in total
assets, $42.62 million in total liabilities, and a total
stockholders' deficit of $40.86 million.
The Company has had a history of losses from operations, as its
expenses have been greater than its revenue. The Company's
accumulated deficit was approximately $78.1 million at March 31,
2022. As of March 31, 2022, the Company had current assets of
$1,429,633 and current liabilities of approximately $40 million,
resulting in a working capital deficit of approximately $38.5
million at March 31, 2022.
During the three months ended March 31, 2022, operations generated
$66,057 of net cash, comprised of a loss from continuing operations
of $258,698, noncash items totaling $66,442 consisting primarily of
losses recognized from the changes in fair values of derivative
liabilities and debt discount amortization, and changes in working
capital totaling $239,406. During the three months ended March 31,
2021, operations used $61,745 of net cash, comprised of a net loss
from continuing operations of $289,714, noncash items totaling
$70,103 consisting of losses recognized from the changes in fair
values of derivative liabilities and expense paid by related
parties on its behalf, and changes in working capital totaling
$157,866.
During the three months ended March 31, 2022, financing activities
used $35,000 of cash, compared to using $15,000 of cash during the
three months ended March 31, 2021. Cash used in financing
consisted of repayments of related-party loans.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/813716/000149315222013841/form10-q.htm
About Cirtran Corp
West Valley City, Utah-based CirTran Corporation is an established
global company with a diversified expertise in manufacturing,
marketing, distribution and technology in a wide variety of
consumer products, including tobacco products, medical devices and
beverages.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2020, issued a "going concern"
qualification in its report dated April 15, 2022, citing that the
Company has a significant accumulated deficit and working capital
deficiency. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
COLGATE ENERGY: S&P Places 'B' ICR on Watch Positive on Merger
--------------------------------------------------------------
S&P Global Ratings placed all its ratings on Colgate Energy
Partners III LLC, including its 'B' issuer credit and 'B+'
issue-level ratings, on CreditWatch with positive implications,
reflecting the likelihood of an upgrade following the close of the
merger, which S&P expects to take place in the second half of
2022.
U.S.-based crude oil and natural gas exploration and production
companies Centennial Resource Development Inc. and Colgate Energy
Partners III LLC announced their intent to combine through a cash
and stock merger.
S&P said, "The CreditWatch placement reflects the likelihood that
we will raise our ratings on Colgate Energy by one notch after the
close of its merger with Centennial, given the combined improved
scale. Although the combined entity will be a public company, we
expect it to be significantly owned by financial sponsors Pearl
Energy Investments, NGP and Riverstone Holdings."
The merger includes a $525 million payout to Colgate Energy equity
owners, 269 million shares of Centennial stock and the assumption
of Colgate's debt ($1.4 billion currently outstanding) with the
transaction valuing Colgate Energy at $3.9 billion. Centennial
shareholders will own approximately 53% of the combined entity,
with Colgate Energy shareholders owning the remaining 47%. Each
company's board of directors has approved the transaction, which
remains subject to regulatory and shareholder approvals.
CreditWatch
The CreditWatch positive placement reflects the likelihood that S&P
will raise the ratings on Colgate by one notch when the deal
closes, assuming the transaction is completed as proposed and there
are no material changes to its long term capital structure or
financial policy assumptions.
COLLEGE CABLE: Gets Final Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
authorized College Cable Services, Inc. to use cash collateral on a
final basis and provide adequate protection to the secured lender,
First Southern National Bank.
In the ordinary course of its business, the Debtor uses its income
to pay all necessary and required expenses of the Debtor, including
professional fees and expenses, comprising the Operating Expenses.
The Debtor acknowledges that as of the Petition Date, it was the
borrower under 24 prepetition loans comprising the Pre-Petition
Facility with the Secured Lender and has outstanding obligations in
the principal amount of approximately $968,470, exclusive of
accrued but unpaid interest, fees, costs and expenses. The Debtor
believes the Secured Lender will assert the Prepetition
Indebtedness is secured by, among other assets of the Debtor, a
first position priority security interest in all cash and cash
equivalents.
In addition to all existing security interests and liens granted to
or for the benefit of the Secured Lender in and to their respective
prepetition collateral, as adequate protection for, and to secure
payment of an amount equal to the Collateral Diminution, the
Secured Lender is granted a security interest in and lien upon all
of the Debtor's assets. The Debtor also grants the Secured Lender a
mortgage in the Building.
In the event the Secured Lender has a claim allowable under section
507(a)(2) of the Bankruptcy Code should the adequate protection
provided for prove insufficient to protect the Secured Parties
interest in and to the cash collateral, the Debtor will grant the
Secured Parties a superpriority administrative expense claim
pursuant to section 507(b) of the Bankruptcy Code, senior in
priority to any and all claims against the Debtor arising under
section 507(a) of the Bankruptcy Code, equivalent to the amount, if
any, of the diminution in the value of the cash collateral, except
the Carve-Out.
The Carve-Out includes: (i) any amounts payable to the U.S. Trustee
pursuant to 28 U.S.C. section 1930(a); (ii) amounts payable to the
subchapter V trustee; and (iii) payment of unpaid professional
fees, costs, and expenses of professionals retained by the Debtor,
in an amount equal to the professional's retainer a proposed $5,000
per month through the termination of the Debtor's right to use cash
collateral or the conversion of the case to a case under Chapter 7
for any additional professional fees to be agreed upon.
The Debtor's right to use cash collateral expires on the earliest
to occur of (a) 90 days after the Petition Date unless a final
order approving the use of cash collateral has been entered; (b)
the dismissal of the Case or the conversion of any of the same to a
case under chapter 7 of the Bankruptcy Code; (c) the appointment of
an examiner with expanded powers or any other representative with
expanded powers in place of the Debtor; (d) the occurrence of the
effective date or consummation date of a plan of reorganization for
the Debtor; (e) the entry of an order of the Bankruptcy Court
approving the terms of any debtor-in-possession financing for the
Debtor; or (f) entry of an order reversing, staying, vacating or
otherwise modifying in any material respect the terms of the
Order.
A copy of the order is available at https://bit.ly/3sP0ygy from
PacerMonitor.com.
About College Cable Services, Inc.
College Cable Services, Inc. offers cable television and other
telecommunication services to colleges, universities and other
institutions. It provides a wide variety of fully managed services
including site design, installation, satellite delivered
programming, RF and IPTV services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Kent. Case No. 22-50401) on May 1,
2022. In the petition signed by Louis J. Santoro, secretary and
treasurer, the Debtor disclosed up to $10 million in both assets
and liabilities.
Judge Gregory R. Schaaf oversees the case.
Dinsmore & Shohl, LLP represents the Debtor as counsel.
COMPASS POINTS: Starts Chapter 11 Subchapter V Case
---------------------------------------------------
Single Asset Real Estate Compass Pointe Off Campus Partnership B
LLC filed for chapter 11 protection in the Eastern District of
California.
According to court documents, Compass Points Off Campus estimates
between 1 and 49 unsecured creditors. The petition states that
funds will not be available to unsecured creditors.
The meeting o creditors under 11 U.S.C. Sec. 341(a) is slated for
June 15, 2022 at 10:00 AM. Proofs of claim are due by Sept. 13,
2022.
About Compass Points
Compass Points Off Campus Partnership B LLC is a Single Asset Real
Estate (as defined in 11 U.S.C. Sec. 101(51B)).
Compass Pointe Off Campus Partnership B LLC sought relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal.
Case No. 22-10778) on May 8, 2022. In the petition filed by David
Sowels, as manager, Compass Pointe estimated assets up to $50,000
and liabilities between $1 million and $10 million and.
The case is handled by Honorable Bankruptcy Judge Jennifer E
Niemann.
The Debtor's counsel:
Noel Knight
510-435-9210
lawknight@hotmail.com
COOK & BOARDMAN: S&P Lowers ICR to 'B-' Due to Elevated Leverage
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
Winston-Salem, N.C.-based The Cook & Boardman Group LLC and its
rating on the company's $387 million ($367 million outstanding)
first-lien term loan B to 'B-' from 'B'. The recovery rating
remains '3'.
The stable outlook reflects our expectation that debt leverage will
remain elevated at 7x-8x in 2022, but contributions from
acquisitions and a rebound in commercial end markets could provide
some offset in 2023.
S&P said, "We expect debt leverage to improve but remain high at
about 7.5x in 2022. Cook & Boardman's debt leverage increased to
slightly above 9x in 2021, up from 8.5x in 2020 and we expect it to
improve toward 7x in 2022. As of March 31, 2022, adjusted leverage
is 8.8x. We expect revenues and EBITDA to increase 10%-15% and
20%-22% respectively in 2022, supported by a full year of
contributions from acquisitions ($65 million completed in 2021 and
$23 million so far in 2022) as well as good demand in some of its
end markets including education, health care, and hospitality,
which should offset some weakness in new commercial construction
markets. The company has a strong backlog and good visibility into
future earnings given that product installation typically occurs
toward the end of a project. However, the backlog can take up to 18
months to generate earnings given that there is a long lag between
winning bids and execution. In addition, high debt balances offset
the improvement and there is little cushion if commercial
construction end markets do not improve as we expect in 2023. Our
economists also assess the risk of recession in the next 12 months
at about 30%, with greater risk in 2023 which could pose a
reasonable (but not yet probable) risk to our base-case scenario.
"We expect free cash flow to be directed toward acquisitions over
debt reduction. Cook & Boardman has an acquisitive growth strategy
that has funded acquisitions with debt. The company completed eight
acquisitions in 2021 totaling $62 million and seven acquisitions in
2020 and 2019 totaling $90 million and $59 million, respectively.
As a result, adjusted debt increased 29% in 2020 and 16% in 2021 to
finish 2021 at about $433 million, outpacing EBITDA growth. Cook &
Boardman has already completed $23 million in acquisitions in the
first quarter of 2022. Any additional acquisitions would likely be
debt financed given our expectation for $8 million-$10 million in
free operating cash flows. We also believe the company will
continue to prioritize acquisitions over debt reduction and
therefore expect debt balances to remain high and that any
deleveraging will occur through EBITDA growth.
"Our assessment of Cook & Boardman's competitive position reflects
its leading market position, small but growing scale, narrow
product focus and average margins. Cook & Boardman is more than
twice the size of its nearest competitor but only has roughly 5%
share of the commercial door and door hardware space, which
reflects the highly fragmented nature of the industry. The company
continues to grow through acquisitions, increasing its revenue base
to $621 million in 2021 from $382 million in 2018. However, the
company is still small compared to our rated universe of building
materials companies and its product focus is also limited to the $7
billion commercial door distribution and solutions market. Cook &
Boardman derives its revenues from repair and remodel (55%) and new
construction (45%) end markets, which each have their own drivers
of market activity, providing some end-market diversity and
stability. The company has good customer diversification, with no
customer representing more than 2% of sales, with customers
including corporate entities, schools, hospitals, and correctional
institutions. Cook & Boardman's EBITDA margins are average for a
building materials distributor at 7.5%-8.5% given its highly
variable cost structure, with 70% of costs considered variable. The
company's scale and expertise also position it as a link between a
consolidated base of suppliers and a large, highly fragmented
customer base within the commercial door and hardware market.
"The stable outlook reflects our expectation that debt leverage
will remain high at 7x-8x in 2022, but contributions from
acquisitions and a rebound in commercial end markets could provide
some offset in 2023."
S&P could lower the ratings over the next 12 months if:
-- Liquidity continues to deteriorate such that its covenant
cushion tightens further.
-- S&P views the capital structure as unsustainable, exhibited by
adjusted leverage deteriorating further such that EBITDA interest
coverage approaches 1x or free cash flow remains negative.
-- The company pursues large debt-funded acquisitions or dividends
that result in leverage trending higher than its base-case
assumption.
S&P could raise the ratings over the next 12 months if Cook &
Boardman outperforms its base-case assumptions such that it
decreases and sustains adjusted leverage below 7x. This could occur
if:
-- The rebound in commercial construction occurs faster than we
anticipate such that EBITDA increases 8%-9% from our base-case
assumption.
-- The company directs free cash flows toward debt reduction over
acquisitions.
ESG credit indicators: E-2,S-2,G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of Cook & Boardman. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects their generally finite holding periods and a focus on
maximizing shareholder returns."
COSMOS HOLDINGS: Posts $203K Net Income in First Quarter
--------------------------------------------------------
Cosmos Holdings Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $203,347 on $13.07 million of revenue for the three months ended
March 31, 2022, compared to a net loss of $2.17 million on $11.62
million of revenue for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $49.77 million in total
assets, $39.17 million in total liabilities, $5.45 million in
mezzanine equity, and $5.15 million in total stockholders' equity.
As of March 31, 2022, the Company had working capital of
$11,831,133 compared to $10,950,492 as of Dec. 31, 2021.
The Company had cash of $1,010,427 versus $286,487 as of March 31,
2022 and December 2021, respectively. The Company had net cash
used in operating activities of $2,337,276 and $665,339 for the
three months ended March 31, 2022 and 2021, respectively. The
Company has devoted substantially all of its cash resources to
expand through organic business growth and has incurred significant
general and administrative expenses in order to enable the
financing and growth of its business and operations.
The Company had net cash provided by investing activities of
$94,550 and net cash used in investing activities of $2,310 during
the three months ended March 31, 2022 and 2021, respectively. For
the three months ended March 31, 2022 the net cash provided by
investing activities was mainly attributable to the proceeds from
the loan receivable from a third party.
The Company had net cash provided by financing activities of
$2,914,441 versus $380,118 during the three months ended March 31,
2022 and 2021, respectively. The net cash increase in the 3-month
period ended om March 31, 2022 is mainly attributable to the net
proceeds of $5,452,300 of the preferred stock offering on Feb. 28,
2022 less the payments made for the loans and notes payable.
For the period ended March 31, 2022, the Company also received
proceeds from lines of credit of $5,779,114 and payments of lines
of credit of $6,244,162, for a net decrease on the line of credit
of $465,048.
"We anticipate using cash in our bank account as of March 31, 2022,
cash generated from debt or equity financing, from investing
activities or from management loans, to the extent that funds are
available to do so to conduct our business in the upcoming year.
Management is not obligated to provide these or any other funds.
If we fail to meet these requirements, we may lose the
qualification for quotation and our securities would no longer
trade on the over-the-counter markets. Further, as a consequence
we would fail to satisfy our reporting obligations with the
Securities and Exchange Commission ("SEC"), and investors would
then own stock in a company that does not provide the disclosure
available in quarterly and annual reports filed with the SEC and
investors may have increased difficulty in selling their stock as
we will be non-reporting."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001474167/000147793222003590/cosm_10q.htm
About Cosmos Holdings
Cosmos Holdings Inc., together with its subsidiaries, is an
international pharmaceutical company with a proprietary line of
nutraceuticals and distributor of branded and generic
pharmaceuticals, nutraceuticals, over-the-counter (OTC) medications
and medical devices through an extensive, established EU and UK
distribution network.
Cosmos Holdings reported a net loss of $7.96 million for the year
ended Dec. 31, 2021, compared to net income of $820,786 for the
year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$49.43 million in total assets, $45.05 million in total
liabilities, and $4.38 million in total stockholders' equity.
San Francisco, California-based Armanino LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 15, 2022, citing that the Company has suffered
recurring losses and cash used in operations that raises
substantial doubt about its ability to continue as a going concern.
D&F RESOURCES: Files for Chapter 11 With $2M Debt to Lone Star
--------------------------------------------------------------
D&F RESOURCES LTD. filed for chapter 11 protection in the Western
District of Texas.
The Debtor filed schedules indicating $8.869 million in assets
against liabilities of $2.156 million, mostly on account of a
secured debt to Lone Star Bank of West Texas. The $2.155 million
debt to Lone Star is secured by the Debtor's oil and gas mineral
leasehold, valued at $4 million.
According to the statement of financial affairs, the Debtor had
revenue of $193,500 for the period Jan. 1, 2022 to May 6, 2022.
Revenue for calendar year 2021 was $555,700, compared with $593,700
in calendar year 2020.
According to court filings , D&F Resources Ltd. estimates between 1
and 49 unsecured creditors. The petition states that funds will be
available to unsecured creditors.
Dennis R. Cahill, the general partner, is the sole equity holder of
the Debtor.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is
slate for June 1, 2022, at 11:00 a.m.
About D&F Resources Ltd.
D&F Resources Ltd. sought Chapter 11 bankruptcy protection (Bankr.
W.D. Tex. Case No. 22-50491) on May 6, 2022. In the petition filed
by Dennis R. Cahill, general partner, D&F Resources estimated
assets between assets between $1 million and $10 million and
estimated liabilities between $1 million and $10 million. The case
is assigned to Honorable Bankruptcy Judge Michael M Parker.
DAYCO LLC: S&P Downgrades ICR to 'CCC' on Refinancing Risk
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Dayco LLC to
'CCC' from 'B-'. At the same time, S&P lowered its rating on the
first-lien term loan facility to 'CCC' from 'B-'. The recovery
score remains a '4', representing an average recovery (30%-50%;
rounded estimate: 35%).
The negative outlook reflects S&P's view that Dayco's capital
structure is unsustainable and ongoing credit market turbulence
increases the risk of payment default in the next 12 months.
Elevated refinancing risks and weak liquidity associated with the
debt becoming current put additional pressure on Dayco to navigate
an increasingly uncertain business environment. The funded ABL and
first-lien term loan facilities become due on May 19, 2023;
however, to the extent that the first-lien term loan remains
outstanding 75 days prior to this scheduled maturity date, any
outstanding borrowings under the ABL facility would become due and
payable on March 5, 2023. S&P said, "We expect Dayco will
increasingly depend on strained free cash flow and cash from the
balance sheet ($73 million as of April 30, 2022) to finance
operations. Regardless of Dayco's existing liquidity position, we
estimate that internal sources will be insufficient to service debt
repayment and other expected uses in full over the next 12 months
without the company completing a refinancing, meaningful maturity
extension, or executing on a strategic alternative. These factors
support our view of Dayco's weak liquidity and unsustainable
capital structure that could lead the company to pursue a financial
restructuring or distressed exchange that we would view as
equivalent to a default."
Despite recent improvement in Dayco's financial performance, cash
flow will remain under pressure in fiscal 2023. The performance
rebound was largely attributed to segment mix shift to
higher-margin aftermarket retail volumes, where Dayco has had
greater pass-through pricing success in comparison to the
higher-volatility OEM segment. A decline in volumes with retail
customers and sustained production volatility in the automotive OEM
channel could depress EBITDA margins and cause free cash flow to
become even tighter and possibly negative in fiscal 2023.
S&P said, "The negative outlook reflects Dayco's near-term debt
maturities that represent capital structure challenges, which we
view as unsustainable and could be further impacted by
macroeconomic developments, including the continuation of supply
chain disruptions or tightening credit markets."
S&P could lower its rating on Dayco if:
The company is unable to effectively address the upcoming debt
maturities in a timely manner as this would meaningfully increase
the risk of default, distressed exchange, or redemption absent
unanticipated significantly favorable changes.
S&P could raise its rating on Dayco if:
-- The company addresses its upcoming debt maturities through
completing a refinance of the ABL and first-lien facilities that
results in the creditors receiving full value as promised, which
would reduce the risk of a credit or payment crisis over the next
12 months; and
-- Dayco's free cash flow steadily improves, which could occur
assuming the aftermarket sales volumes remain stable and the return
of OEM sales volumes would provide increased operating leverage.
DEMO REALTY: May Access Cash Collateral Thru June 6
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Demo Realty Co., Inc. to use cash collateral through
June 6, 2022, under the same terms and conditions as the prior
orders.
A hearing on the Debtor's continued cash collateral access is set
for June 6 at 10 a.m. via Zoom.
A copy of the order is available for free at https://bit.ly/3894cuw
from PacerMonitor.com.
About Demo Realty Co.
Demo Realty Co., Inc., is an affiliate of Patriots Environmental
Corp., a company engaged in site development and remediation,
asbestos abatement, and general demolition.
Demo Realty filed a Chapter 11 petition (Bankr. D. Mass. Case No.
20-40159) on Jan. 31, 2020. In the petition signed by Ronald H.
Bussiere, president, the Debtor was estimated to have up to $50,000
in assets, and between $1 million and $10 million in liabilities.
Judge Elizabeth D. Katz oversees the case.
The Law Office of Vladimir Von Timroth represents the Debtor.
DIGIPATH INC: Incurs $374K Net Loss in Second Quarter
-----------------------------------------------------
Digipath, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $373,596
on $604,735 of revenues for the three months ended March 31, 2022,
compared to net income of $18,201 on $633,160 of revenues for the
three months ended March 31, 2021.
For the six months ended March 31, 2022, the Company reported a net
loss of $663,921 on $1.30 million of revenues compared to a net
loss of $372,436 on $1.13 million of revenues for the same period
during the prior year.
As of March 31, 2022, the Company had $2.37 million in total
assets, $3.82 million in total liabilities, $333,600 in series B
convertible preferred stock, and a total stockholders' deficit of
$1.79 million.
As of March 31, 2022, the Company's balance of cash on hand was
$82,769, and the Company had negative working capital of $1,598,387
and an accumulated deficit of $18,615,574 resulting from recurring
losses.
Digipath said "We currently may not have sufficient funds to
sustain our operations for the next twelve months and we may need
to raise additional cash to fund our operations and expand our lab
testing business. As we continue to develop our lab testing
business and attempt to expand operational activities, we expect to
experience net negative cash flows from operations in amounts not
now determinable, and will be required to obtain additional
financing to fund operations through common stock offerings to the
extent necessary to provide working capital. We have and expect to
continue to have substantial capital expenditure and working
capital needs.
"The Company has incurred recurring losses from operations
resulting in an accumulated deficit, and, as set forth above, the
Company's cash on hand is not sufficient to sustain operations.
These factors raise substantial doubt about the Company's ability
to continue as a going concern. Management is actively pursuing
new customers to increase revenues. In addition, the Company is
currently seeking additional sources of capital to fund short term
operations. In the event sales do not materialize at the expected
rates, management would seek additional financing or would attempt
to conserve cash by further reducing expenses. There can be no
assurance that we will be successful in achieving these objectives,
becoming profitable or continuing our business without either a
temporary interruption or a permanent cessation. In addition,
additional financing may result in substantial dilution to existing
stockholders."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1502966/000149315222013814/form10-q.htm
About DigiPath
Headquartered in Las Vegas, Nevada, Digipath, Inc. --
http://www.digipath.com-- offers full-service testing lab for
cannabis, hemp and ancillary cannabis and hemp infused products
serving growers, dispensaries, caregivers, producers, patients and
eventually all end users of cannabis and botanical products.
Digipath reported a net loss of $686,503 for the year ended Sept.
30, 2021, compared to a net loss of $2.31 million for the year
ended Sept. 30, 2020. As of Dec. 31, 2021, the Company's balance
of cash on hand was $90,305, and the Company had negative working
capital of $1,320,360 and an accumulated recurring losses of
$18,241,978.
Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
Dec. 29, 2021, citing that the Company has recurring losses from
operations and insufficient working capital, which raises
substantial doubt about its ability to continue as a going concern.
DIOCESE OF CAMDEN: Asks Court to Hear Insurer Deal With Plan
------------------------------------------------------------
Vince Sullivan of Law360 reports that the bankrupt Diocese of
Camden told a New Jersey judge Friday, Nay 20, 2022, that he should
hear arguments over a proposed but abandoned $30 million settlement
with insurers at the same time he is considering confirmation of
the debtor's Chapter 11 plan centered on a new deal with sex abuse
claimants.
The bankrupt Diocese of Camden wants its proposed $30 million deal
with insurers and its Chapter 11 plan wrapped into one court
proceeding.
About The Diocese of Camden, NJ
The Diocese of Camden, New Jersey is a nonprofit religious
corporation organized pursuant to Title 16 of the Revised Statutes
of New Jersey. The Diocese is the secular legal embodiment of the
Roman Catholic Diocese of Camden, a juridic person recognized under
Canon Law.
The Diocese of Camden sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020.
The petition was signed by Reverend Robert E. Hughes, vicar General
and vice president. At the time of the filing, the Debtor had
total assets of $53,575,365 and liabilities of $25,727,209. Judge
Jerrold N. Poslusny Jr. oversees the case. McManimon, Scotland &
Baumann, LLC, is the Debtor's legal counsel.
DUNWOODY LABS: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
Dunwoody Labs, Inc. asks the U.S. Bankruptcy Court for the Northern
District of Georgia, Atlanta Division, for authority to use cash
collateral on an interim basis and provide adequate protection.
The entities that may have an interest in the cash collateral are
Loanbuilder (a Paypal Service), Fox Capital Group, Inc., and the
United States Small Business Administration.
PayPal asserts a claim against the Debtor as evidenced by a
Business Loan Agreement dated March 30, 2022. The PayPal Agreement
provides for a $125,000 loan and a total loan fee of $15,236 to be
repaid via 52 weekly electronic funds transfers of $2,697 each with
a Total Repayment Amount of $140,236. The current balance of the
account is $134,842. The PayPal Agreement paid off a prior Business
Loan Agreement between the parties dated September 21, 2021, having
a Loan Amount of $75,000.
Fox Capital asserts a claim against the Debtor as evidenced by a
Future Receivables Sale and Purchase Agreement dated November 8,
2021 as may be subsequently amended. Under the deal, the Debtor
sells, assigns, and transfers to Fox Capital all of its future
accounts and receivables in consideration for a $105,000 purchase
price. The Purchased Amount is $144,900 and the Daily Remittance
is $724 payable via automatic electronic transfer. The current
balance of the account is $18,060.
The SBA provided an Economic Injury Disaster Loan to the Debtor
with an Effective Date of March 5, 2022 in the face amount of
$500,000. The EIDL Loan calls for installment payments of principal
and interest in the amount of $2,575 monthly to begin 24 months
from March 5, 2022. The balance of principal and interest will be
payable 30 years from March 5, 2022. The current balance of the
account is approximately $499,900.
The Debtor requires the use of cash collateral for payment of
operational and administrative expenses in substantially accordance
with the Budget.
The Debtor proposes to use cash collateral for the period
commencing on the Petition Date and ending on the earlier of the
following dates or events: (a) the appointment of a Chapter 11
Trustee; (b) the conversion of this Bankruptcy Case to a case under
Chapter 7 of the Bankruptcy Code; (c) the occurrence of a default
hereunder which remains uncured as provided herein; (d) the entry
of an order dismissing the Bankruptcy Case and such Order becoming
effective pursuant to its terms; or (e)further order of this
Bankruptcy Court.
As adequate protection, the Debtor proposes to provide creditors
with a replacement lien on all property of the kind and in the same
priority as their respective liens.
These events constitute an "Event of Default:"
a. The conversion or dismissal of the case; or
b. The appointment of a trustee or an examiner with expanded
powers in the case; and
c. Debtor's failure to comply with the Interim Order and the
Final Order.
A copy of the motion and the Debtor's budget for the period from
May 2022 to April 2023 is available at https://bit.ly/381qBd4 from
PacerMonitor.com.
The Debtor projects $3,930,000 in total income and $1,162,956 in
total expenses for the period.
About Dunwoody Labs, Inc.
Dunwoody Labs, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-53775) on May 17,
2022. In the petition signed by Gezim Agolli, chief executive
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Paul Reece Marr, Esq., at Paul Reece Marr, PC is the Debtor's
counsel.
EAGLE BEAR: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Eagle Bear Inc.
d/b/a St. Mary-Glacier Park KOA
106 West Shore Drive
St. Mary, MT 59417
Business Description: Eagle Bear operates RV (Recreational
Vehicle) Parks and recreational camping
ground resort.
Chapter 11 Petition Date: May 23, 2022
Court: United States Bankruptcy Court
District of Montana
Case No.: 22-40035
Judge: Hon. Benjamin P. Hursh
Debtor's Counsel: James A. Patten, Esq.
PATTEN PETERMAN BEKKEDAHL & GREEN
2817 2nd Avenue N, St 300
Billings, MT 59101
Tel: 406-252-8500
Fax: 406-294-9500
Email: apatten@ppbglaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Susan Brooke as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3SUM2UI/EAGLE_BEAR_INC__mtbke-22-40035__0001.0.pdf?mcid=tGE4TAMA
EDGEWATER HOLDINGS: Taps Cosculluela & Marzano as Special Counsel
-----------------------------------------------------------------
Edgewater Holdings Miami, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire
Cosculluela & Marzano, P.A. as its special counsel.
The firm will represent the Debtor in the case styled Edgewater
Holdings Miami, LLC v. Fortuna Holdings, LLC, et al. (Case No.
2021-027228-CA-44), which is pending in the Circuit Court of the
Eleventh Judicial Circuit in Miami-Dade County, Fla.
The firm has required a $270,000 advance payment.
Michael Cosculluela, Esq., a partner of Cosculluela & Marzano,
assured the court that the firm does not represent any interest
adverse to the Debtor or its estate.
The firm can be reached through:
Michael Cosculluela, Esq.
Cosculluela & Marzano, P.A.
7975 NW 154th St STE 300
Miami Lakes, FL 33016
Phone: +1 305-828-1909
About Edgewater Holdings
Edgewater Holdings Miami, LLC is the owner of the Fortuna House
apartments in Miami, Fla.
Edgewater Holdings filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-10882) on Feb.
2, 2022, listing $5,037,200 in assets and $3,695,403 in
liabilities. Tarek Kirk Kiem serves as Subchapter V trustee.
Judge Laurel M. Isicoff oversees the case.
Carlos de Zayas, Esq., at Lydecker, LLP and Cosculluela & Marzano,
P.A. serve as the Debtor's bankruptcy counsel and special counsel,
respectively.
ENSTROM HELICOPTER: Chapter 7 Sale Saves Business, 70+ Jobs
-----------------------------------------------------------
Acting as legal counsel for the Chapter 7 trustee, attorneys from
Warner Norcross + Judd LLP worked to broker the sale of the Enstrom
Helicopter Corp. to entrepreneur Chuck Surack of Surack Enterprises
in less than four months.
The speed of the process and the concerted actions of all involved
enable Enstrom, which designs and manufactures helicopters for
commercial, government and personal use, to continue operating as a
going concern from its headquarters in Menominee, Michigan.
"We appreciated the opportunity to work with Trustee Darrell
Dettmann, who quickly realized Enstrom wasn't a typical Chapter 7
bankruptcy filing where the business was being liquidated and the
assets sold to the highest bidder," explained Elisabeth M. Von
Eitzen, one of two Warner partners who led the transaction.
"Darrell recognized the value of the company wasn't in its
equipment, it was in the business itself as a going concern and
brought Warner into the story.
"Operations had ended in December 2021, with Enstrom filing for
bankruptcy protection on Jan. 21. We quickly recognized if this
was going to work, we needed to move quickly to prevent the
experienced team from leaving for other jobs. It's a true credit
to all involved that we were able to move through the process and
conclude the sale on May 13."
Von Eitzen and Stephen B. Grow, also a partner in Warner's
Bankruptcy, Restructuring and Insolvency Law Practice Group, led a
team of nine on what she called an "incredibly complex transaction
with intense time constraints." Some of the challenges included:
* The Federal Aviation Administration certifications, which were
essential to run the business but would not transfer to a new owner
and instead are dependent upon continuation of the same employees.
* Ownership and funding requirements under the Committee on
Foreign Investments in the U.S. regulations, which had the U.S.
Department of Justice paying close attention to potential buyers in
this highly regulated industry.
Tighter operational constraints required in Chapter 7 proceedings
rather than Chapter 11, which gives greater leeway to operating the
company while going through restructuring.
* The lack of a "stalking horse," or opening minimum bid, for
the sale, which meant the use of a "naked" auction among 40-plus
prospective buyers โ most of whom were auction companies
interested in stripping the plant and selling its assets rather
than operating it.
The auction's initial winning bidder deciding to bow out at the
11th hour โ a decision that ultimately paved the way for Surack's
team to come in and close the transaction in just five days.
"I am excited to have purchased this outstanding company that
manufactures helicopters here in the United States and employs
workers right here in the Midwest," Surack noted. "We strive to
create lasting job opportunities and resources that allow
communities like Menominee to thrive. I am honored to have been
part of this process and look forward to rebuilding the Enstrom
brand into one of the leading American-made helicopter
manufacturers."
Surack and his law firm, Carson LLP, had reached out to Warner
after the initial winning bid was announced to indicate his
interest if the first offer fell through. When it looked like that
was happening in early May, Von Eitzen and Grow reached back out to
Surack and Carson to gauge their interest. Working over the
weekend, Surack and his team came back on Monday with an initial
yes โ then worked to close the sale on May 13.
"It was a tremendous resolution," Von Eitzen said. "Everyone wanted
this to close, so any issue that came up we worked through.
Everyone worked to find a solution rather than a reason to say
no."
Menominee County Administrator Jason Carviou echoed this sentiment,
noting: "Enstrom Helicopter has been a cornerstone industry in
Menominee County for decades, providing benefits to the local
airport and good-paying jobs for our residents. They have gone
through several ownership changes, and we are happy to have them
back in the hands of an American company. We look forward to
Enstrom continuing to build helicopters in our community for
decades more to come."
About Warner
By providing discerning and proactive legal advice, Warner Norcross
+ Judd builds a better partnership with its clients. Warner is a
corporate law firm with 230 attorneys practicing in nine offices
throughout Michigan: Grand Rapids, Detroit, Midland, Macomb County,
Kalamazoo, Muskegon, Lansing, Holland and Bloomfield Hills. To
learn more, visit www.wnj.com, follow us on Twitter @WNJLLP or
connect on LinkedIn or Facebook.
About Surack Enterprises
Surack Enterprises passionately serves the Midwest by creating
lasting job opportunities and resources for the community to
thrive. Our businesses include The Clyde Theatre, The Club Room,
Crescendo Coffee & More, Sweet Aviation, Sweet Helicopters,
Aviation Specialty Insurance, Longe Optical, SweetCars, Lakeland
Internet, Sweet Real Estate and now the Enstrom Helicopter Corp.
About Enstrom Helicopter
Based in Menominee, Michigan, Enstrom Helicopter Corp. designs and
manufactures light, single-engine piston and turbine helicopters
for commercial, government, and personal use. From Rudy Enstrom's
early designs in 1943 to initial testing in a Michigan quarry in
1957 to aircraft operating on six continents, Enstrom Helicopter
has maintained a reputation for safety, value and performance. The
Company was later acquired by Chinese firm Chongqing Helicopter
Investment Corporation.
Enstrom Helicopter sought Chapter 7 protection (Bankr. W.D. Mich.
Case No. 22-90006-SWD) on Feb. 7, 2022.
The Chapter 7 trustee:
Darrell R. Dettmann
1207 Gray St.
Marquette, MI 49855
The Chapter 7 Trustee's counsel:
Stephen B. Grow
Warner Norcross + Judd, LLP
Tel: 616-752-2158
E-mail: sgrow@wnj.com
- and -
Elisabeth M. Von Eitzen
Warner Norcross + Judd LLP
Tel: 616-752-2418
E-mail: evoneitzen@wnj.com
FORTRESS TRANSPORTATION: Fitch Affirms 'BB-' IDR, Outlook Negative
------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Fortress Transportation and Infrastructure Investors LLC
(FTAI) at 'BB-'. The ratings have been removed from Rating Watch
Negative and a Negative Rating Outlook has been assigned.
Concurrently, Fitch has affirmed the unsecured debt rating at 'BB-'
and preference share rating at 'B'.
KEY RATING DRIVERS
IDR, SENIOR DEBT and PREFFERED SHARES
The removal of the Rating Watch reflects the expected improvement
in FTAI's leverage (gross debt to tangible equity with 50% equity
credit for preferred shares) following the spin of the
infrastructure business, which will result in the receipt of
approximately $800 million in cash. Proceeds will be used to repay
the senior secured bridge loan, revolving credit facility and a
portion of the senior unsecured notes due in 2025. Leverage, pro
forma for the spin, is expected to be 17.5x, based on March 31,
2022 financial data.
The Negative Outlook reflects execution risk associated with
reducing and sustaining leverage below Fitch's 6.0x downgrade
trigger, as further de-leveraging is contingent upon completing
$300 million of planned asset sales, receiving a portion of the
insurance claims related to assets held in Russia and Ukraine and
executing on core performance objectives. Failure to reduce and
sustain leverage below 6.0x over the next 12-24 months could result
in a ratings downgrade.
FTAI's ratings remain supported by its adequate scale in the
aircraft engine leasing industry; a diverse aviation fleet profile
with limited residual value risk; relatively consistent utilization
rates; solid historical cash flow generation; sufficient liquidity;
and a predominantly unsecured funding profile.
Rating constraints include the firm's relatively short operating
history; vulnerability to exogenous shocks, geopolitical risks and
sensitivity to elevated oil prices in the aircraft and engine
leasing segment; short-term engine leases that limit the magnitude
of contractual cash flows, and the company's high dividend payout
ratio.
FTAI is focused on end-of-life engines and seeks to maintain a
utilization rate in the 50%-75% range to ensure sufficient
inventory for customers looking for flexibility and short-term
leases. Utilization of the company's engine portfolio has benefited
from the post-pandemic market recovery and improved to 65% in 1Q22
from 56% a year before. The aircraft portfolio utilization rate of
85% at end-1Q22 compared to a historical average of 90%.
At end-1Q22, FTAI had 117 aircraft and 226 engines with a net book
value (NBV) of $2.1 billion, consisting largely of tier 2 and tier
3 aircraft and engines. Despite adequate geographical
diversification, Fitch believes that FTAI has high exposure to more
volatile markets compared to other lessors, potentially elevating
the firm's credit risk. FTAI's engine portfolio has a historical
weighted average remaining lease term of less than 1.5 years, which
exposes the firm to placement risk and reduces the magnitude of
contractual cash flows compared to aircraft leasing peers.
FTAI recorded $122.8 million of impairments in 1Q22, representing
6.5% of NBV, which reflected the write-off of the entire carrying
value of assets held in Ukraine and Russia. This compares to an
average impairment rate of 0.2% from 2018-2021. FTAI submitted $290
insurance claims in an effort to recover the value of aircraft and
engines located in those countries. FTAI reported $16.3 million in
gains in 1Q22 related to the sale of 14 engines; up from $15.5
million a year ago. FTAI has reported annual gains on aviation
asset disposals over the past five years, indicating prudent
residual value management and risk controls.
FTAI reported an operating loss in 1Q22 driven by $122.8 million of
impairment charges. Absent these one-time charges, the company's
earnings were down compared to 1Q21. Fitch expects asset quality to
improve as a result of the recovery in global aviation and
significant increase in activity and backlog in FTAI's aerospace
products.
FTAI has a favorable funding profile with 66% of debt being
unsecured at March 31, 2022. Post-spin, FTAI will continue to have
the ability to fund assets through its secured revolving facility,
but Fitch expects the company will maintain a largely unsecured
funding profile.
Fitch believes FTAI has an adequate liquidity profile without
significant capital commitments as it does not have any order book
commitments. The company had $145.3 million of cash at 1Q22, which
is augmented by the generation of operating cash. The next term
debt maturity is in December 2022 when $340 million of secured debt
is due. However, Fitch expects this debt to be repaid with proceeds
FTAI receives from the spin of the infrastructure business.
The unsecured debt rating is equalized with FTAI's Long-Term IDR
reflecting the unsecured funding mix and Fitch's expectation for
average recovery prospects in a stressed scenario.
FTAI's preferred share rating is two notches below the company's
Long-Term IDR reflecting the subordination and heightened risk of
non-performance of the instrument relative to other obligations.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- Failure to execute on asset sales, core operating performance
objectives, and collections on insurance claims, such that
leverage remains above 6.0x, could result in negative rating
action. The recognition of sizable aircraft and/or engine
impairments, higher repossession activity, difficulty re-
leasing aircraft at economical rates, and/or a reduction in
available liquidity could also adversely impact ratings.
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
Including Revision to Stable Outlook
-- Sustained improvement in balance sheet leverage below 6.0x, an
improvement in the level and consistency of FTAI's overall
profitability, maintenance of a predominantly unsecured
funding profile, and operating cash flow in excess of dividend
distributions could yield positive rating momentum. Strong
risk management and credit performance through a full credit
cycle would also be viewed favorably longer-term;
-- The unsecured debt rating is primarily sensitive to changes in
FTAI's Long-Term IDR and secondarily to the level of
unencumbered balance sheet assets relative to outstanding
debt. A decline in the level of unencumbered asset coverage
and/or a material increase in the use of secured debt, could
result in the notching of the unsecured debt rating down from
the Long-Term IDR;
-- The preferred share rating is primarily sensitive to changes
in FTAI's Long-Term IDR and is expected to move in tandem.
However, the preferred share rating could be downgraded by an
additional notch to reflect further structural subordination
should the firm consider other hybrid issuances.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
GAUCHO GROUP: Incurs $2.3 Million Net Loss in First Quarter
-----------------------------------------------------------
Gaucho Group Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.27 million on $425,597 of sales for the three months ended
March 31, 2022, compared to a net loss of $1.14 million on $275,039
of sales for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $25.16 million in total
assets, $10 million in total liabilities, and $15.16 million in
total stockholders' equity.
As of March 31, 2022, the Company had cash and a working capital
deficit of $977,611 and $2,788,934, respectively. During the three
months ended March 31, 2022 and 2021, the Company used cash in
operating activities of $2,099,246 and $2,075,085, respectively.
The Company expects that the cash on hand plus additional cash from
the sales of common stock under its equity line of credit agreement
will fund its operations for a least 12 months after the issuance
date of these financial statements.
Gaucho Group said "Since inception, our operations have primarily
been funded through proceeds received in equity and debt
financings. We believe we have access to capital resources and
continue to evaluate additional financing opportunities. There is
no assurance that we will be able to obtain funds on commercially
acceptable terms, if at all. There is also no assurance that the
amount of funds we might raise will enable us to complete our
development initiatives or attain profitable operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1559998/000149315222013747/form10-q.htm
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned
subsidiaries, GGH invests in, develops and operates real estate
projects in Argentina. GGH operates a hotel, golf and tennis
resort, vineyard and producing winery in addition to developing
residential lots located near the resort. In 2016, GGH formed a new
subsidiary and in 2018, established an e-commerce platform for the
manufacture and sale of high-end fashion and accessories. The
activities in Argentina are conducted through its operating
entities: InvestProperty Group, LLC, Algodon Global Properties,
LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L.,
and Algodon Wine Estates S.R.L. Algodon distributes its wines in
Europe through its United Kingdom entity, Algodon Europe, LTD.
Gaucho Group reported a net loss of $2.39 million for the year
ended Dec. 31, 2021, a net loss of $5.78 million for the year ended
Dec. 31, 2020, and a net loss of $6.96 million for the year ended
Dec. 31, 2019. As of Dec. 31, 2021, the Company had $24.31 million
in total assets, $10.22 million in total liabilities, and $14.09
million in total stockholders' equity.
GIGAMON INC: Fitch Withdraws 'B' LongTerm IDR
---------------------------------------------
Fitch Ratings has withdrawn Gigamon Inc.'s Long-Term Issuer Default
Rating. The company recently refinanced their term loan with
private debt, thus Fitch will no longer receive information on the
company and must withdraw the rating for lack of sufficient
information.
The debt instrument or rating was taken private.
Rating Actions
Rating Prior
------ -----
Gigamon Inc. LT IDR WD Withdrawn B
senior secured LT WD Withdrawn BB-
KEY RATING DRIVERS
Key Rating Drivers do not apply as the ratings have been
withdrawn.
RATING SENSITIVITIES
Rating sensitivities do not apply as the ratings have been
withdrawn.
GODFREY ROSE: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Godfrey Rose Godfrey Rose LLC
525 Myrtle Avenue
Suite C-1
Brooklyn, New York 11205
Business Description: Godfrey Rose is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section 101
(51B)).
Chapter 11 Petition Date: May 23, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-41109
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Joshua Bronstein, Esq.
THE LAW OFFICES OF JOSHUA BRONSTEIN &
ASSOCIATES PLLC
114 Soundview Avenue
Port Washington, NY 11050
Tel: 516-698-0202
Email: jbrons5@Yahoo.com
Total Assets: $2,001,200
Total Liabilities: $1,229,932
The petition was signed by Eddie Doran as member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/44NKI3Q/GODFREY_ROSE_GODFREY_ROSE_LLC__nyebke-22-41109__0001.0.pdf?mcid=tGE4TAMA
HAN JOE RO: Gets Court Nod to Use Cash Collateral
-------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
authorized Han Joe Ro, LLC to use cash collateral on an interim
basis in accordance with the budget, pending a final hearing.
The Debtor requires the use of cash collateral to continue its
ongoing operations in the ordinary course of business, and avoid
disruption of operations.
As adequate protection for the Debtor's use of cash collateral,
Satyam Tumwater LLC and the U.S. Small Business Administration are
granted Replacement Liens in the Debtor's Postpetition Collateral.
The Replacement Liens constitute valid, perfected and enforceable
security interests and liens on the Postpetition Collateral of the
Debtor without further filing or recording of any document or
instrument or any other action, but only to the extent of cash
collateral used during the term of the Interim Order and any
diminution in value of prepetition collateral, and only to the
extent of the enforceability of the respective Secured Lender's
security interests in the prepetition collateral.
To the extent set forth under section 507(b) of the Bankruptcy
Code, all obligations subject to the Replacement Liens will have
priority in payment over all other administrative expenses of the
estate, to the extent that the Replacement Liens are insufficient
to compensate the Secured Lenders for any diminution in the value
of their interests as a result of the Debtor's use of cash
collateral.
The Replacement Liens will at all times be subject to a carveout
for the payment of (i) allowed fees and expenses of professionals
whose appointment and compensation has been approved by the Court,
and (ii) fees due and owing to the Clerk of the Court and the
Office of the United States Trustee pursuant to 28 U.S.C. section
1930.
A final hearing on the matter is scheduled for June 23, 2022 at 10
a.m.
A copy of the order and the Debtor's budget for the period from May
8 to July 31, 2022 is available at https://bit.ly/3GdDEor from
PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$21,578 for the week starting May 8, 2022;
$3,897 for the week starting May 15, 2022;
$74,615 for the week starting May 22, 2022;
$19,135 for the week starting May 29, 2022;
$6,405 for the week starting June 5, 2022;
$25,253 for the week starting June 12, 2022;
$6,405 for the week starting June 19, 2022;
$216,054 for the week starting June 26, 2022;
$16,201 for the week starting July 3, 2022;
$13,936 for the week starting July 10, 2022;
$6,008 for the week starting July 17, 2022;
$91,567 for the week starting July 24, 2022; and
$11,559 for the week starting July 31, 2022.
About Han Joe Ro, LLC
Han Joe Ro, LLC is owned and operated by Cham Joe Ro and her
husband, In Kook Ro. Han Joe Ro operates two adjacent properties
which share one parking lot. Until recently, both properties were
operated as hotel franchises.
The OYO Hotel Tumwater, located at 1600 74th Avenue SW, Tumwater,
WA 98501, is a 59-room limited service hotel constructed in 1999
and situated on a 1.81 acre site. Beginning in September 2020, the
OYO Hotel contracted with Thurston County for temporary use of the
entire facility as a COVID-19 recovery center. That contract
terminated on February 28, 2022, and the property has resumed its
normal operations as the OYO Hotel.
Formerly the Comfort Inn Conference Center Tumwater, the adjacent
premises located at 1620 74th Avenue SW, Tumwater, WA 98501 is a
58-room hotel property with conference facilities constructed in
2001 and situated on a 2.14 acre lot. The franchise agreement with
Choice Hotels was terminated at the end of February 2022. On March
1, 2022, the Leased Hotel entered into a lease with the State of
Washington, Department of Health, which initially ran through the
end of 2022 but was amended to run through April 30, 2027, and may
be renegotiated for an additional five years.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-40597) on May 12,
2022. In the petition signed by Eric Camm, chief restructuring
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Richard B. Keeton, Esq, at Bush Kornfeld LLP is the Debtor's
counsel.
HOUSTON BLUEBONNET: Unsecureds Will Get 100% of Claims in 60 Months
-------------------------------------------------------------------
Houston Bluebonnet, LLC, submitted an Amended Chapter 11 Disclosure
Statement and Plan dated May 19, 2022.
Allyson Davis is the Attorney-In-Fact for Leslie Brinkoeter, the
managing member and sole owner of Houston Bluebonnet, L.L.C. As
such, Ms. Davis controls and operates the Debtor. The Debtor has
never paid any compensation to Ms. Davis. Accordingly, the Debtor
has not paid her any compensation before or during the pendency of
this chapter 11 case.
Since January 2014 and during the Debtor's chapter 11 case, Ms.
Davis has been the only person in control of the Debtor and has
overseen the day-to-day management of the Debtor. The Debtor does
not have any employees.
After the effective date of the order confirming the Plan, Ms.
Davis will remain in control of the Debtor, and Leslie Brinkoeter
will remain the managing member and sole owner of the Debtor.
Neither Ms. Davis nor Ms. Brinkoeter will receive a salary for
their services.
This Plan of Reorganization proposes to pay creditors from the
ongoing operation/liquidation of the Debtor's business.
Class 3 consists of Non-priority Unsecured Claims. Unsecured
creditors not entitled to priority and not specially classified
shall comprise a single class of creditors. Allowed claims shall be
paid 100% of the allowed amount of their claim over the term of
this plan, a pro rata. The Debtor retains the absolute right to
prepay all, or a portion, of the outstanding debt to Class 3 at any
time, without penalty. Class 3 will not be paid interest on their
claims. Class 3 is unimpaired.
Class 4 consists of Equity Interests of the Debtor. The member and
manager interests in the Debtor shall remain unaffected by this
Plan. Class 4 is unimpaired.
The Debtor will continue to manage and operate its oil/gas fields,
and will utilize the income to fund the plan. Funds will be
distributed to allowed claims in an orderly, pro-rata fashion. The
Debtor will have sufficient projected disposable income to fund the
payments required by this Plan.
The Debtor is assuming income equivalent to what has occurred over
the last sixty (60) months, which is approximately $6,600.00 per
month. The final Plan payment is expected to be paid on or before
the 60th month following the Effective Date.
A full-text copy of the Amended Disclosure Statement and Plan dated
May 19, 2022, is available at https://bit.ly/3wLOHke from
PacerMonitor.com at no charge.
About Houston Bluebonnet
Houston Bluebonnet, LLC, is a Texas limited liability company
formed Dec. 5, 2007. It owns and manages a working interest in two
producing oil and gas wells under an operating agreement for an
oil, gas and mineral lease covering 20 acres in Brazoria County,
Texas. The value of its working interest fluctuates with the price
of oil. As of the filing of its bankruptcy case, Houston Bluebonnet
valued its working interest at $90,000, based on the tax-assessed
value calculated from the sales in 2015.
Houston Bluebonnet filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Texas Case No. 16-34850) on Sept. 30, 2016. In the
petition signed by Allyson Davis, authorized representative, the
Debtor listed as much as $500,000 in both assets and liabilities.
Johnie Patterson, Esq., at Walker & Patterson, P.C. is the Debtor's
bankruptcy counsel. Gary E. Ellison, PC and Snelling Law Firm serve
as special counsels.
The Debtor filed its Chapter 11 small business plan and disclosure
statement on June 14, 2017.
INVEPA INTERNATIONAL: Seeks to Hire Meyer & Nunez as Legal Counsel
------------------------------------------------------------------
Invepa International, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to hire Meyer & Nunez,
P.A. as its legal counsel.
The firm's services include:
(a) advising the Debtor regarding its powers and duties and
the continued management of its business operations;
(b) advising the Debtor regarding its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) preparing legal documents;
(d) protecting the interest of the Debtor in all matters
pending before the court; and
(e) representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan.
As disclosed in court filings, Meyer & Nunez, P.A. is disinterested
as required by Section 327(a) of the Bankruptcy Code.
The firm can be reached through:
Robert C. Meyer, PA
Meyer & Nunez, PA
2221 Coral Way
Miami, FL 33145
Phone: (305) 285-8838
Fax: (305) 285-8919
Email: meyerrobertc@cs.com
About Invepa International
Invepa International is a Miami-based company engaged in renting
and leasing real estate properties.
Invepa International filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-12929) on April 15, 2022, listing as much as $10 million in both
assets and liabilities. Katiuska Vegas, member, signed the
petition.
Judge Robert A. Mark presides over the case.
Robert C. Meyer, Esq., at Meyer & Nunez, PA serves as the Debtor's
counsel.
INVEPA INTERNATIONAL: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Invepa International, LLC, according to court dockets.
About Invepa International
Invepa International LLC, a Miami-based company, sought Chapter 11
protection (Bankr. S.D. Fla. Case No. 22-12929) on April 15, 2022.
The Debtor estimated assets and debt of $1 million to $10 million
as of the bankruptcy filing.
The Hon. Robert A. Mark is the case judge.
Meyer & Nunez, P.A., led by Robert C. Meyer, Esq., is serving as
the Debtor's counsel.
INVO BIOSCIENCE: Incurs $2.8 Million Net Loss in First Quarter
--------------------------------------------------------------
INVO Bioscience, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.77 million on $162,598 of total revenue for the three months
ended March 31, 2022, compared to a net loss of $2.45 million on
$684,523 of total revenue for the three months ended March 31,
2021.
As of March 31, 2022, the Company had $8.52 million in total
assets, $2.93 million in total liabilities, and $5.59 million in
total stockholders' equity.
The Company stated "We have been dependent on raising capital from
debt and equity financings to meet our needs for cash to fund our
operating expenses and investing activities. During the first
three months of 2021, we received approximately $0.4 million of
proceeds from unit purchase option and warrant exercises. During
the first three months of 2022, we received proceeds of
approximately $0.3 million for the sale of our common stock. Our
current plan includes opening additional INVO Centers over the next
12 months. Until we can generate a sufficient amount of cash from
operations and to the extent additional funds are necessary to meet
our longer-term liquidity needs and to execute our business
strategy, we will need to raise additional funding, as in the past,
by way of debt and/or equity financings. Such additional funding
may not be available on reasonable terms, if at all.
"Although our audited financial statements for the year ended
December 31, 2021, were prepared under the assumption that we would
continue operations as a going concern, the report of our
independent registered public accounting firm that accompanies our
financial statements for the year ended December 31, 2021, contains
a going concern qualification in which such firm expressed
substantial doubt about our ability to continue as a going concern,
based on the financial statements at that time. Specifically, as
noted above, we have incurred significant operating losses and we
expect to continue to incur significant expenses and operating
losses as we continue to ramp up the commercialization of INVOcell
and develop new INVO Centers. These prior losses and expected
future losses have had, and will continue to have, an adverse
effect on our financial condition. If we cannot continue as a
going concern, our stockholders would likely lose most or all of
their investment in us."
Management Commentary
"We are pleased with the progress at our INVO Centers in
Birmingham, Atlanta and Monterrey," commented Steve Shum, CEO of
INVO. "In the first quarter, we witnessed significantly increased
patient flow at each center, which we believe will contribute to
growing treatment cycles in the coming periods. Based on the
typical timeframe it takes from patient inquiry, to consultation,
to initial diagnostic testing, to addressing patient-specific
timing issues, and to ultimately completing a treatment cycle, the
timeframe between initial patient contact to cycle completion can
range from 2 to 4 months or longer. We were also pleased to see
increased treatment cycles in the first quarter, which largely
represented patients that began this process in the prior quarter.
With respect to our INVO Center expansion plans, our development
team is making solid progress on identifying additional suitable
locations. As our INVO Center activities expand and demonstrate
positive results, we expect to have greater leverage in securing
favorable terms both for landlord buildout contributions and for
equipment and other leasing options. We are targeting these
opportunities to cover a growing portion of our INVO Center
start-up costs, and believe that, in time, they could fund over 50%
of these expenses. We were also pleased with the order flow from
our U.S. distribution business along with several international
market distributors, and we expect this will continue to expand
throughout the year."
"We remain enthusiastic about our multi-channel approach to
commercializing INVOcell," continued Shum. "Our INVO Center model
allows us to capture a significantly larger percentage of the
per-cycle IVC procedure revenue enabled by the INVOcell and
provides attractive economics for our shareholders, medical
practitioner partners and patients alike. Our international
distribution allows us to efficiently expand global adoption and
accelerates our efforts to address the fertility industry's biggest
challenges of cost and capacity. We look forward to continued
strength in both channels going forward."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001417926/000149315222013778/form10-q.htm
About INVO Bioscience
Sarasota, Florida-based INVO Bioscience, Inc. --
http://invobioscience.com-- is a medical device company focused on
creating simplified, lower-cost treatments for patients diagnosed
with infertility. The Company's solution, the INVO Procedure, is a
revolutionary in vivo method of vaginal incubation that offers
patients a more natural and intimate experience. Its lead product,
the INVOcell, is a patented medical device used in infertility
treatment and is considered an Assisted Reproductive Technology
(ART).
Invo Bioscience reported a net loss of $6.65 million in 2021, a net
loss of $8.35 million in 2020, a net loss of $2.16 million in 2019,
a net loss of $3.07 million in 2018, and a net loss of $702,163 in
2017. As of Dec. 31, 2021, the Company had $10.47 million in total
assets, $3.16 million in total liabilities, and $7.31 million in
total stockholders' equity.
Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 31, 2022, citing that the Company has suffered net losses
from operations and has a net capital deficiency, which raises
substantial doubt about its ability to continue as a going concern.
ISAGENIX WORLDWIDE: S&P Downgrades ICR to 'CCC', Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Isagenix Worldwide Inc. to 'CCC' from 'B-'. Concurrently, S&P
lowered its issue-level rating on the $30 million revolver due June
14, 2023 to 'B-' from 'B+'. The recovery rating remains '1'.
S&P said, "Our issue-level rating on the $375 million term loan due
2025 remains 'D' because we believe additional debt repurchases at
prices well below par are possible given the ongoing distressed
trading price.
"The negative outlook reflects the potential for a lower rating or
default at any time within the next 12 months if the company cannot
stabilize its distributor base or missteps occur repositioning the
business. We also forecast very little cushion under the maximum
leverage covenant, which applies to both its revolving credit
facility and term loan.
"We believe top-line performance, which was under some pressure in
the third quarter of 2021, declined materially over the subsequent
two quarters. We expect material revenue and EBITDA declines in
2022. The downgrade reflects the likelihood the company could
default absent an unforeseen positive development. The company is
facing significant challenges in managing its direct sales model as
pandemic benefits wane. While Isagenix reported a good first half
of 2021 due to increased focus on health and nutrition during the
pandemic, consumer demand declined rapidly in the second half in
conjunction with a decline in the distributor base. Increased
competition from more easily accessible products on Amazon.com and
other e-commerce platforms highlights the instability seen in the
multilevel marketing (MLM) industry and the company's lack of
significant competitive advantage. We expect depressed operating
performance this year, including double-digit percentage revenue
decline. We believe the company must make major strategic changes
to its business model to return to growth.
"We believe the company can remain in compliance with its financial
maintenance covenant over the next year, but the cushion is
tightening such that there is not much room for error or
operational missteps. Isagenix amended its credit agreement in 2021
to relax the financial maintenance leverage covenant on its
revolver and term loan. Our forecast indicates the company should
remain in compliance during the next 12 months; however, a cushion
of around 10% is low enough that a violation of the covenant could
occur if EBITDA generation falls short of our expectations. The
company's revolver matures in June 2023, and we cannot rule out the
possibility that Isagenix may have a difficult time extending this
maturity. We note the company recently drew down the remaining
availability under its revolver. Unless performance improves over
the next year, a credit event could occur in conjunction with
revolver negotiation. We also believe that a liquidity crisis,
possibly precipitated by a covenant violation, missed debt service
payment, or balance sheet restructuring are all possible over the
next 12 months. We estimate that EBITDA will only moderately exceed
cash interest, capital expenditures (capex), and contractual term
loan principal amortization over the next year.
"The negative outlook reflects the potential for a lower rating at
any time over the next 12 months if, in our view, the risk of a
near-term default has increased, including a liquidity crisis,
missed debt service payment, further distressed debt repurchases,
or balance sheet restructuring. We could also lower our ratings if
the company's operating performance deteriorates more, leading to
weaker free cash flow generation and EBITDA interest coverage in
the low-1x area."
This could happen due to:
-- Further distributor and customer declines;
-- Increasing competition from the gig economy or Amazon, or
unsuccessful product launches; and
-- Failure to successfully execute any new strategic changes.
While very unlikely within the next 12 we could raise the ratings
if Isagenix's operating performance improves while successfully
retaining its customer and distributor base, such that EBITDA
interest coverage is sustained above 1.5x and the company maintains
more than 15% forecasted covenant cushion.
This could happen if:
-- The company curtails further losses of legacy distributors;
-- Costs continue to be taken out of the business;
-- New strategic changes are successfully implemented; and
-- The company makes a credible commitment to refrain from making
additional debt repurchases well below par.
ESG credit implications: E-2 S-2 G-2
JADE INVESTMENTS: Seeks Access to K&S Note's Cash Collateral
------------------------------------------------------------
Jade Investments, LLC asks the U.S. Bankruptcy Court for the
Southern District of West Virginia, for authority to use cash
collateral and provide adequate protection to K&S NOTE 1, LLC
Bank.
The Debtor requires the use of cash collateral to real estate
taxes, insurance and make necessary repairs.
The Debtor stipulates that K&S NOTE 1, LLC Bank holds a first
priority perfected lien on the cash collateral and the real
property located in Raleigh County, West Virginia, which are leased
to persons with modest incomes.
The total claim of K&S NOTE 1, LLC Bank, upon information and
belief, exceeds $1,000,000 and the Debtor estimates the value of
the business real property to be in the approximate sum of
$700,000.
The Debtor proposes that the secured creditor be given a
postpetition replacement lien on the Debtor's cash collateral,
including accounts receivable and future rents with adequate
protection payments which could be made monthly in the sum of
$3,500.
A copy of the motion is available at https://bit.ly/3LtPcFf from
PacerMonitor.com.
About Jade Investments
Jade Investments, LLC owns several residential rental properties in
Beckely, West Virginia. The Debtor sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 22-50044) on
May 17, 2022. In the petition filed by Joshua Conaway, managing
member, the Debtor disclosed up to $1 million in assets and up to
$10 million in liabilities.
Judge Mckay B. Mignault oversees the case.
Joseph W. Caldwell, Esq., at Caldwell and Riffee represents the
Debtor as counsel.
JINZHENG GROUP: Testa Appointed as New Committee Member
-------------------------------------------------------
The U.S. Trustee for Region 16 appointed Testa Capital Group as new
member of the official committee of unsecured creditors in the
Chapter 11 case of Jinzheng Group (USA) LLC.
The members of the committee are now composed of:
1. Betula Lenta, Inc.
David Park
800 West 6th Street, Suite 1250
Los Angeles, CA 90017
Phone: (213) 537-0158
Email: david@thecodesolution.com
2. The Phalanx Group, Inc.
Anthony Rodriguez
424 E. 1st Street, Unit #10
Los Angeles, CA 90015
Phone: (213) 494-8542
Email: anthony@phalanx.group
3. Testa Capital Group
620 Newport Center Dr., #1100
Newport Beach, CA 92660
Phone: (888) 724-7925 ext 301
Email: testacapitalgroup.com
About Jinzheng Group (USA)
Jinzheng Group (USA) LLC, owner of multiple properties in Los
Angeles County, Calif., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-16674) on Aug. 24,
2021, listing up to $50 million in both assets and liabilities.
Judge Ernest M. Robles oversees the case.
Shioda, Langley & Chang LLP serves as the Debtor's legal counsel.
The U.S. Trustee for Region 16 appointed an official committee of
unsecured creditors on Jan. 25, 2022. The committee is represented
by Pachulski Stang Ziehl & Jones, LLP.
KDA PROPERTIES: Nativ Hotel Slated for June 2022 Auction
---------------------------------------------------------
Lily O'Neill of the Business Den reports that LoDo's Nativ Hotel is
going up for auction next month, June 2022, and its largest
creditor wants nothing short of $7.9 million, according to court
records.
That might be challenging, since the 16,800-square-foot hotel and
nightclub at 1612 Wazee St. in LoDo has been on the market as
recently as last year for a lower asking price of $7 million.
An online auction for the four-story, 18-room property is set to
begin on June 6 through Ten-X Commercial and end two days later,
according to information available on LoopNet. Bidders need to
qualify in advance.
The auction is the result of last September 2021's Chapter 11
bankruptcy filing by Nativ Hotel owner KDA Properties.
"The auction was my suggestion very early on before we went the
legal route with our lender," Nativ co-owner Amin Suliaman told
BusinessDen. "If you do it on the right platform, it opens us up to
a national and international market. You know there are 10 guys in
Denver who are going to want the property because they understand
what it is, but hometown guys arenโt going to pay what you want
to get out of the property."
KDA Properties said in its September filing that it owed $9.6
million to four creditors. The bulk of the money, $8 million, was
owed to Chicago-based Pangea Mortgage Capital. Pangea initiated the
foreclosure process for the hotel building in December 2020.
Suliaman owns 49 percent of KDA Properties. Kenneth Ware, listing a
Centennial address, owns the other 51 percent. Ware is also the
entityโs second-largest creditor, owed $1.2 million for
โcapital investment,โ according to the filing.
Pangea, which did not respond to a request for comment, and KDA
Properties reached a stipulation agreement last month detailing the
planned auction. The Chicago firm said in the stipulation that that
auction must generate a minimum offer of $7.9 million, and $7.2
million of that sale will go to Pangea.
About KDA Properties LLC
Denver-based KDA Properties filed its voluntary petition for
Chapter 11 protection (Bankr. D. Colo. Case No. 21-14821) on Sept.
21, 2021, listing $11,610,138 in assets and $9,609,712 in
liabilities. Amin Suliaman, managing member of KDA Properties,
signed the petition.
Judge Elizabeth E. Brown oversees the case.
Jeffrey A. Weinman, Esq., at Weinman & Associates, P.C., and Allen
Vellone Wolf Helfrich & Factor, P.C., serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
KNOX CLINIC: Cottage Clinic Laid Off 5 Workers Without Notice
-------------------------------------------------------------
Samuel Lisec of Galesburg Register-Mail reports that a new report
shows that Galesburg Cottage Clinic laid off five medical staff on
April 29, 2022 without prior notice to patients, staff or the
ombudsman assigned to the clinic's bankruptcy proceedings.
The ombudsman Deborah L. Fish, a court-appointed official tasked
with assisting the resolution of complaints against businesses or
public entities, outlined her concerns in a report that examined
the status of patient care at the clinic from March 24 to May 12,
2022.
Fish wrote that the clinic's standard of communication, remaining
cash flow and the clinic's plan for after its lease ends next month
are all concerns that need to continue to be monitored.
On Dec. 27, 2021, Galesburg Cottage Hospital was informed it would
lose its Medicare provider agreement, which accounted for 72% of
its revenue, after the hospital was determined deficient of various
codes from the U.S Department of Health and Human Service's Centers
for Medicare and Medicaid Services.
The hospital closed on Jan. 8, 2021. CEO and owner of The Knox
Clinic Corporation, Dr. Sanjay Sharma, has since filed for
bankruptcy regarding the clinic in the eastern district of Michigan
-- the location of which was contested by an attorney representing
various former providers at the clinic.
Downsizing without notifying patients
Fish wrote that the five employees who were terminated included the
remainder of the medical staff of the Womenโs Health Clinic.
Those terminated included a physician assistant, two nurses, a
nurse practitioner and an assistant in the Family Practice portion
of the clinic.
The Galesburg Cottage Clinic now employs 24 people.
Fish noted that the physician assistant and family medicine nurse
practitioner had patients scheduled for the following week and
coming months. The scheduled patients were notified late Friday and
were left to reschedule with the Family Practice clinic or seek
services elsewhere.
The ombudsman noted that in an earlier report she had requested
communication improve from the Knox Clinic Corporation. But Fish
wrote that communication from the clinic remains an area of
concern, as it has been "reactive" to events instead of
"proactive."
"I have repeatedly advised the debtor that the staff and patients
must be made aware of the changes otherwise the rumor mills start
and staff will quit and patients will go elsewhere," Fish wrote.
"We are seeking a stable environment for patients and staff through
the confirmation and plan process."
Fish wrote she worked with the Knox Clinic Corporation to make
certain it provides upcoming patients with as much notice and
information as possible, including personal calls to all scheduled
patients in the upcoming two weeks, automated calls to patients
with scheduled appointments and letters to all patients of the
practice advising them of the changes and how to reschedule their
appointments or obtain their medical records.
Cottage clinic:Galesburg Cottage clinic to file for bankruptcy;
intends to remain open through process
A March 2022 operating report shows that the Knox Clinic
Corporation lost $104,284 that month and has over $3 million in
unpaid bills. This is despite the corporation projecting to receive
$1.8 million in income during the first 180 days of its bankruptcy
case.
The ombudsman noted that the corporation's cash flow needs to
continue to be monitored because of the clinic's continuous
downsizing.
"It is especially important to examine the downsizing effect on
cash-flow so as to not be caught off guard and not be able to make
payroll or purchase necessary supplies," Fish wrote. "Either of
these scenarios would have an immediate adverse effect on the
quality of patient care."
Fish also noted that the Knox Clinic Corporation has yet to hire a
third party collection agency to collect private pay and co-pay
receivables, which would increase the corporation's cash flow. The
March 2022 operating report shows that the corporation is owed
$436,877.
The ombudsman wrote that the corporationโs plan relies on these
collections and "it is imperative that the hiring process is
completed soon to stabilize and provide cash flow for play
payments."
Fish noted that The Knox Clinic Corporationโs lease on its only
remaining medical practice property ends on June 30, 2022. OSF
Healthcare System bought the property at 834 N. Seminary in April
2022.
Fish wrote that the corporation is "exploring a new location for
the clinic that is substantially smaller and more cost effective"
but that she has also requested the corporation create a plan to
notify patients of the new location or to assist patients obtain
tele-health services in the event the corporation does not continue
in a physical office.
Fish wrote โthere are many concerns the debtor needs to address
in the Transition Plan,โ including pending lab work, how the
debtor will notify patients, what the call center will say, what
the messages on the phone lines will say, what the Debtor will do
with paper medical records, how patients will be scheduled
appropriately and who will report results.
Medical records backlog resolved
Fish wrote she was pleased to report that as of May 12, 2022, the
number of unfulfilled medical records requests was down to two.
This number is down from over 1,500 unfulfilled requests
Fish wrote that the corporation "took this issue seriously" and
assigned additional staff to complete the outstanding requests.
At the end of the report, the ombudsman affirmed that "while there
are areas of concern, the debtor has taken action to address
issues."
Fish wrote that the corporation will continue to be closely
monitored but that patient care and the medical records department
is now operating at the same manner or better than it did before
the beginning of the bankruptcy case.
About Knox Clinic Corporation
Knox Clinic Corporation filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No.
22-40018) on Jan. 3, 2022, listing as much as $1 million in both
assets and liabilities. Judge Maria L. Oxholm oversees the case.
Robert Bassel, Esq., a practicing attorney in Clinton, Mich.,
represents the Debtor in its Chapter 11 case.
LATAM AIRLINES: Spurned Creditors Decry Lender 'Extreme' Fratricide
-------------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that Latam Airlines Group
SA's bankruptcy exit proposal should be struck down because it's an
extreme example of the so-called lender-on-lender violence running
rampant in credit investing, a lawyer for a group of aggrieved
money managers said Friday, May 20, 2022.
The Chilean airline plans to raise some $5 billion by issuing
convertible notes and shares to its creditors and shareholders so
it can exit bankruptcy. A group of investment funds led by
SVPGlobal, Sculptor Capital Management and Sixth Street Partners is
in line to own Latam Airlines as a result.
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise. It is the largest passenger airline in South
America.
Before the onset of the COVID-19 pandemic, LATAM offered passenger
transport services to 145 different destinations in 26 countries,
including domestic flights in Argentina, Brazil, Chile, Colombia,
Ecuador and Peru, and international services within Latin America
as well as to Europe, the United States, the Caribbean, Oceania,
Asia and Africa.
LATAM and its 28 affiliates sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in
Chile, Peru, Colombia, Ecuador and the United States are part of
the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as
bankruptcy counsel, FTI Consulting as restructuring advisor, Lee
Brock Camargo Advogados as local Brazilian litigation counsel, and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. The Boston Consulting Group, Inc. and The Boston
Consulting Group UK LLP serve as the Debtors' strategic advisors.
Prime Clerk LLC is the claims agent.
The official committee of unsecured creditors formed in the case
tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters
Jureller Southard & Stevens, LLP as conflicts counsel, UBS
Securities LLC as investment banker, and Conway MacKenzie, LLC as
financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is
the committee's Brazilian counsel.
The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as
counsel.
Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew
Glenn and partner Shai Schmidt, has been retained as counsel to the
Ad Hoc Committee of Shareholders.
LATAM AIRLINES: Unsec. Creditors Say Plan Violates Bankruptcy Code
------------------------------------------------------------------
Akiko Matsuda of Dow Jones Newswire reports that Latam Airlines'
minority creditors say company's Chapter 11 plan violates
Bankruptcy Code.
A group of Latam Airlines Group SA's unsecured creditors argued
before a bankruptcy judge Friday that the Chilean airline's
proposed chapter 11 exit plan should be struck down because it is
in violation of the bankruptcy code that mandates equal treatment
of similarly situated creditors, an assertion that Latam disputes.
The group's lawyer said the restructuring plan would pay major
creditors $743 million for backstopping a $5.44 billion capital
raise, making their recovery under the plan 60%, while the rate of
recovery for minority creditors would be about 32%.
Latam filed for chapter 11 in 2020 and is seeking court
confirmation for its restructuring plan, which would allow the
backstop creditors to get control of the company.
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise. It is the largest passenger airline in South
America.
Before the onset of the COVID-19 pandemic, LATAM offered passenger
transport services to 145 different destinations in 26 countries,
including domestic flights in Argentina, Brazil, Chile, Colombia,
Ecuador and Peru, and international services within Latin America
as well as to Europe, the United States, the Caribbean, Oceania,
Asia and Africa.
LATAM and its 28 affiliates sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in
Chile, Peru, Colombia, Ecuador and the United States are part of
the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as
bankruptcy counsel, FTI Consulting as restructuring advisor, Lee
Brock Camargo Advogados as local Brazilian litigation counsel, and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. The Boston Consulting Group, Inc. and The Boston
Consulting Group UK LLP serve as the Debtors' strategic advisors.
Prime Clerk LLC is the claims agent.
The official committee of unsecured creditors formed in the case
tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters
Jureller Southard & Stevens, LLP as conflicts counsel, UBS
Securities LLC as investment banker, and Conway MacKenzie, LLC as
financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is
the committee's Brazilian counsel.
The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as
counsel.
Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew
Glenn and partner Shai Schmidt, has been retained as counsel to the
Ad Hoc Committee of Shareholders.
LIBERATED SPECIALTY: In Talks w/ Creditors, to File Plan in August
------------------------------------------------------------------
Liberated Specialty Foods Inc. sought bankruptcy protection under
Subchapter V of Chapter 11 of the United States Bankruptcy
Code.
The Debtor is an Alabama corporation in the specialty food retail
business.
The petition states funds will be available to Unsecured
Creditors.
According to a status report, the Debtor's primary debt arises from
claims secured by its real and personal property. The Debtor is
negotiating with its creditors to reorganize its financial
obligations. Should restructuring
prove unsuccessful, Debtor plans to orderly liquidate its remaining
assets through the sale of its commercial property located at 9048
Segers Road, Madison, Alabama 35756, as well as all inventory,
equipment, machinery, and ixtures utilized in Debtor's day-to-day
business operations.
Counsel for the Debtor has conferred with the Trustee as to the
case. Additionally, the Debtor's counsel has conferred with counsel
for the First Bank of the Lake of Ozarks, which has a lien upon
both the real and personal property of the Debtor. The Debtor
anticipates working with counsel for First Bank of the Lake to
formulate a plan that provides either for the reorganization or
liquidation of the Debtor's assets.
The Debtor will seek input from the Subchapter V trustee, as well
as contact and solicit consent from its creditors, in an effort to
attain a consensual plan.
Finally, the Debtor anticipates timely filing its plan on or before
August 4, 2022.
About Liberated Specialty Foods
Liberated Specialty Foods Inc. --
https://liberatedspecialtyfoods.com/ -- produces convenient food
products for specialty diets like GMO free, GAPS, SCD, lactose
free, gluten free, grain free, and much more.
Liberated Specialty Foods filed a petition under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No.
22-80777) on May 6, 2022, listing up to $100,000 in assets and up
to $1 million in liabilities.
Linda B. Gore was appointed as Subchapter V trustee.
Judge Clifton R. Jessup, Jr. oversees the case.
Kevin D. Heard, Esq., at Heard, Ary & Dauro, LLC, represents the
Debtor.
LTL MANAGEMENT: Plan Exclusivity Period Extended to Sept. 9
-----------------------------------------------------------
LTL Management, LLC has been given more time to file its plan for
emerging from Chapter 11 protection.
Judge Michael Kaplan of the U.S. Bankruptcy Court for the District
of New Jersey extended the exclusivity periods for the company to
file a Chapter 11 plan of reorganization and solicit acceptances
for the plan to Sept. 9 and Nov. 8, respectively.
The extension will give LTL Management more time to negotiate and
finalize a consensual plan that resolves the company's Chapter 11
case, according to its attorney, Paul DeFilippo, Esq., at Wollmuth
Maher & Deutsch, LLP.
"This chapter 11 case is not only large but highly complex. As of
the petition date, there were tens of thousands of talc-related
personal injury lawsuits pending against [LTL Management] in courts
across the country," Mr. DeFilippo said.
"The process of reaching an equitable resolution of [LTL
Management's] talc liability, and addressing the various other
talc-related issues that must be resolved in formulating a
consensual plan of reorganization, are necessarily complicated,"
the attorney further said.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It is the world's largest and most broadly
based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
The corporation had worldwide sales of $82.6 billion in 2020.
MAJESTIC HILLS: Plan and Disclosures Due May 27
-----------------------------------------------
NVR, Inc. d/b/a Ryan Homes ("NVR") and North Strabane Township (the
"Township") moved for entry of an order further extending the
deadlines to file an amended plan and disclosure statement, along
with the related solicitation and plan deadlines of the recent
Order, by an additional two weeks.
At the behest of NVR, and Township, as movants and plan proponents,
the Court has entered an order further extending the deadlines to
file an amended plan and disclosure statement, along with the
related solicitation and plan deadline, by an additional 2 weeks,
as follows:
a. Movants, as the "Plan Proponents," shall file an amended plan
and disclosure statement by May 27, 2022.
b. If all known parties to the case have agreed to the
solicitation of the plan and a combined hearing to address the
disclosure statement and plan, the Plan Proponents shall file a
certification of counsel to that effect. The certification of
counsel shall include a proposed scheduling order setting the
following deadlines:
i. June 1, 2022, as the deadline for the Plan Proponents to
serve (1) the solicitation package (containing the scheduling
order, the plan, disclosure statement, and ballot) on parties
entitled to vote on the plan, and (2) a hearing notice on all other
creditors and parties in interest entitled to notice of the
combined disclosure statement and confirmation hearing;
ii. June 29, 2022, as the last day for any party to file
written objections to the plan;
iii. June 29, 2022, as the deadline to cast a ballot in support
or in opposition to the plan;
iv. July 1, 2022, as the deadline for the Plan Proponents to
file a ballot summary; and
v. July 5, 2022, at 12:00 p.m. EDT as the deadline for the
Plan Proponents to file an optional reply to any plan objections.
Parties who intend to present evidence or examine witnesses at the
confirmation hearing must be present in the courtroom, but any
other party may participate via Zoom.
c. To the extent it is apparent that consensus cannot be
obtained on a solicitation, vote tabulation, or other
process-related issues, the Plan Proponents shall file a
solicitation motion by no later than May 24, 2022, at 4:00 p.m. If
a motion is filed, a hearing would be conducted to consider the
motion on May 27, 2022, at 11:00 a.m. Any response or objection to
the motion shall be filed by no later than May 26, 2022, at 4:00
p.m. The hearing will be held in Courtroom A, 54th Floor, U.S.
Steel Tower, 600 Grant St., Pittsburgh, PA 15219. Parties may
appear at the hearing via Zoom in compliance with Judge Taddonio's
Procedures.
The Movants, as the Plan Proponents, have met and conferred with
the known parties to discuss comments on and issues with both the
Disclosure Statement and the Plan, and the related process issues,
and have endeavored to reasonably address the same in good faith.
Since the Order was entered on April 29, 2022 extending the
deadlines set in the prior Order, the Plan Proponents have
continued to make progress, particularly with respect to matters
concerning the PA DEP; however, additional time is needed to file
the amended disclosure statement and plan. Good faith, productive
conversations are ongoing and it is hoped that all issues may be
resolved in the next two weeks.
The Committee, Debtor, and PA DEP who participated in the April 26,
2022 conference call, and have participated in subsequent
negotiations, have consented to the extension of time sought herein
in the course of working toward the filing of the amended
disclosure statement and plan.
As described in the prior Expedited Joint Motion, the number of
creditors to be noticed and solicited for approval of the
disclosure statement and plan is relatively small. Moreover, the
Debtor is no longer operating, no longer owns the subject real
property, and the plan represents the best opportunity for
maximizing recoveries for creditors while preserving estate
assets.
Plan Proponents anticipate agreement with the main parties on
classification and solicitation, and anticipate being able to file
a certification of counsel.
The Ice Miller Attorneys, along with Pennsylvania co-counsel, have
been working diligently to negotiate the disclosure statement and
amended plan, and related process issues; however, the Ice Miller
Attorneys are working with short timeframes having been involved
with this case for approximately only one and a half (1.5) months,
in a case that has been pending for almost two years.
The Movants believe that it is in the best interest of the estate
to extend the deadlines to file an amended plan and disclosure
statement, along with the related solicitation and plan deadlines
entered on April 29, 2022, to allow the parties additional time to
attempt to reach agreement on the solicitation of the amended plan
and a combined hearing on the amended disclosure statement and
plan, along with the terms of the amended disclosure statement and
plan.
The extension of time will serve to build upon the progress made
since the Ice Miller Attorneys became involved in this case with
the goal of preserving and maximizing value for the estate and its
creditors.
Counsel to NVR, Inc., and Township of North Strabane:
Kathleen A. Gallagher, Esq.
Russell Giancola, Esq.
GALLAGHER GIANCOLA LLC
3100 Koppers Building
426 Seventh Avenue
Pittsburgh, PA 15219
Tel: (412) 717-1920
Tel: (412) 717-1921
Email: kag@glawfirm.com
rdg@glawfirm.com
- and -
Louis T. DeLucia, Esq.
Alyson M. Fiedler, Esq.
Michael W. Ott, Esq.
ICE MILLER LLP
1500 Broadway, Suite 2900
New York, New York 10036
Tel: (212) 835-6312
Tel: (212) 835-6315
Tel: (312) 726-7103
Email: Louis.DeLucia@icemiller.com
Alyson.Fiedler@icemiller.com
Michael.Ott@icemiller.com
About Majestic Hills
Majestic Hills, LLC, a privately held company that owns certain
property in Pennsylvania, filed a Chapter 11 petition (Bankr. W.D.
Pa. Case No. 20-21595) on May 21, 2020. At the time of filing, the
Debtor was estimated to have $1 million to $10 million in assets
and liabilities. The Hon. Gregory L. Taddonio oversees the case.
The Debtor's counsel is Donald R. Calaiaro of Calairo Valencik.
MALLINCKRODT PLC: Will Issue $650M First Lien Senior Secured Notes
------------------------------------------------------------------
On Oct. 12, 2020, Mallinckrodt plc, an Irish public limited company
in examination under Part 10 of the Companies Act 2014 of Ireland,
and certain of its subsidiaries voluntarily initiated proceedings
under chapter 11 of title 11 of the United States Code in the U.S.
Bankruptcy Court for the District of Delaware.
On Feb. 3, 2022, the Bankruptcy Court issued an opinion (which was
subsequently revised on Feb. 8, 2022 to make minor corrections)
stating its intention to confirm Mallinckrodt's Fourth Amended
Joint Plan of Reorganization of Mallinckrodt Plc and Its Debtor
Affiliates Under Chapter 11 of the Bankruptcy Code.
Also as previously disclosed, on March 2, 2022, the Bankruptcy
Court entered an order confirming the Fourth Amended Joint Plan of
Reorganization (with Technical Modifications) of Mallinckrodt Plc
and Its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code.
Also as previously disclosed, on Feb. 14, 2022, the directors of
Mallinckrodt initiated examinership proceedings before the High
Court of Ireland, and on February 28, 2022, the Irish High Court
made an order appointing Mr. Michael McAteer of Grant Thornton
Ireland as examiner of Mallinckrodt. Also as previously disclosed,
on April 27, 2022, the Irish High Court made an order pursuant to
Section 541(3) of the Companies Act of Ireland confirming a scheme
of arrangement proposed by the Examiner between Mallinckrodt, its
creditors and members, which is based on and consistent in all
respects with the Plan (the "Scheme") and also made an order
pursuant to Section 542(3) of the Companies Act of Ireland that the
Scheme shall become effective on the same date that the Plan
becomes effective. At such time, the Scheme will become binding on
Mallinckrodt, its creditors and members as a matter of the laws of
Ireland, the examinership proceedings will conclude, and
Mallinckrodt will cease to be under the protection of the Irish
High Court.
On May 20, 2022, in connection with the expected forthcoming
effectiveness of the Plan (and, by extension, the Scheme),
Mallinckrodt agreed to principal, non-binding terms with certain
purchasers to issue $650 million in new first lien senior secured
notes, as set forth in a non-binding term sheet (such terms, the
"Term Sheet"). A copy of the Term Sheet is available for free at
https://www.sec.gov/Archives/edgar/data/1567892/000119312522156324/d334573dex991.htm
About Mallinckrodt PLC
Mallinckrodt -- http://www.mallinckrodt.com/-- is a global
business consisting of multiple wholly-owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case
No. 20-12522) to seek approval of a restructuring that would reduce
total debt by $1.3 billion and resolve opioid-related claims
against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins, LLP and Richards, Layton &
Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes &
Gray, LLP as litigation counsel; Torys, LLP as CCAA counsel;
Guggenheim Securities, LLC as investment banker; and AlixPartners,
LLP as restructuring advisor. Prime Clerk, LLC is the claims
agent.
The official committee of unsecured creditors retained Cooley, LLP
as its legal counsel; Robinson & Cole, LLP as co-counsel; and
Dundon Advisers, LLC as financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid-related claimants. The OCC tapped
Akin Gump Strauss Hauer & Feld, LLP as its lead counsel; Cole
Schotz as Delaware co-counsel; Province, Inc. as financial advisor;
and Jefferies, LLC as investment banker.
MEG ENERGY: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed MEG Energy Corporation's (MEG) Long-Term
Issuer Default Rating (IDR) at 'B+' and its senior unsecured notes
at 'BB-'/'RR3'. The Rating Outlook is Stable.
MEG's ratings reflect improving credit metrics, below average
refinancing risk, no bond maturities until 2027, abundant
liquidity, the expectation that the company will generate positive
FCF over the forecast period, improved transport logistics that
should lead to higher realized prices, and an improving cost
structure. This is offset by significant exposure to potentially
wide and volatile West Texas Intermediate (WTI) and Western
Canadian Select (WCS) spreads which have been seen in the past,
lack of diversification, and exposure to a challenging regulatory
environment managed by the Alberta and federal governments.
The Stable Outlook reflects MEG's conservative financial profile,
positive FCF will primarily be used to reduce debt and solid
liquidity profile.
KEY RATING DRIVERS
Strengthening Credit Metrics: Fitch expects continued improvement
in 2022 due to higher oil prices, tighter differentials and debt
reduction. MEG is prioritizing its stated strategy of using free
cash flow to repay debt. In April 2022, the company redeemed the
remaining US$171 million (approximately $214 million) 6.50% senior
secured second lien notes. The next maturity is the senior
unsecured bonds in 2027. Fitch believes that the company has the
capacity to continue to reduce debt. MEG has an undrawn C$800
million revolver, and Fitch expects the company to generate
positive FCF over the forecast period.
Balanced Debt and Distribution Strategy: Fitch expects debt
repayment to remain a priority in 2022 as MEG expects to achieve
its US$1.2 billion net debt target in Q3/22, at which point it will
increase its share buyback allocation of FCF from 25% to 50%. MEG
has set a level of US$600 million in net debt before 100% of FCF
will be allocated to shareholder returns. Under Fitch's Base Case
MEG is expected to achieve their US$600 million net debt target in
2024.
FCF Improvement: Historically, MEG generated large FCF deficits to
fund its growth objectives while also being subject to discounts to
WTI pricing. Fitch expects MEG to generate substantial FCF at
current prices. MEG's continued focus on shifting sales to the U.S.
Gulf Coast, cost reduction efforts, and relatively low capital cost
(approximately C$8-10/bbl) to sustain production levels should
allow the company to fund its capital program with operating cash
flow.
Improving Macro Outlook: Oil prices have improved substantially
with WTI now trading above US$95/bbl compared with US$68 in 2021
primarily due to demand rebounding following COVID-19 and
geopolitical tension with Russia's invasion of Ukraine. In
addition, light-heavy oil differentials have narrowed and are
likely to remain narrow in the short term due to increased takeaway
capacity and the lack of heavy oil supply from Latin America, which
is in strong demand by U.S. refiners with complex refining
capacity.
Growing Exposure to USGC: Fitch anticipates MEG will sell an
increasing portion of its production into the more valuable U.S.
Gulf Coast (USGC) and move away from the Western Canada market. MEG
currently has 100,000 barrels of oil per day (bbl/d) of committed
capacity on the Flanagan South/Seaway pipeline that transports
crude to the Gulf Coast. MEG's apportionment was 10% in Q1/2022
compared to 21% in Q4/2021, which will trend lower through the
forecast period which means the company can utilize more of its
total commitment at that time. Gulf Coast sales are expected to
account for two-thirds of 2022 total blend sales volume through the
pipeline, which should allow for a higher realized price for MEG's
products. The USGC market has an approximate $2.00 per barrel
premium to the Western Canadian market after considering
transportation costs in the current pricing environment.
Pipeline Political Risk: There has been substantial timing risk
around major pipeline projects in Canada, which have experienced
numerous delays due to entrenched social and environmental
opposition. The Trans Mountain Pipeline expansion (TNX) project
(over 590,000bbl/d) expected completion has been pushed back to
Q3/2023 from H2/2022. The proposed Keystone XL pipeline (over
830,000bbl/d) was terminated in June 2021. Pipeline delays were a
key factor in the collapse in WCS differentials in the fall of
2018, which led to the need for quotas. As stated above, additional
delays in new capacity could cause the return of quotas, create
additional project deferrals, and increase reliance on rail to move
product.
DERIVATION SUMMARY
Baytex Energy (B+/Stable) and Vermilion Energy Inc. (BB-/Stable)
are predominately Canadian producers with production of 80.2mboed
(81% liquids) and 84.4mboed (53% liquids) respectively, both of
which are less than MEG's production of 93.7 mboed (100% liquids).
Fitch expects MEG's annual production to grow to the 95,000 to
100,000 bbl/d range throughout the forecast period.
MEG has a higher oil cut and larger proved reserve base of 1.3
billion boe, which is materially higher than Baytex's reserves base
of 228mmboe and Vermilion's 268mmboe. In addition, MEG has no
near-term financing risk, is not expected to borrow off of its
CAD800 million revolver in the near term, and has a covenant-lite
revolver that is not subject to a borrowing base redetermination.
Baytex's next bond maturity is June 2024, and approximately 47% of
its credit facility is drawn at 2021 year-end.
MEG's netbacks are lower than its peers at CAD$29.7 per barrel of
oil equivalent (boe), which is 100% heavy oil exposed. Baytex has a
diverse asset base which provides exposure to Canadian heavy and
light oil and the relatively price-advantaged Eagle Ford,
contributing to a cash netback of CAD$32.1/boe. Similarly,
Vermilion benefits from exposure to higher priced international oil
and natural gas indices at CAD$41.6/boe for 2021. MEG's
diversification is low since it is essentially a single-play oil
sands producer. This leads to significant exposure to potentially
volatile WTI-WCS price differentials, in addition to the lack of
integration, particularly in relation to larger Canadian oil sands
operators such as Cenovus, Suncor Energy, and Canadian Natural
Resources Limited. Despite its lack of diversification, MEG has
substantial proved and probable reserves and has the ability to
greatly expand capacity if industry conditions are favorable.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Our Rating Case for the Issuer
-- Base case WTI oil prices of US$95/bbl in 2022, US$76/bbl in
2023, US$57/bbl in 2024 and US$50/bbl in 2025;
-- Base case Henry Hub natural gas price of US$4.25/mcf in 2022,
US$3.25/mcf in 2023, US$2.75/mcf in 2024 and US$2.50/mcf in
2025;
-- Production growth in the low single digits over forecasted
period;
-- Increase in blended sales through Gulf Coast pipeline versus
Edmonton pipeline sales;
-- Capex averaged CAD420 over the forecast period;
-- Per the company's shareholder returns strategy, an increasing
portion of FCF over the life of the cycle is used for share
repurchases.
Stress Case Assumptions and Price Deck:
-- WTI oil price of US$67/bbl in 2022, US$42/bbl in 2023,
US$32/bbl in 2024 and US$42/bbl in 2025;
-- Henry Hub natural gas price of US$3.50/mcf in 2022,
US$2.50/mcf in 2023, US$2.00/mcf in 2024 and US$2.25/mcf in
2025.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that MEG Energy would be reorganized
as a going-concern (GC) in bankruptcy rather than liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
MEG's GC EBITDA assumption reflects Fitch's projections under a
stressed case price deck, which assumes WTI oil prices of USD67.00
in 2022, USD42.00 in 2023, and USD32.00 in 2024 and USD$42 in
2025.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which we base the enterprise
valuation (EV). The GC EBITDA assumption uses 2025 EBITDA, which
reflects the decline from current pricing levels to stressed levels
and then a partial recovery coming out of a troughed pricing
environment.
The model was adjusted for varying differentials given the material
decline in the prices.
An EV multiple of 4.0x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value, resulting in a
valuation of C$2.6 billion. The choice of this multiple considered
the following factors:
The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x-7.0x, with an average of 5.6x and a
median of 6.1x;
There were very few recent Canadian M&A transactions and multiple
detail was either unavailable or not relatable;
Fitch uses a multiple of 4x, to estimate a value for MEG to reflect
the relatively higher proved reserves that reduces resource and
volumetric risks and provides for longer-term cash flow support
despite shorter-term market impacts.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Despite the lack of Canadian exploration and production peer
companies, the announced transaction in which Husky Energy combined
with Cenovus Energy for C$4.8 billion is a very strong comparison.
The value per production (boe) was approximately C$16,500, which
implies a valuation for MEG at C$2.0 billion. After including
accounts receivable and inventory and adjusting for foreign
exchange rates, the liquidation value was C$2.6 billion, less than
the going concern value.
Fitch uses the higher of the going concern and liquidation
approach, which is the going concern value in this case. The value
is allocated to investors according to the relative seniority of
their claims.
The revolver is assumed to be fully drawn upon default. The
revolver is a first lien and senior in the waterfall. MEG completed
the repayment of the second-lien notes on April 4, 2022. The
recovery of the senior unsecured notes remains at 'BB-'/'RR3'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Improved netbacks through lower and sustainable operating and
interest costs;
-- Improved outlook on realized prices and differentials;
-- Paydown of unsecured notes while maintaining mid-cycle
debt/EBITDA below 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Change in financial policy that weakens expected credit
metrics;
-- Mid-cycle debt/EBITDA above 3.5x;
-- Prolonged dislocation in WTI-WCS spreads.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity Position: MEG had C$290 million of cash on hand as
of March 31, 2022, which reduced down to $76 million on April 4,
2022 following the repayment of the second lien notes. The credit
facility consists of a C$800 million revolver and a C$500 million
letter of credit facility that matures on July 30, 2024. There is
no financial maintenance covenant unless the revolver is drawn in
excess of 50%, which would trigger a first-lien net debt/EBITDA
covenant of 3.5x or less. The next maturity is when the US$1.2
billion senior unsecured notes come due in February 2027.
ISSUER PROFILE
MEG is a Canadian oil sands producer focused on sustainable in situ
oil development. Its production was approximately 93,733 boepd in
2021. The company owns a 100% interest in 410 square miles of oil
sands leases in the Athabasca oil sands region of Alberta,
including a steam-assisted gravity drainage oil sands development
in Christina Lake.
ESG CONSIDERATIONS
MEG Energy has an ESG Relevance Score of '4' for Exposure to Social
Impacts, due to high exposure to pipeline and logistics takeaway
capacity, which has been delayed multiple times due to social
resistance to pipelines in Canada. This has widened the Canadian
oil price differential to record levels in the recent past, which
has a negative impact on the credit profile and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
MEGA-PHILADELPHIA: Wins Cash Collateral Access Thru July
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Fort
Myers Division, authorized Mega-Philadelphia LLC to use cash
collateral on an interim basis in accordance with the updated
budget, with a 10% variance.
The Debtor is permitted to use cash collateral to pay only their
ordinary and necessary business expenses as set forth on the
Budget. The Debtor believes the Updated Budget is a reasonable
estimate of reasonable, necessary, and foreseeable expenses to be
incurred in the ordinary course of business in connection with the
operation of its business for the period set forth in the Updated
Budget.
As adequate protection, the Alleged Secured Creditors are granted a
valid, perfected and enforceable security interest with the same
validity, to the same extent, and with the same priority as its
respective pre-petition liens.
The Replacement Liens granted: (i) are in addition to all security
interests, liens and rights of set-off existing in favor of the
Alleged Secured Creditors on the Petition Date; (ii) are valid,
perfected, enforceable and effective as of the date of the entry of
this Interim Order without any further action by the Debtor or the
Alleged Secured Creditors and without the necessity of the
execution, filing or recordation of any financing statements,
security agreements, mortgages or other documents; and (iii) will
secure the payment of indebtedness to the Alleged Secured
Creditors, as the case may be, in an amount equal to the aggregate
cash collateral used or consumed by the Debtor.
The Debtor will maintain all necessary insurance, including,
without limitation, fire, hazard, flood, comprehensive, public
liability, and workmen's compensation as may be currently in
effect, and obtain such additional insurance in an amount as is
appropriate for the business in which the Debtor is engaged.
A final cash collateral hearing is scheduled for July 18, 2022 at
1:30 p.m. via Zoom.
A copy of the order and the Debtor's budget for the period from May
to June 2022 is available at https://bit.ly/3MwryJB from
PacerMonitor.com.
The Debtor projects $515,000 in total income and $405,371 in total
expenses.
About Mega-Philadelphia and
M.S. Acquisitions
Mega-Philadelphia, LLC is a music and radio station business that
provides radio broadcasting services in Philadelphia, South New
Jersey, and Atlantic City, N.J. Based in Naples, Fla.,
Mega-Philadelphia generates advertisement revenue through broadcast
radio and live promotional events. M.S. Acquisitions & Holdings,
LLC is the 100% owner and sole member of Mega-Philadelphia.
Mega-Philadelphia and M.S. Acquisitions filed petitions under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Lead Case No. 22-00340) on March 25, 2022. Amy Denton Harris serves
as Subchapter V trustee.
In the petitions signed by Michael Sciore, chief executive officer,
Mega-Philadelphia listed $346,574 in assets and $2,285,961 in
liabilities while M.S. Acquisitions listed $196,427 in assets and
$5,526,926 in liabilities.
Judge Caryl E. Delano oversees the Debtors' cases.
Brett Lieberman, Esq., at Edelboim Lieberman Revah, PLLC and
KapilaMukamal, LLP serve as the Debtors' legal counsel and
financial advisor, respectively.
MGM RESORTS: Fitch Withdraws BB- Issuer Default Rating
------------------------------------------------------
Fitch Ratings has maintained the Rating Watch Negative on MGM
Resorts International (MGM) due to regulatory uncertainty related
to MGM China's gaming concession in Macau, which expires in
December 2022.
Fitch has subsequently withdrawn MGM's Issuer Default Rating (IDR)
for commercial reasons.
KEY RATING DRIVERS
Macau Regulatory Uncertainty: Fitch views the possibility of
incumbent concession holders failing to secure a new concession as
low, though the risk should not be ignored. The operators have
invested several billions of USD capital, are large local employers
and critical government tax payers, and have supported the local
and Mainland government's broader policy goals, such as the Greater
Bay Area Initiative.
Positively, the incumbents have had their concessions extended by
six months to December 2022, which should give the local government
appropriate time to complete the gaming law revisions via
legislation and complete a retendering process. English
translations and interpretations of the gaming law's draft
revisions reviewed by Fitch has not yielded any material credit
negative characteristics in Fitch's opinion. Fitch's concerns over
regulatory changes center on the possibility of weaker operating
economics, onerous capital commitments, and reduced ability to
upstream cash to parent entities.
Travel Friction Hindering Recovery: Fitch continues to forecast
2022 to be another challenging year for Macau's gaming revenues
given visitation volatility stemming from China's pursuit of a
"zero-COVID" policy. Reducing quarantine requirements between China
and Hong Kong would be positive developments, though disruptions
from local COVID-19 cases would still be likely. Concession
dynamics aside, Macau's weak operating fundamentals are partially
offset by strong performance in MGM's domestic segments and strong
liquidity, which could support future domestic debt paydown should
the company desire to do so.
Solid Domestic Performance: U.S. domestic gaming has fully
recovered to 2019 levels in regional markets and Las Vegas
continues to exhibit strong domestic gaming demand and visitation
trends. The strong performance in Las Vegas, both slots and table
games, is offset by the still recovering international and
convention segments, although the latter will come back more in
earnest in second half 2022.
Fitch's assumptions include marginal growth over 2019 levels for
U.S. regionals in 2022 and for Las Vegas to see a full recovery in
2023, which may prove conservative given current trends
domestically. However, this considers the potential for viral
variants and inflation to impact the recovery's trajectory.
Reduced Financial Flexibility: After the sale-and-leaseback
transactions of Bellagio and MGM Grand in 2019-2020, MGM has
monetized all of its meaningful wholly owned assets and the
increase in lease-equivalent debt mostly offset the subsequent
decline in traditional debt. The additional lease expense from the
CityCenter and Cosmopolitan acquisitions also reduced overall
financial flexibility.
The additional fixed costs created by these transactions weakens
MGM's domestic FCF generation, though still positive. MGM
guarantees the two mortgages for the Bellagio and MGM
Grand/Mandalay Bay joint ventures, respectively, which is another
negative liquidity consideration, albeit a manageable one, given
that both are collection guarantees. MGM's run-rate triple-net
leases annualize to roughly $1.8 billion.
Deleveraging Path: Gross rent-adjusted leverage will remain
elevated as a result of the significant lease-equivalent debt
created by recent transactions. MGM paid down $4.1 billion of
traditional debt between 2018 and early 2020 with asset sale
proceeds, prior to pandemic-related debt issuance, but created $4.3
billion of lease-equivalent debt in the process. The CityCenter &
Cosmopolitan transactions in 2021 also created another $3.3 billion
in lease-equivalent debt.
The sale of MGP to VICI results in roughly $7 billion of
incremental lease-equivalent debt from capitalizing the MGP master
lease at 8.0x, though it brought in over $4 billion in proceeds,
which could be used for incremental debt paydown. Fitch expects
gross adjusted leverage to return below 6.0x in 2023, mostly due to
strong EBITDAR performance in domestic markets. Since the MGP
transaction was announced, management publicly articulated a
4.0x-5.0x net adjusted leverage target (leases capitalized at 8.0x,
domestic leverage).
Favorable Asset Mix: MGM has good geographic diversification, which
includes international properties in Macau. MGM's portfolio has
many high-quality assets in the Strip, and its regional assets are
typically market leaders. The regional portfolio's diversification
partially offsets the more cyclical nature of Las Vegas Strip
properties. MGM's two properties in Macau provide global
diversification benefits and exposure to a market with favorable
long-term growth trends.
DERIVATION SUMMARY
MGM's previous 'BB-' IDR reflected the issuer's strong liquidity,
diversified operating footprint and de-levering path back to
moderate consolidated gross adjusted leverage metrics. This was
offset by weaker financial flexibility as a result of
sale-leaseback transactions over the past few years and higher rent
costs. The IDR takes into consideration MGM's multiple liquidity
sources to withstand lingering coronavirus disruptions (i.e. travel
restrictions, particularly in Macau) and de-levering path back to
6.0x consolidated gross-adjusted leverage amid a solid recovery in
U.S. gaming.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
-- Total revenues relative to 2019 levels are -7% and flat from
2022 through 2023, respectively, which excludes the impact of
CityCenter and Cosmopolitan to consolidated revenues;
-- Flow though to EBITDAR is 40% to 50% in the near term as a
result of meaningful cost cuts. As operations normalize
through the recovery, Fitch assumes MGM's long-term margins
will slightly exceed those of the prior cycle, with some
initiatives taken during the pandemic resulting in a lower
overall cost base;
-- Capex returns to more normalized maintenance levels in 2022
and thereafter.
RATING SENSITIVITIES
No longer relevant given ratings withdrawal.
Previous rating sensitivities at the 'BB-' IDR level were:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross-adjusted debt/EBITDAR sustaining below 5.5x;
-- A resolution of Macau's concession uncertainty with a neutral
or manageable impact to MGM's consolidated credit metrics;
-- Discretionary FCF margin approaching 10%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross adjusted debt/EBITDAR exceeding 6.0x, either through a
more prolonged disruption to global gaming demand or adoption
of a more aggressive financial policy;
-- A reduction in overall liquidity (low cash and revolver
availability, heightened covenant risk or increased FCF burn)
as a result of prolonged coronavirus pressures.
MLK BRYANT: July 5 Plan Confirmation Hearing Set
------------------------------------------------
On March 1, 2022, debtor MLK Bryant, LLC filed with the U.S.
Bankruptcy Court for the District of Oregon a Disclosure Statement
describing Chapter 11 Plan. It is ordered that:
* July 5, 2022 at 01:30 p.m. is the hearing on confirmation of
the plan.
* Written ballots accepting or rejecting the plan or amended
plan must be received no less than 7 days before the hearing date.
* Objections to the proposed plan must be filed no later than
7 days before the hearing date.
A copy of the order dated May 17, 2022, is available at
https://bit.ly/3G9QunD from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Theodore J. Piteo, Esq.
Michael D. O'Brien, Esq.
MICHAEL D. O'BRIEN & ASSOCIATES, P.C.
12909 SW 68th Pkwy, Suite 160
Portland, OR 97223
Tel: (503) 786-3800
About MLK Bryant
MLK Bryant, LLC, a company based in Portland, Ore., filed a
petition for Chapter 11 protection (Bankr. D. Ore. Case No.
21-32459) on Dec. 11, 2021, listing up to $2,101,114 in assets and
up to $1,165,948 in liabilities. Meron Alemseghed, member, signed
the petition. Judge Peter C. Mckittrick oversees the case. The
Debtor tapped Michael D. O'Brien & Associates, P.C., as legal
counsel.
MTPC LLC: Plan Exclusivity Period Extended to June 15
-----------------------------------------------------
MTPC, LLC obtained an order from the U.S. Bankruptcy Court for the
Middle District of Tennessee extending the exclusivity periods for
the company and its affiliates to file a Chapter 11 plan and
solicit acceptances for the plan to June 15 and Aug. 20,
respectively.
The extension will give the companies more time to work
collaboratively with the trustee of each of their respective
pre-bankruptcy bonds to finalize their plan or other possible exit
strategy, according to court filings.
About MTPC LLC
MTPC LLC is a proton-therapy cancer-treatment center that serves a
multi-state area of the Southeastern United States and began
operations in 2018. It is a freestanding center with three active
treatment rooms including one fixed beam and two gantries. MTPC is
located in a 43,500-square-foot building adjacent to the campus of
the Williamson Medical Center, in Franklin, Tenn.
MTPC's affiliate, The Proton Therapy Center, LLC, is a Tennessee
limited liability company that was organized in 2010. It is a
freestanding center with three active treatment rooms including one
fixed beam and two gantries. Proton Therapy Center is located in an
88,000-square-foot building on the campus of the Provision Case
CARES Cancer Center at Dowell Springs, in Knoxville, Tenn., a
comprehensive healthcare campus focusing on cancer treatment,
patient care, research, and education.
PCPT Hamlin, another affiliate of MTPC, is a Florida limited
liability company that was organized in 2018. It includes an
approximately 36,700-square-foot building in the 900-acre Hamlin
planned development in the "Town Center" of the 23,000-acre
"Horizon West" planning area of West Orange County.
MTPC and its affiliates sought Chapter 11 protection (Bankr. M.D.
Tenn. Lead Case No. 20-05438) on Dec. 15, 2020.
As of Aug. 31, 2020, MTPC's unaudited financial statements
reflected total assets of approximately $105.6 million and total
liabilities of approximately $131.2 million. Proton Therapy
Center's unaudited financial statements reflected total assets of
approximately $93.4 million and total liabilities of approximately
$130.2 million. Meanwhile, PCPT Hamlin's unaudited financial
statements reflected total assets of approximately $139.2 million
and total liabilities of approximately $138.5 million.
The Hon. Randal S. Mashburn is the case judge.
The Debtors tapped McDermott Will & Emery LLP as lead bankruptcy
counsel, Waller Lansden Dortch & Davis LLP as co-counsel with
McDermott, Trinity River Advisors LLC as restructuring advisor, and
CRS Capstone Partners LLC as financial advisor. Stretto is the
claims agent.
The U.S. Trustee for Region 8 appointed an official committee of
unsecured creditors on Jan. 8, 2021. The committee is represented
by Sills Cummis & Gross P.C. and Manier & Herod, P.C.
NELSON FAMILY LAWN: Starts Chapter 11 Subchapter V Case
-------------------------------------------------------
Nelson Family Lawn Care LLC filed for chapter 11 protection in the
Northern District of Alabama.
According to court filing, Nelson Family Lawn Care estimates
between 1 and 49 unsecured creditors. The petition states that
funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for
June 9, 2022 at 11:00 A.M. at the office of U.S.T.
About Nelson Family Lawn Care
Nelson Family Lawn Care LLC provides lawn care services.
Nelson Family Lawn Care, LLC filed a petition under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bank. N.D. Ala. Case No.
22-01068) on May 6, 2022, listing up to $100,000 in assets and up
to $500,000 in liabilities.
Steven David Altmann was appointed as Subchapter V trustee.
Honorable Bankruptcy Judge Tamara O. Mitchell oversees the case.
C. Taylor Crockett, at C. Taylor Crockett, PC is the Debtor's legal
counsel.
OMAGINE INC: Further Fine-Tunes Plan Documents
----------------------------------------------
Omagine, Inc., et al., submitted a Proposed Fourth Amended
Disclosure Statement for the Fourth Amended Plan of Reorganization
dated May 19, 2022.
This Disclosure Statement and the Plan (collectively, the "Omagine
Shareholder Package") is being made available to the Omagine
Shareholders who are the Holders of the Class 5 Equity Interests
which are conclusively deemed to have accepted the Plan.
The only Unimpaired Class is Class 5 which consists exclusively of
the 28,650,190 Common Shares issued and outstanding on the Filing
Date and the date hereof. The Omagine Shareholders are the Holders
of such 28,650,190 Common Shares. Under Section 1126(f) of the
Bankruptcy Code a Class such as Class 5 which is not Impaired under
the Plan and each Holder of a Class 5 Equity Interest is
conclusively presumed to have accepted the Plan and solicitation of
acceptances of the Plan with respect to such Class 5 Equity
Interests from the Holders thereof is not required.
The Plan contemplates that the Oman Litigation will infuse funds
via a Recovery into Reorganized Omagine thereby funding the Plan.
The successful funding of the Plan and payment of the Allowed
Claims under the Plan is entirely contingent upon the amount of a
Recovery โ if any โ obtained at the Conclusion of the Oman
Contract Case.
Except for the payment of a possible Allowed Governmental Unit
Claims (including a possible NYS Allowed Claim, if any), the sole
source of cash that may become available to fund Distributions and
payments of Allowed Claims under the Plan is a Recovery. If a
Governmental Unit Claim becomes an Allowed Claim, Omagine will pay
such Allowed Governmental Unit Claim in accordance with the
provisions of the Bankruptcy Code from the available cash in
Omagine's DebtorโInโPossession bank account and/or, if
necessary, from additional PostโPetition Financing to be arranged
by Omagine subsequent to the date of this Plan. The occurrence of a
Recovery depends entirely on the outcome of the Oman Contract Case
and there can be no assurance given that a Recovery will occur.
Pools If a Recovery does occur, the entire amount of such Recovery
will constitute Pool 1 and the Pools will be utilized to prioritize
and pay the Allowed the Plan as follows:
* Pool 1 will consist of 100% of the funds constituting such
Recovery and will be utilized to pay Allowed Governmental Unit
Claims due to a Governmental Unit, if any, which Claims are
Administrative Expense Claims (the "Pool 1 Payments").
* Pool 2 will consist of the funds remaining after making the
Pool 1 Payments and will be utilized to pay the full amounts or
ProโRata Amounts of the Allowed Grossman DIP Payment and the
Allowed AlโSada DIP Payment, both of which are SuperโPriority
Administrative Expense Claims (the "Pool 2 Payments").
* Pool 3 will consist of the funds remaining after making the
Pool 2 Payments and will be utilized to pay the full amounts or
ProโRata Amounts of the BSA Contingency Fee, the RBL Contingency
Fee and the Allowed RBL Expenses Claim, all of which are
Administrative Expense Claims (the "Pool 3 Payments").
* Pool 4 will consist of the funds remaining after making the
Pool 3 Payments and will be utilized to pay the full amounts or
ProโRata Amounts of the Allowed Omagine Business Claims.
* Pool 5 will consist of the funds remaining after making the
Pool 4 Payments and will be utilized to pay either the full amounts
or ProโRata Amounts of the Allowed Insider Consultant Claims, all
of which are postโpetition Administrative Expense Claims (the
"Pool 5 Payments").
* Pool 6 will consist of the funds remaining after making the
Pool 5 Payments and will be utilized to pay either the full amount
or ProโRata Amount of any Allowed Claim(s) not otherwise
classified or included in this Plan, if any, (the "Pool 6
Payments").
* Pool 7 will consist of the funds remaining after making the
Pool 56 Payments and will be utilized to pay either the full amount
or ProโRata Amount of the Allowed BSA Excess Expenses Claim if
any, (the "Pool 7 Payment").
A full-text copy of the Fourth Amended Disclosure Statement dated
May 19, 2022, is available at https://bit.ly/3yOJYB1 from
PacerMonitor.com at no charge.
Attorneys for the Debtors:
Mitchell J. Rotbert, Esq.
ROTBERT BUSINESS LAW P.C.
9059 Shady Grove Court
Gaithersburg, Maryland 20877
Tel: (240) 477-4778
Fax: (888) 913-2307
E-mail: mitch@rotbertlaw.com
About Omagine and Journey of Light
Omagine, Inc., and Journey of Light, Inc., sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-10742) on March 10,
2020. At the time of filing, Omagine listed up to $50,000 in
assets and up to $10 million in liabilities while Journey of Light
listed as much as $50,000 in both assets and liabilities.
Other than Omagine's claims to be brought in Oman, the Debtors have
virtually no assets as of the bankruptcy filing date. Omagine,
Inc., and Journey of Light were previously in the entertainment,
hospitality and real estate development opportunities in the Middle
East, including a mixed-use entertainment, hospitality, and real
estate development project in Muscat, Oman.
Judge Michael E. Wiles oversees the cases.
The Debtors tapped Rotbert Business Law PC as bankruptcy counsel
and BSA Al Rashdi & Al Barwani Advocates as litigation counsel.
ORIGINCLEAR INC: Incurs $3.6 Million Net Loss in First Quarter
--------------------------------------------------------------
OriginClear, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $3.58
million on $1.23 million of sales for the three months ended March
31, 2022, compared to a net loss of $17.86 million on $796,178 of
sales for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $4.52 million in total
assets, $17.93 million in total liabilities, $10.72 million in
commitments and contingencies, and a total shareholders' deficit of
$24.14 million.
"The Company has not generated significant revenue, and has
negative cash flows from operations, which raise substantial doubt
about the Company's ability to continue as a going concern. The
ability of the Company to continue as a going concern and
appropriateness of using the going concern basis is dependent upon,
among other things, raising additional capital and increasing
sales. We obtained funds from investors during the three months
ending March 31, 2022. No assurance can be given that any future
financing will be available or, if available, that it will be on
terms that are satisfactory to the Company. Even if the Company is
able to obtain additional financing, it may contain restrictions on
our operations, in the case of debt financing, or cause substantial
dilution for our stockholders, in case of equity financing."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1419793/000121390022027151/f10q0322_originclearinc.htm
About OriginClear
Headquartered in Clearwater, Florida, OriginClear --
www.originclear.tech -- is a water technology company which has
developed in-depth capabilities over its 14-year lifespan. Those
technology capabilities have now been organized under the umbrella
of OriginClear Tech Group.
OriginClear reported a net loss of $2.12 million for the year ended
Dec. 31, 2021.
Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
April 6, 2022, citing that the Company suffered a net loss from
operations and has a net capital deficiency, which raises
substantial doubt about its ability to continue as a going concern.
OSCEOLA FENCE: Unsecureds Will Get 50% Dividend in 48 Months
------------------------------------------------------------
Osceola Fence Supply, LLC, filed with the U.S. Bankruptcy Court for
the Middle District of Florida a Chapter 11 Plan of Reorganization
under Subchapter V dated May 17, 2022.
The Debtor was incorporated as a limited liability company on
August 16, 2009, as Osceola Fence, LLC. The name was changed to
Osceola Fence Supply, LLC in March 2013. The Debtor has been
engaged in fence construction business for nearly 12 years.
Since this case was filed, the Debtor has gone from virtual
shutdown of its business, to once again becoming a viable business.
In the first 14 days of operating post-petition, the Debtor had
generated $69,793.35 in cash receipts, along with $20,390 in
receivables. In the first full month, March, the Debtor had
$116,875 in cash receipts, and generated another $90,346 in
accounts receivables. The Debtor believes it is on a path toward
recovery and will be able to accomplish the plan.
Class 65 consists of Unsecured, Non-Priority Creditors. The allowed
unsecured claimants will be paid a pro-rated amount, without
interest, over 4 years with payments being made each month,
commencing in Month 13 of the Plan. The first payment will begin 1
year and 60 days after the effective date of the plan. The
unsecured dividend anticipated is $12,109.9 month for 48 months =
$581,236.23 = approximately a 50% dividend. The allowed unsecured
claims total $1,142,605.451.
Class 66 consists of members who hold membership interests in the
Debtor as issued or authorized in the Debtor. At the time of filing
the case, Anthony Paradiso was the sole manager and member of the
Debtor. His equity or interest in the Debtor that existed as of the
Petition date remains post-confirmation to the same extent,
validity, and priority as it existed pre-petition. This Class is
unimpaired.
Osceola Fence will fund the Plan from the sale of any unneeded
vehicles and equipment, its existing accounts receivables, and
general sales income and cash flow and future income over five
years. The plan will be implemented by payments, beginning on the
effective date of the Plan.
A full-text copy of the Plan of Reorganization dated May 17, 2022,
is available at https://bit.ly/3Pu0SuR from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Lawrence M. Kosto, Esq.
Kosto & Rotella, PA
619 East Washington Street
Post Office Box 113
Orlando, FL 32802
Telephone: (407) 425-3456
Facsimile: (407) 423-9002
Email: lkosto@kostoandrotella.com
About Osceola Fence Supply
Osceola Fence Supply, LLC, filed its voluntary petition for Chapter
11 protection (Bankr. M.D. Fla. Case No. 22-00512) on Feb. 14,
2022, listing up to $50,000 in assets and up to $10 million in
liabilities. Anthony Paradiso, managing member, signed the
petition.
Judge Lori V. Vaughan oversees the case.
The Debtor tapped Lawrence M. Kosto, Esq., at Kosto & Rotella, PA
as legal counsel and James C. Hemphill, CPA, at Hemphill Accounting
Services, Inc. as accountant.
OZOP ENERGY: Unit to Buy $11 Million in Solar Panels to Meet Demand
-------------------------------------------------------------------
Ozop Energy Solutions. Inc.'s subsidiary Ozop Energy Systems, Inc.
has issued purchase orders committing to purchasing approximately
$11 million in solar panels. The Company has already put down as
deposits over $1.7 million in order to secure the delivery and will
be making additional deposits prior to delivery. Approximately $6
million of the product is expected to arrive by August 2022, with
the remaining $5 million forecasted to arrive in November 2022.
The Company said "The solar industry has been in the news quite a
bit for more than the last six months. Due to Covid related
matters in all corners of the world, factory production has had to
endure periodic forced temporary shutdowns, and we are all well
aware of the shipping and port situations that continued to affect
the unloading, clearing and delivery of many products. Based on
these conditions, OES has taken the initiative with suppliers to
secure the delivery of solar panels. Our customer demand also
remains strong, as many installers and retailers are well aware of
these issues and want to secure product for their business."
As announcement by the U.S. Department in March 2022, it would
investigate allegations that solar panel manufacturers in Southeast
Asia are using Chinese-made parts and evading U.S. tariffs has
raised alarms concerning both trade and environmental policy. The
department announced March 28, that it would investigate claims by
a California-based solar panel manufacturer that solar energy
equipment manufacturers in Cambodia, Malaysia, Thailand and Vietnam
have close business ties to companies in China that produce the raw
materials and some components of solar panel assemblies.
OES's first quarter revenues were approximately $2.9 million.
Based on the above and the Company's current on-hand inventory,
management anticipates similar to slightly higher quarterly sales
results for the second and third quarter of 2022 as experienced in
the first quarter, and a significant increase in the fourth quarter
of 2022.
"In addition to the above purchase orders, we are working with all
of our vendors to secure more product this year and into Q1, 2023,"
stated Christopher Serna, Director of Sales for Ozop Energy
Systems. "While we are not entirely sure how much in additional
product we can obtain in this climate, we have deep rooted
relationships with vendors that we have worked with almost a
decade. The addition of these large PO's is allowing us to
solidify multi-Megawatt forecasts from customers that we would
otherwise not have access to."
About Ozop Energy Solutions
Ozop Energy Solutions (http://ozopenergy.com)invents, designs,
develops, manufactures, and distributes ultra-high-power chargers,
inverters, and power supplies for a wide variety of applications in
the defense, heavy industrial, aircraft ground support, maritime
and other sectors. The Company's strategy focuses on capturing a
significant share of the rapidly growing renewable energy market as
a provider of assets and infrastructure needed to store energy.
Ozop Energy reported a net loss of $195.30 million for the year
ended Dec. 31, 2021, compared to a net loss of $20.97 million for
the year ended Dec. 31, 2020. As of March 31, 2022, the Company
had $10.28 million in total assets, $39.28 million in total
liabilities, and a total stockholders' deficit of $28.99 million.
Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 15, 2022, citing that as of Dec. 31, 2021, the
Company had an accumulated deficit of $217,326,611 and a working
capital deficit of $28,225,908 (including derivative liabilities of
$20,966,701). As of Dec. 31, 2021, the Company was in default of
$1,973,847 and accrued interest on debt instruments due to
non-payment upon maturity dates, and subsequent to Dec. 31, 2021,
an additional $13,310,000 and accrued interest on debt instruments
also were in default status due to non-payment upon maturity
dates.
These factors, among others, raise substantial doubt regarding the
Company's ability to continue as a going concern.
PARETEUM CORP: May Use $3MM of Circles DIP Loan
-----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Pareteum Corp. and its debtor-affiliates to, among other
things, use cash collateral and obtain postpetition financing on an
interim basis.
The Debtors have entered into a superpriority senior secured
debtor-in-possession credit facility in an aggregate principal
amount of up to $6 million, provided by Circles MVNE Pte. Ltd., a
prepetition senior secured lender and agented by Circles. The
Debtor is permitted to obtain an aggregate principal amount of
about $3 million of the loan amount for the interim period.
As of the Petition Date, the Debtors were parties to the (A)
Prepetition Bridge Loan Agreement, (B) the Prepetition First Lien
Note, and (C) the second lien notes issued by Pareteum in favor of
Channel Ventures Group LLC under a Securities Purchase Agreement
dated February 22, 2021.
As of the Petition Date, the aggregate amount owed by the Debtors
under the Prepetition Bridge Loan and the prepetition Senior
Secured Convertible Note due 2025 among Pareteum, as issuer, and
High Trail Investments SA LLC, as initial holder, subsequently sold
to Circles, as holder, in respect of the Prepetition Documents was
not less than $27,720,930, made available to the Borrowers pursuant
to the Prepetition Loans.
As of the Petition Date, the Debtors also owed approximately
$26,253,904 under the Prepetition Second Lien Notes.
The Debtors' need to use cash collateral and to obtain credit as
set forth in the DIP Facility Agreement is immediate and critical
in order to enable the Debtors to continue operations and to
administer and preserve the value of their estates.
As adequate protection, the Prepetition Secured Parties are granted
a lien on and a security interest in all DIP Collateral,
subordinate only to the DIP Liens, the Carve-Out, and the Permitted
Prior Liens. As further adequate protection, the Prepetition
Secured Parties are granted an allowed administrative expense
claims with priority pursuant to section 507(b) of the Bankruptcy
Code to the extent the Adequate Protection Lien is insufficient to
protect the Prepetition Secured Parties' interests in the
Prepetition Collateral.
The Carve-Out means (a) the payment of fees under 28 U.S.C. ยง
1930, (b) all reasonable fees and expenses up to $50,000 incurred
by a trustee under Section 726(b) of the Bankruptcy Code, (c) the
payment of any fees and expenses owing to the clerk of the Court or
any agent thereof, subject to the Approved Budget, (d)(i) the
payment of unpaid and outstanding reasonable fees and disbursements
of attorneys and other professionals retained by the Debtors and
any statutory committees appointed in the chapter 11 cases under
sections 327 or 1103(a) of the Bankruptcy Code actually incurred
from the Petition Date through the occurrence of an Event of
Default or other Termination or Maturity Date, whether allowed
prior to or after delivery by the DIP Lender of a Carve-Out Trigger
Notice, and (ii) allowed professional fees of retained
professionals of the Debtors in an aggregate amount of $300,000 and
allowed professional fees of retained professionals of any
statutory committees in an amount not to exceed $100,000, in each
case incurred after the first day following delivery by the DIP
Lender of the Carve-Out Trigger Notice, to the extent allowed at
any time.
The final hearing on the matter is scheduled for June 7, 2022 at 2
p.m.
A copy of the order is available at https://bit.ly/38IDXv3 from
PacerMonitor.com.
About Pareteum Corporation
Pareteum Corporation is a cloud software communications platform
company which provides communications platform-as-a-service (CPaaS)
solutions offering mobility, messaging, and connectivity and
security services and applications. It has operations in North
America, Latin America, Europe, Middle East, Africa, and the
Asia-Pacific region.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10615) on May 15,
2022. In the petition signed by Laura W. Thomas, interim chief
financial officer, the Debtor disclosed $52,043,000 in assets and
$10,486,000 in liabilities.
Judge Lisa G. Beckerman oversees the case.
The Debtor tapped TOGUT, SEGAL & SEGAL LLP as bankruptcy counsel,
KING & SPALDING LLP as special counsel, FTI CAPITAL ADVISORS, LLC
as investment banker, FTI CONSULTING, INC. as financial advisor,
and KURTZMAN CARSON CONSULTANTS LLC as claims, noticing, and
balloting agent.
PARTY CITY: S&P Downgrades ICR to 'B-', Outlook Negative
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on party goods
retailer and wholesaler Party City Holdings Inc. to 'B-' from 'B'.
S&P also lowered its issue-level ratings on the company's senior
secured debt to 'B-' from 'B' and its ratings on the senior
unsecured debt to 'CCC' from 'CCC+'. The recovery ratings are
unchanged.
S&P said, "The negative outlook indicates that we could lower the
ratings within the next 12 months if prolonged operating weakness
due to slowing consumer demand or rising cost pressures further
reduced Party City's cash flow generation, which could cause us to
view its capital structure as unsustainable.
"The company's recent operating performance has been weaker than we
anticipated, and the timing of a recovery is uncertain due ongoing
supply chain constraints and macroeconomic weakness. Although Party
City reported positive comparable sales growth of 2.1% at its
retail locations during its first fiscal quarter ended March 31,
2022, supply chain challenges and inflationary pressures dented its
operating profit. Quarterly S&P Global Ratings-adjusted EBITDA
margins declined 650 basis points as elevated freight costs, port
fees, and raw material cost increases were higher than expected.
Global helium shortages also squeezed margins as the company tapped
the spot markets to meet demand for the upcoming graduation season.
While we expect helium cost pressures to subside after the second
quarter, we expect intense operating pressures to persist through
the end of the year. Moreover, the company noted slowing consumer
demand due to inflationary pressures, geopolitical tensions, and
the anniversary of stimulus payments, as an additional headwind.
Price increases should offset some cost pressures, but Party City's
position as a discretionary specialty retailer leaves it
particularly vulnerable to reduced consumer purchasing power in our
view. As such, we revised our forecast downward and we now expect
flat revenue growth for Party City in fiscal 2022.
"We forecast elevated leverage and weak cash flow this year, with
improvements expected in 2023. We anticipate constrained EBITDA
margins in fiscal 2022 will cause S&P Global Ratings-adjusted
leverage to approach 6x with significantly negative free operating
cash flow (FOCF). Our leverage forecast incorporates more than $100
million of borrowings under the under the asset-based lending (ABL)
revolving credit facility." In addition, higher cost inventory
purchases and capital investments in its new headquarters, store
remodels, and technology will weigh on near-term FOCF. As supply
chain conditions gradually improve and pricing actions help
mitigate some of the cost headwinds, profitability should improve
in fiscal 2023, enabling it to return leverage to the low-5x area
with FOCF of $25 million to $50 million.
Party City has sufficient liquidity to withstand near-term cash
burn. As of March 31, 2022, the company had $33 million of cash on
hand and about $90 million of availability under its ABL, which
reflects peak seasonal borrowings. S&P said, "Given our expectation
for a recovery in profitability and cash flow in fiscal 2023, we do
not anticipate issues addressing the upcoming 2023 senior notes
maturity of $23 million at this time. However, we recognize that
liquidity could become constrained if additional adversities weaken
its operating performance and cash flow generation."
S&P said, "We believe Party City faces heightened competition amid
intense industry challenges. Party City has prominent competitors
in the party goods and products category, including big box, mass
merchants, and Amazon.com Inc.. Due to increased price transparency
and convenience, we think its online peers could challenge its
market share and lead to increased volatility in sales and
profitability in the near-term. During the important Halloween
season, Party City also competes directly with SSH Holdings Inc.
(parent of Spencer Spirit), which has a stronger track record of
positive performance. We note the company's initiatives including
investments in product quality and innovation, buildout of a new
store format (called NEXTGEN), and revamped marketing should help
defend against competitive pressures."
Party City guarantees the rated debt facilities through a
restricted credit group structure that excludes its Anagram
business, which manufactures and distributes balloon products
globally. Party City is the ultimate parent of the group and
borrower of the debt facilities for the restricted group. S&P said,
"While Anagram is not a part of Party City creditors' restricted
group following the transaction, we incorporate it in our
assessment of the company's overall credit quality. This reflects
our view that Anagram is a strategically important subsidiary and
our belief that Party City is committed to its operations and would
likely support Anagram if it required assistance. While we believe
Anagram is unlikely to be sold, we could see circumstances in which
Party City would pursue a sale of the subsidiary."
The negative outlook reflects the possibility of a downgrade within
the next 12 months if performance volatility due to supply chain
issues, rising costs, or declining consumer demand for party dรฉcor
intensified or persisted longer than S&P currently anticipates,
challenging the company's ability to restore cash flow levels.
S&P could lower the rating if it views Party City's capital
structure as unsustainable. This could occur if:
-- Profitability continued to be pressured by rising inflationary
pressures and supply chain constraints; or
-- Consumer demand weakened more than expected as higher prices
continued to squeeze consumers' purchasing power, especially for
discretionary categories such as party supplies.
Under these scenarios, S&P would not expect a significant
improvement to its operating prospects and for FOCF prospects to be
limited.
S&P could revise the outlook back to stable if:
-- Party City significantly improves its operating profits by
successfully navigating rising cost pressures and demand for its
product offering remained stable despite weakening economic
conditions; and
-- It sustained leverage below 6x and we expect the company will
generate substantially positive FOCF on a sustained basis.
ESG credit indicators: E-2, S-2, G-2
PETSMART LLC: S&P Alters Outlook to Positive, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised the outlook on U.S.-based PetSmart LLC
to positive from stable. At the same time, S&P affirmed the 'B'
issuer credit rating on the company and the 'BB-' issue-level
ratings on the senior secured debt and 'CCC+' on the unsecured
notes.
The positive outlook reflects the potential for a higher rating if
PetSmart maintains its less aggressive approach to debt and recent
good operating performance is sustained.
The outlook revision reflects continued deleveraging to less than
4x adjusted debt to EBITDA, along with good operating performance
and tailwinds in the broader industry. PetSmart reported an 18%
increase in revenue for fiscal 2021 (ended Jan. 30, 2022) supported
by a similar increase in comparable sales driven by continued
favorable industry trends, including increased pet ownership and
adoption rates. PetSmart's accelerated revenue growth and lower
debt levels following the refinancing in 2021 lead us to forecast
that S&P Global Ratings-adjusted debt to EBITDA leverage will be in
the mid- to high-3x area in 2022. S&P said, "We believe these
positive operating trends, supported by tailwinds from the
pandemic, will result in leverage sustained below 4x. We believe
positive industry trends will carry into 2022, but we do believe we
will see some slowing in growth, given the higher inflationary
environment. We also note last year's performance was further
boosted by government stimulus programs and increased disposable
income."
S&P said, "Offsetting these positive factors is the ongoing
financial sponsor ownership by BC Partners, which we believe
presents the risk of a future leveraging event. Our assessment
incorporates our view of the financial policies of most financial
sponsor-owned companies, which focus on generating investment
returns over short time horizons and typically operate with high
leverage. The sponsors have historically taken an aggressive
approach to leverage, but we view recent debt paydowns positively
and believe they could pursue a less aggressive financial policy
going forward.
"We believe there is still some potential for volatility in
performance over the next 12 months given supply chain and
inflation pressures. Margins were affected by higher product and
supply chain costs in 2021, with gross margin declining 150 basis
points (bps). We expect these pressures to continue into 2022 and
view them as a risk to performance. Though PetSmart will be able to
somewhat mitigate inflation pressures by passing on some price
increases to customers, we believe that the company's sales of hard
goods and specialty merchandise could moderate given a softer
consumer spending environment and overall lower demand for
discretionary purchases. However, we do consider that pet
purchases, particularly consumables, are not completely
discretionary spending. We also believe that a shift in sales mix
to consumables spending which is lower margin, and represented 47%
of 2021 sales, may lower margins further. As a result, we expect
S&P Global adjusted EBITDA margins to decline about 200 bps to
about 18% in 2022.
"We believe a significant shift to online shopping would be a
threat to brick-and-mortar retailers. We recognize PetSmart's
leading position in physical retail stores, which combined with its
focus on services (e.g., grooming, boarding, training, and
veterinary care) provide some opportunities for growth even as
e-commerce competitors, like Chewy and Amazon.com Inc., grow at a
rapid pace. Following the elimination of the Chewy ownership,
PetSmart needs to demonstrate traction with its omnichannel
capabilities. We view PetSmart's continued investment in
omnichannel offerings such as Buy-Online Pick-up in Store (BOPIS),
Ship-to-Home and Ship-from-Store as positive credit factors,
however, we still view PetSmart's online capabilities as lagging
those of other industry peers, including Amazon, Walmart, and
Target. We believe PetSmart must continue to invest in its online
channel to remain competitive, as consumers increasingly shift to
online purchases, a trend the pandemic has accelerated. However, we
do note that PetSmart's service offerings (including pet hotels,
grooming, and training) encourage consumers to visit the stores,
and they likely increase its customer value proposition."
The positive outlook reflects the potential for a higher rating if
PetSmart maintains its less aggressive approach to debt and recent
good operating performance is sustained.
S&P could raise its ratings on PetSmart if:
-- Operating performance remained reasonably good, with positive
same-store sales and competitive pressures do not lead to
deteriorating metrics; and
-- The company continued to use a less aggressive approach to
debt, such that S&P did not anticipate a significant leveraging
event.
S&P could revise its outlook back to stable on PetSmart if:
-- Operating performance deteriorated significantly. This could
occur if increased competition and a weaker macro-environment led
to significantly negative same-store sales.
-- The company's sponsors, BC Partners, pursued a leveraging
transaction that led S&P to view financial policy as aggressive.
ESG credit indicators: E-2, S-2, G-3
PHUNWARE INC: Incurs $14.9 Million Net Loss in First Quarter
------------------------------------------------------------
Phunware, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $14.92
million on $6.78 million of net revenues for the three months ended
March 31, 2022, compared to a net loss of $14.31 million on $1.65
million of net revenues for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $81.42 million in total
assets, $29.43 million in total liabilities, and $51.99 million in
total stockholders' equity.
As of March 31, 2022, the Company held total cash of $10.8 million,
all of which was held in the United States. The Company has a
history of operating losses and negative operating cash flows. As
the Company continues to focus on growing its revenues, the Company
expects these trends to continue into the foreseeable future.
Phunware may, if needed, sell its digital asset holdings for cash
to fund its ongoing operations. As of March 31, 2022, the Company
held 644 bitcoins and 1,287 ethereum, of which consist of the
majority of the digital assets recorded on its balance sheet. The
digital asset market historically has been characterized by
significant volatility in its price, limited liquidity and trading
volumes compared to sovereign currencies markets, relative
anonymity, a developing regulatory landscape, susceptibility to
market abuse and manipulation, and various other risks inherent in
its entirely electronic, virtual form and decentralized network.
During times of instability in the digital asset market, the
Company may not be able to sell its digital asset holdings at
reasonable prices, or at all. As a result, the Company's digital
assets are less liquid than its existing cash and cash equivalents
and may not be able to serve as a source of liquidity for the
Company to the same extent as cash and cash equivalents, according
to the SEC filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1665300/000162828022014526/phun-20220331.htm
About Phunware
Headquartered in Austin, Texas, Phunware, Inc. --
http://www.phunware.com-- offers a fully integrated software
platform that equips companies with the products, solutions and
services necessary to engage, manage and monetize their mobile
application portfolios globally at scale.
Phunware reported a net loss of $53.52 million for the year ended
Dec. 31, 2021, a net loss of $22.20 million for the year ended Dec.
31, 2020, a net loss of $12.87 million for the year ended Dec. 31,
2019, and a net loss of $9.80 million for the year ended Dec. 31,
2018. As of Dec. 31, 2021, the Company had $99.29 million in total
assets, $34.02 million in total liabilities, and $65.28 million in
total stockholders' equity.
PIAGGIO AMERICA: Amends Unsecured Creditors Claims Pay Details
--------------------------------------------------------------
Piaggio America, Inc., submitted a Third Amended Disclosure
Statement for Chapter 11 Plan of Liquidation dated May 19, 2022.
The Plan is based upon the liquidation of substantially all of the
Debtor's Assets through a court authorized auction sale. The
auction sale will be consummated on or before the Effective Date of
the Plan. Following the Effective Date of the Plan, a Disbursing
Agent will hold the sale proceeds, monetize any remaining Assets,
and pursue any Causes of Action, for the benefit of the creditors
of the Debtor's Estate, and for payments of all Allowed Claims.
The Debtor believes that Confirmation of the Plan provides the best
opportunity for maximizing recoveries for creditors and is
preferable to all other alternatives. Under the Plan, Bryan
Perkinson of Sonoran Capital Advisors, the existing Court approved
Financial Advisor to the Debtor, would be appointed as Disbursing
Agent and would oversee the sale, liquidation, or other disposition
of all or substantially all of the Debtor's Assets, including
prosecuting any viable Causes of Action, to pay Holders of Allowed
Claims.
Allowed Administrative Claims
Allowed Administrative Claims shall be paid upon the date on which
such Claims become due in the ordinary course, in accordance with
the terms and conditions of any agreement relating thereto or upon
such other dates and terms as may be agreed upon by the holders of
such Allowed Administrative Claims. All other holders of Allowed
Administrative Claims shall be paid 100% of their respective
Allowed Administrative Claims in cash, unless otherwise ordered by
the Bankruptcy Court, upon the latter of (i) the Effective Date,
or, (ii) the date on which an order approving payment of such
Administrative Claim becomes a Final Order.
The Debtor estimates the following Administrative Claims: (1)
approximately $350,000 in fees and costs for professional fees and
costs incurred by professionals, Holland & Knight LLP, as general
bankruptcy counsel, and Sonoran Capital Advisors LLC as its
financial advisors, from January 16, 2022 through the Effective
Date; (2) $122,964 in fee holdbacks from prior fee applications of
Holland & Knight LLP and Sonoran Capital Advisors LLC; and (3)
approximately $48,445.44 in anticipated employee benefit claims for
2022 unused vacation pay resulting from employee terminations.
Class 1 consists of the Allowed Secured Claim of BMW Bank of North
America ("BMW Bank"). The Debtor has remained current on its
obligations to BMW Bank following the Petition Date and, the
estimated amount of the Class 1 Claim as of the Effective Date will
be approximately $6,900.00. The holder of the Allowed Class 1 Claim
shall be paid its payoff balance, estimated to be approximately
$6,900.00, in full in cash on or before the Effective Date.
Class 3 consists of Allowed General Unsecured Claims, which
generally includes any claims for damages resulting from the
Debtor's rejection of executory contracts and unexpired leases. The
estimated amount of Allowed General Unsecured Claims will be
approximately $12,694,374, not including: (1) the reduced claim of
Piaggio Italy which is addressed in the treatment section; and (2)
the potential rejection damages claim of $23,737.95 related to the
anticipated rejection of the Debtor's office and warehouse lease at
1515 and 1516 Perimeter Road, West Palm Beach, Florida 33406.
Each holder of Allowed Class 3 Claim shall receive Pro Rata
distributions of the Distribution Assets in full satisfaction,
settlement and release of their respective Allowed Claims. In
accordance with agreements between Piaggio Italy, FAST Enterprises,
LLC and Peregrine Falcon, LLC, (1) the Claim of Piaggio Italy is
being reduced from its asserted claim amount of $11,336,903 to an
Allowed Class 3 Claim amount that will yield a distribution payment
of $65,000 to Piaggio Italy, and (2) the Allowed Claims of FAST
Enterprises, LLC and Peregrine Falcon, LLC will be in the combined
total amount of $12,250,471.
The Class 3 Claims are Impaired. Accordingly, each holder of an
Allowed Class 3 Claim, except Piaggio Italy, is entitled to vote to
accept or reject the Plan. As an insider of the Debtor, the vote of
Piaggio Italy will not be considered for purposes of satisfying the
requirements of Section 1129 of the Bankruptcy Code.
The Plan shall be funded from the Distribution Assets, including
but not limited to cash held by the Debtor on the Effective Date
and any proceeds from the sale, liquidation or other disposition of
all or substantially all of the Debtor's Assets.
A full-text copy of the Third Amended Disclosure Statement dated
May 19, 2022, is available at https://bit.ly/3G7bCLa from
PacerMonitor.com at no charge.
Counsel for the Chapter 11 Debtor:
Joaquin J. Alemany, Esq.
Arthur E. Rosenberg, Esq.
Edward M. Fitzgerald, Esq.
HOLLAND & KNIGHT LLP
701 Brickell Avenue, Suite 3300
Miami, Florida 33131
Telephone: (305) 789-7763
Facsimile: (305) 789-7799
E-mail: joaquin.alemany@hklaw.com
arthur.rosenberg@hklaw.com
edward.fitzgerald@hklaw.com
About Piaggio America
West Palm Beach, Fla.-based Piaggio America Inc. --
http://www.piaggioaerospace.it/-- is a manufacturer of aerospace
products and parts. It designs, develops, and supports unmanned
aerial systems, business, special missions, and ISR aircraft and
aero engines.
Piaggio America filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 21
13491) on April 13, 2021. In the petition signed by CEO Paolo
Ferreri, the Debtor disclosed $1 million to $10 million in assets
and $10 million to $50 million in liabilities.
Judge Erik P. Kimball presides over the case.
Holland & Knight, LLP and Sonoran Capital Advisors, LLC serve as
the Debtor's legal counsel and financial advisor, respectively.
PIONEER POWER: Incurs $788K Net Loss in First Quarter
-----------------------------------------------------
Pioneer Power Solutions, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $788,000 on $6.04 million of revenues for the three
months ended March 31, 2022, compared to net income of $351,000 on
$3.50 million of revenues for the three months ended March 31,
2021.
Nathan Mazurek, Pioneer's chairman and chief executive officer,
said, "The first quarter of 2022 reflects the initial, strong
contribution from our new e-Bloc and E-BOOST EV-charging solutions,
driving a more than 70% increase in revenue to our highest
quarterly revenue in more than two years, continued expansion of
our backlog and a 450% improvement in gross profit. We expect to
start delivering units related to our large e-Bloc order in the
second quarter, with the bulk of the shipments to be delivered in
the third and fourth quarters of this year. Market response to our
E-BOOST suite at the ACT Expo exceeded expectations. These
products are seeing strong demand just a few months after their
launch, and our confidence that they will materially contribute to
2022 revenues is growing."
Mr. Mazurek continued, "With a backlog of $24 million at March 31,
2022 and growing demand for these new solutions, we are
increasingly confident we will grow our 2022 revenue by at least
50% over our 2021 revenue and deliver continued margin expansion.
We are hopeful that each quarter will show year-over-year growth,
with the majority of growth occurring in the second half of 2022.
We expect to generate positive operating cash flow for 2022."
As of March 31, 2022, the Company had $34.98 million in total
assets, $16.15 million in total liabilities, and $18.84 million in
total stockholders' equity.
As of the three months ended March 31, 2022, the Company had $13.1
million of cash on hand and working capital of $17.4 million. The
cash on hand was generated primarily from cash flows from operating
activities and the sale of common stock under the At The Market
Sale Agreement during the year ended Dec. 31, 2021.
Pioneer Power said "We have met our cash needs through a
combination of cash flows from operating activities and bank
borrowings, the completion of the Equity Transaction, proceeds from
the sale of the CleanSpark Common Stock and warrants to purchase
CleanSpark Common Stock, proceeds from insurance and funding from
the Payroll Protection Program. Our cash requirements historically
were generally for operating activities, debt repayment, capital
improvements and acquisitions. We expect to meet our cash needs
with our working capital and cash flows from our operating
activities. We expect our cash requirements to be generally for
operating activities, product development and capital improvements.
The Company expects that its current cash balance is sufficient to
fund operations for the next twelve months."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1449792/000138713122006202/ppsi-10q_033122.htm
About Pioneer Power
Pioneer Power Solutions, Inc. --
http://www.pioneerpowersolutions.com/-- is engaged in the design,
manufacture, integration, refurbishment, service and distribution
of electric power systems, distributed energy resources, used and
new power generation equipment and mobile EV charging solutions for
applications in the utility, industrial and commercial markets.
Pioneer Power reported a net loss of $2.17 million for the year
ended Dec. 31, 2021, a net loss of $2.98 million for the year ended
Dec. 31, 2020, and a net loss of $1.03 million for the year ended
Dec. 31, 2019.
PLAYA HOTELS: S&P Upgrades ICR to 'B', Outlook Stable
-----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Mexican and
Caribbean all-inclusive resort owner and operator Playa Hotels &
Resorts N.V. to 'B' from, 'B-'.
S&P also raised the issue level rating on Playa's senior secured
credit facility to 'B' from 'B-'.
S&P said, "The stable outlook reflects our expectation that
continued good demand for Playa's Mexican and Caribbean
all-inclusive resorts could cause Playa to improve leverage to
about 5x in 2022, which is well below our 7x downgrade threshold at
the current rating.
"We upgraded Playa to 'B' because we upwardly revised our base case
for revenue and EBITDA and now expect that Playa's leverage will
improve to about 5x and its EBITDA coverage of interest expense
will be about the 3x area in 2022.
"Our upward base case revision reflects better than previously
anticipated operating performance in the first quarter of 2022
despite the impact of the omicron variant. In addition, Playa's
disclosed forward booking curve suggests continued good operating
performance through the remainder of the year, which we expect
could cause total package revenues to improve by about 60% in 2022
compared with 2021, which would be about 30% above 2019 levels.
Receding travel restrictions and continued strong consumer demand
for leisure travel support our expectation that Playa's occupancy
will continue to recover this year, and as long as package ADR's do
not decrease significantly, we expect that its EBITDA margin could
improve to the high-20% area in 2022. These assumptions drive our
expectation that leverage could improve to about 5x in 2022, which
is a very good cushion compared with our 7x downgrade threshold at
the current rating.
"In 2023, we preliminarily assume that EBITDA grows modestly,
largely driven by a continued occupancy recovery, but we believe
that very strong package ADR this year could moderate next year.
Further leverage improvement below our 5x upgrade threshold will
depend on Playa's investment choices. Ratings upside is unlikely
because of Playa's track record over using high levels of leverage
to fund acquisitions, developments, and improvements that fuel
growth."
Although it is not S&P's current base case, a substantial drop in
package ADR in 2023 from currently high levels could be caused by
any one or a combination of the following factors:
-- A recessionary macroeconomic environment in North America that
drives weaker-than-expected consumer discretionary spending.
-- Weakening demand for travel to Mexico and the Caribbean
primarily if North American travelers shift plans to Europe and
Asia.
-- A moderation in the pent-up demand for leisure travel that has
boosted rates since the summer of 2021.
-- Rate competition with other Mexican and Caribbean all-inclusive
resort operators or U.S.-based resorts.
-- Travelers are deterred from visiting the Yucatan peninsula
because of crime.
Despite these risks, which S&P will continue to monitor closely, it
expects that Playa will have good cushion against its 7x downgrade
threshold, such that its rating could withstand a modest decline in
2023 EBITDA if operating conditions are weaker than currently
anticipated.
As a hotel owner, Playa's ability to liquidate properties enhances
its financial flexibility. Playa's liquidity in the form of cash
and revolver availability is currently adequate and more than
sufficient to finance S&P's assumed level of maintenance and growth
capital expenditures. However, the company's hotel portfolio
continues to be a source of future flexibility, in our opinion,
should the company need it. On April 22, 2021, Playa announced the
sale of its Riviera Maya-based Capri hotel for $55 million in cash.
On Nov. 4, 2020, it announced the sale of its Riviera Maya-based
Dreams Puerto Aventuras for a total cash consideration of $34.5
million. In addition, on May 1, 2020, Playa announced the sale of
two Jamaican resorts, the Jewel Dunn's River Beach Resort & Spa and
the Jewel Runaway Bay Beach Resort & Waterpark, for a total
consideration of $60 million in cash. Although market conditions
are typically depressed when asset sales are needed and this may
reduce the number of potential buyers, the company could sell
additional noncore hotels in its portfolio if it needs to generate
additional liquidity.
Geographic concentration leaves Playa vulnerable to regional risks.
Playa generates the majority of its EBITDA from its Mexican
properties, most of which are located in the Yucatan peninsula.
This concentration leaves Playa more exposed to regional risks than
its higher-rated peers in the lodging industry. Travel-related
event risk can significantly impair business conditions in the
Mexican and Caribbean resort market, demonstrated by the health
scare involving reports of tainted alcohol that deterred travel to
the Dominican Republic in 2019.
Playa's relationships with well-known global lodging brands provide
it with competitive advantages. Playa and Marriot International
recently announced the planned opening of the Sanctuary Cap Cana in
the Dominican Republic. The resort will open this summer under
Marriott's The Luxury Collection Brand through a new partnership.
Playa will manage the resort under The Luxury Collection brand.
Playa also operates five of its resorts under the Hilton brand,
including the Hilton Playa del Carmen and Hilton La Romana. In
addition, Playa owns and operates eight resorts under the Hyatt
brand. The company's partnerships with well-known global lodging
brands provide it with a number of benefits, including access to
their loyalty programs, quality assurances, and increased exposure
to new customers. As global brands expand their all-inclusive
offerings, Playa could identify additional opportunities to partner
with lodging companies that are well recognized and have good
distribution systems.
S&P said, "Before the pandemic, the competition in the
all-inclusive space was heating up, and we believe competition
could increase over the next several years. Since entering the
all-inclusive space in 2019, Marriot has added 28 franchised
resorts to its portfolio, with plans to continue expanding its
all-inclusive presence. We believe traditional lodging brands that
have historically eschewed the all-inclusive model are responding
to consumer demand and the success of Hyatt's Ziva and Zilara brand
launches with Playa a few years ago. Increased competition from
branded all-inclusive resorts in the company's markets could
diminish the competitive advantages it receives from partnering
with brands like Hilton and Hyatt.
"The stable outlook reflects our expectation that continued good
demand for Playa's Mexican and Caribbean all-inclusive resorts,
could cause Playa to improve leverage to about 5x in 2022, which is
well below our 7x downgrade threshold at the current rating.
"We could lower our rating on Playa if we expected it to sustain
debt to adjusted EBITDA above 7x or EBITDA coverage of interest
expense worse than 2x. This could be caused by a currently
unanticipated and sustained material decline in occupancy and
package ADR driven by an economic downturn in the U.S., a
resurgence of a virus variant, or a shift in travel plans to Europe
and Asia that materially reduces North American travel to Mexico
and the Caribbean, or a significant leveraging transaction.
"An upgrade is unlikely because of Playa's track record using high
leverage to fund acquisitions, developments, and improvements that
fuel growth. However, we could consider a higher rating if Playa
sustained leverage below 5x and publicly articulated a
strategically plausible financial policy commitment that would
result in our measure of leverage remaining below 5x over the
lodging cycle."
ESG credit indicators: E-3, S-3, G-2
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of Playa and are reflected in the
unprecedented impact on the company's systemwide RevPAR due to the
pandemic. Although this was a rare and extreme disruption unlikely
to recur at the same magnitude, safety and health scares are an
ongoing risk. Playa has mitigating factors that we expect could
cause revenue to improve to 2019 levels or greater in 2022 if it
sustains recent improvements in occupancy, and package ADR does not
moderate significantly. Playa's recovery compares favorably with
other lodging peers due to its ownership of beachfront
all-inclusive resorts in Mexico and the Caribbean, which have
benefited from pent-up demand for leisure travel. In addition,
Playa is exposed to the risk of terror attacks, geopolitical
unrest, health scares, and other events that can have temporary but
significantly negative impacts on travel demand and financial
performance. The company's limited geographic diversity makes it
vulnerable to idiosyncratic regional events, which have included
health scares and crime concerns in recent years. Environmental
factors are a moderately negative consideration. This reflects the
company's potential exposure to severe hurricanes that impair
operations in Caribbean markets. Highly destructive storms can
diminish traveler demand and cripple local infrastructure,
potentially impairing travel volumes to Playa's key markets."
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Health and safety
POLAR POWER: Incurs $1.1 Million Net Loss in First Quarter
----------------------------------------------------------
Polar Power, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $1.12
million on $3.71 million of net sales for the three months ended
March 31, 2022, compared to a net loss of $1.90 million on $3.29
million of net sales for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $26.07 million in total
assets, $3.94 million in total liabilities, and $22.13 million in
total stockholders' equity.
Management Commentary
Arthur D. Sams, the Company's CEO said "We continue to see growth
in demand for our DC power systems. Our net sales increased 13% in
Q1 2022 as compared to Q1 2021 despite labor and supply chain
issues hampering sales and shipments.
"The increased geopolitical factors are generating increasing
interest in DC power systems for robotics and drones. In addition,
the commercial / residential markets are driven to seek greater
energy independence through increased efficiency and renewable
energy.
"Our domestic increase in sales is driven by our telecommunications
customers purchasing our DC Generators to support their 5G
infrastructure. We also see an increase in demand to export DC
power systems for programs bringing broadband to rural
communities.
"For the three-month period ending March 31, 2022, our gross profit
increased to $905 thousand, which is an improvement of 1,660%, as
compared to a gross loss of $58 thousand in the same period in
2021. Our gross margins improved to 24.4% for the quarter ended
March 31, 2022, as compared to (1.8)% for the same period in 2021.
We believe we will continue to see improvements in our gross
margins as our quarterly shipments continue to increase and we gain
from labor efficiencies in manufacturing. We believe our
manufacturing facilities are under-utilized as a result of
significant investments in manufacturing equipment and facilities
in the years right before the start of the pandemic in the U.S.
"Polar Power management is focused on managing the disruptions with
our supply chain shortages, extended lead times, increasing prices,
and labor shortages which is slowing down new product developments
and marketing. We are also experiencing challenges sourcing
qualified workers to add to our production and engineering teams.
"Overseas sales to telecommunications customers are showing growth
after long marketing investments. In April 2022, we received a PO
from a telecommunications customer in the South Pacific Islands in
the amount of $4.0 million for our DC generators for grid backup
and off-grid applications to supply rural areas with broadband
services. This order is part of a growing program to develop the
telecommunications infrastructure in this region. We plan to begin
deliveries mid-year 2022 and fulfil the order by the end of this
year.
"We also continue to work on diversifying our customer base and are
selling into non-telecommunication markets and applications at an
increasing rate. In March 2022, we received EPA certification on
our 4Y Toyota engine project aimed at expanding the power range to
35 kW on natural gas and LPG. Polar Power's EPA certification of
1KS and 4Y Toyota engines brings to the market (non-diesel) engines
with very low maintenance and high fuel efficiency. In addition to
meeting the telecommunications need for larger and more compact
generators our larger models have high interest from micro-grids,
peak power shaving, and EV charging.
"Our solar hybrid power systems, which integrate solar energy
storage with natural gas/LPG (propane) powered generators, are
ideal for off-grid (i.e., areas where wireless towers are not
connected to an electrical grid) and bad-grid (i.e., areas where
wireless towers are connected to an electrical grid that loses
power more than eight hours) applications."
Mr. Sams concluded, "We meet the challenges of supply chain
shortages through our production and engineering capability of
adaptation and sourcing internationally. Labor shortage is managed
by delaying some of our product development programs and many of
our employees putting in the extra effort. Our overall efforts
have resulted in an increase in sales and profits.
"I believe we are on the right side of technology and
manufacturing. The world electrical grids will not meet the
increasing need for power demand because of increasing needs in
air-conditioning, data services (server rooms), increasing
populations, and most importantly the huge shift in energy used for
transportation. Moving from diesel and gasoline to EV charging is
an unprecedented amount of energy shift from one source to another.
If cities like Los Angeles and New York have had brown / black
outs in the summer due to air-conditioning loads for over a half
century, how will they handle millions of EVs coming to charge on
the grid. This will increase the need for power generation using
wind, solar, and clean burning fuels distributed through micro /
nano grids. For energy security, homes and business will have to
rely on multiple sources of energy including Solar, natural
gas/LPG, and the grid. It will take many decades before the grid
can grow in capacity where natural gas is no longer needed. The
supply chain shortages demonstrated how important domestic
manufacturing is. Polar Power was able to overcome many supply
issues due to its vertical manufacturing capability.
"We believe Covid-19 will be a challenging factor for many years to
come and labor along with supply chains are gradually learning to
deal with it. The factories that were closed for long periods of
time are filling their backlogs thereby reducing delivery times on
new orders. Polar Power's products are aimed at addressing present
and future needs for energy while reducing environmental impact and
pollution."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1622345/000149315222013771/form10-q.htm
About Polar Power
Headquartered in Gardena, California, Polar Power, Inc. designs,
manufactures and sells direct current, or DC, power generators,
renewable energy and cooling systems for applications primarily in
the telecommunications market and, to a lesser extent, in other
markets, including military, electric vehicle charging and
residential and commercial power.
Polar Power reported a net loss of $1.41 million for the year ended
Dec. 31, 2021, a net loss of $10.87 million for the year ended Dec.
31, 2020, a net loss of $4.04 million for the year ended Dec. 31,
2019, and a net loss of $848,252 for the year ended Dec. 31, 2018.
As of Dec. 31, 2021, the Company had $27.18 million in total
assets, $3.93 million in total liabilities, and $23.25 million in
total stockholders' equity.
PRACTICAL PRACTICE: Involuntary Chapter 11 Case Summary
-------------------------------------------------------
Alleged Debtor: Practical Practice NYC, LLC
723 Ditmas Avenue
Brooklyn NY 11218-0000
Involuntary Chapter
11 Petition Date: May 23, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-11101
Judge: Hon. Elizabeth S. Stong
Petitioner's Counsel: Lawrence Morrison, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, FL 2
New York, NY 10013-0000
Tel: 212-620-0938
Email: lmorrison@m-t-law.com
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/5AATKVA/PRACTICAL_PRACTICE_NYC_LLC__nyebke-22-41110__0001.0.pdf?mcid=tGE4TAMA
Alleged creditor who signed the petition:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Vicky Siderakis & Unpaid Rent $576,692
Nikoloas Siderakis
dba Siderakis & Siderakis
98-20 Metropolitan Avenue
Forest Hills, NY 11375-0000
PRIMARY PRODUCTS: Fitch Assigns 'BB' LongTerm IDRs, Outlook Stable
------------------------------------------------------------------
Fitch Ratings assigns 'BB' Long-Term Issuer Default Ratings (IDRs)
to Primary Products Finance LLC (Primary) and Primary Products
Holdings LLC. In addition, Fitch has assigned 'BBB-'/'RR1' final
ratings to Primary's $300 million ABL revolving credit facility,
and 'BB+'/'RR2' final ratings to the $100 million senior secured
revolving facility and $1.06 billion senior secured term loan. The
company was rebranded as Primient at closing. The Rating Outlook is
Stable.
The ratings consider Primient's strong market position in the
mature corn-derived products industry for the food and industrial
markets, ample liquidity supported by good FCF expectations, and
moderate Fitch-calculated leverage (total debt to EBITDA after
associates and minorities) in the mid- to low-3x for FY 2023 and
beyond.
These factors are offset by narrow product diversification and
limited scale with EBITDA, excluding joint venture (JV) dividends,
in the upper $200 million at closing. Annual FCF, based on Fitch
assumptions in the $100 million-$125 million range, will provide
Primient with financial flexibility to invest in organic growth,
acquisitions, debt repayment and return of capital to
shareholders.
KEY RATING DRIVERS
Major Player in Mature Corn-Derived Products Industry: In July
2021, KPS Capital Partners, LP entered into an agreement to
purchase a controlling 50.1% stake in Primary, Tate & Lyle PLC's
Primary Products Segment, which serves the Americas and generated
$2.1 billion in revenue for fiscal 2021 (ended March). Tate & Lyle
completed the sale on April 1, 2022. Primient's main segments
include sweeteners (42% fiscal 2021 net revenue), industrial
starches (12%), acidulants (8%), and other co-products of the corn
wet-milling process.
Fitch views the corn-derived products industry as relatively stable
and mature with Primient positioned as one of four top players in
the U.S. Fitch's base case does not contemplate any major new
entrants or new competition; instead, large incumbents have been
diversifying capacity away from corn-derived products.
Limited Diversification, HFCS Structural Decline: Primient is
solely focused on corn-derived bulk ingredients which constrains
the ratings, while other peers such as Ingredion Incorporated
(Ingredion; BBB/Stable) and Tate & Lyle have pivoted towards higher
growth specialty ingredients markets with a heavier focus on
innovation. Fitch expects demand for HFCS (High Fructose Corn
Syrup), which generated around 28% of fiscal 2021 net revenue will
experience structural declines in the low-to-mid single digits
annually.
However, growth in demand for Primient 's other sweeteners such as
dextrose, and other corn-derived products such as industrial
starches, is projected to offset the decline in HFCS, driving
longer term revenue growth in the low single digits.
HFCS Critical for Major Customers: HFCS is a critical input for
major customers, as switching costs towards other sweetener
alternatives are high given the inherent risk with altering
formulations of packaged food products, particularly those with
historic brands, flavors and mouthfeel. Industry capacity
utilization for HFCS has remained at approximately 75% over the
last 20 years, and no new capacity has been added in the last 15
years.
Consequently, the industry has rationalized marginal facilities and
reallocated production capacity to alternative and growing uses.
While high utilization rates benefit Primient over the medium term,
the long-term reduction in capacity signals a mature HFCS market
that is in structural decline, one that other competitors continue
to exit in search of higher growth, higher margined products.
Primient maintains a material ongoing commercial relationship that
supports Tate and Lyle's food and beverage business. This is
long-term in nature with contractual volume commitments that should
help support higher plant utilization rates. Primient effectively
receives a tolling margin and distribution charge for its services
with Tate and Lyle that should result in a stable earnings stream.
Fitch also believes Primient maintains good flexibility to optimize
its grind mix to shift allocation to other products (i.e. specialty
starches, dextrose) that are growing which can help offset HFCS
declines.
Consistent EBITDA through Commodity Cycles: Primient is relatively
insulated from volatile commodity prices as approximately 75% of
volumes are produced under tolling contracts, which effectively
allows the company to earn a spread, or fixed processing fee,
regardless of the price of corn. The remaining 25% are flat price
contracts, against which Primient has historically entered into
hedging programs to help mitigate price risk. Co-products revenue
can also serve as a natural hedge to offset volatility.
Primient's EBITDA has historically shown resiliency through
commodity cycles. For example, EBITDA declined approximately 14% to
$278 million in fiscal 2015 versus fiscal 2013, while over the same
period, corn prices per bushel declined by over 40% to $4.
Fitch anticipates Primient successfully passed along higher prices
following contractual discussions with customers in late 2021 based
on comments made during Tate and Lyle's February earnings call
which is in-line with other industry peers. This should help
support improved gross profit in FY 2023. These pricing mechanisms
have included surcharges, indexed rates to key chemicals or other
measures to counter inflationary effects beyond corn.
Modestly Levered, Strong FCF: Leverage (total debt/Fitch-calculated
EBITDA after associates and minorities) in the high-3x at close is
expected to decline over the forecast period to the mid-to-low-3x.
Fitch's forecast assumes low-to-mid single digit EBITDA growth.
Fitch assumes FCF, projected in the range of $100 million-$125
million annually, could be used towards acquisitions, debt paydown
for amounts required by the credit agreement and ABL borrowings at
close for working capital considerations or return of capital to
shareholders.
Primient's capital allocation policy is expected to prioritize
growth of the business, through organic growth and potential M&A.
To the extent that there remains FCF after investing into future
growth, the company could consider distributions to shareholders.
DERIVATION SUMMARY
Primient's 'BB' rating reflects the strong market position in the
mature corn-derived products industry for the food and industrial
markets, ample liquidity supported by good FCF expectations, and
moderate Fitch-calculated leverage (total debt to EBITDA after
associates and minorities) in the mid-to-lower 3x over the forecast
period. These factors are offset by narrow product diversification
and limited scale.
Ingredion Inc.'s 'BBB' rating is supported by its globally diverse
product portfolio and stable underlying business model focused on
starches and sweeteners, with increasing exposure to higher-value,
on-trend specialty ingredients. Ingredion's business model remained
relatively resilient during coronavirus restrictions with
manageable pressure in food away-from-home given its exposure to
stable product categories.
Ingredion has taken several actions to address operating pressures
experienced prior to the coronavirus pandemic related to secular
changes in its core businesses combined with further efficiency
initiatives expected during 2021 that Fitch expects should continue
to reduce earnings volatility and support more predictable earnings
growth.
Darling's (BB+/ Stable) ratings reflect its unique global market
position as a collector and processor of waste streams from the
food industry, transforming the products into sustainable
ingredients across diverse applications in the food, feed and fuel
sectors. The company's formula-based contracts pass a significant
portion of the commodity risk to the supplier.
However, the company retains some commodity exposure that when
combined with foreign exchange risk, can mute earnings when
commodity prices are low. Darling also has significant exposure as
the largest clean-energy producer of renewable diesel in North
America through its 50% interest in the DGD joint venture.
Fitch expects Darling to manage leverage around 3.0x or less, with
leverage potentially creeping above 3.0x to consummate the
transaction and deleveraging largely through a combination of
EBITDA growth including DGD dividend contributions and debt
reduction post-transaction.
ACCO Brands Corporation's (BB/Stable) rating reflect the company's
historically consistent FCF and reasonable gross leverage, which
trended around 3x prior to operating challenges in 2020 related to
the coronavirus pandemic. The ratings are constrained by secular
challenges in the office products industry and channel shifts
within the company's customer mix, as well as the risk of further
debt-financed acquisitions into faster-growing geographies and
product categories.
Central Garden & Pet's (BB/Stable) rating reflects the company's
strong market positions within the pet and lawn and garden
segments, ample liquidity including robust FCF and moderate
leverage offset by limited scale with EBITDA in the low $300
million range. While Central could give back some of the strong
revenue gains over the past two fiscal years as consumer behavior
normalizes post-pandemic, Fitch expects modest organic revenue
growth over the long term supplemented by acquisitions, with EBITDA
margins in the 10% area and annual FCF of $100 million to $200
million. Over time, Fitch expects the company to manage leverage
within its targeted range of 3.0x to 3.5x.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Our Rating Case for the Issuer:
-- Revenues increase to around $2.4 billion in FY 2022 (March)
driven largely by the rise in corn commodity prices. In FY
2023, revenues are expected to grow in the high-single digits
reflecting elevated corn prices. Fitch assumptions also
include continued low- to mid-single declines in the HFCS
segment offset by growth in other categories including other
sweeteners including dextrose and corn syrup.;
-- Fitch-calculated EBTIDA, excluding JV dividends, expected in
the upper $200 million in fiscal 2022. Fitch expects Primary's
gross profit before fixed COGS to improve from the mix shift
towards growth in higher margined products and away from lower
margined HFCS combined with successful execution of pricing
initiatives passing through inflationary costs and targeting
approximately $70 million of gross profit savings by fiscal
2025. This supports Fitch expectation for EBITDA growth in the
low- to mid-single digits over the forecast period;
-- Fitch expects average FCF of $100 million-$125 million
annually absent considerations from commodity volatility.
Capital expenditures of approximately $115 million in FY 2023,
increasing modestly over forecast to fund efficiency
investments. The forecast does not contemplate any dividends
paid by Primient to KPS (50.1% owner) or Tate & Lyle (49.9%
owner);
-- Primient's capital allocation policy is expected to prioritize
growth of the business, through organic growth and potentially
M&A. To the extent that there remains FCF after investing into
future growth, the company could consider distributions to
shareholder;
-- Fitch-calculated Total Debt / Operating EBITDA After
Associates and Minorities is projected around the high-3x at
close declining over the forecast period to the mid- to
low-3x.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A ratings upgrade is unlikely unless Primient materially
increases EBITDA scale in excess of $400 million based on
increased product diversification away from corn derived
products and/or geographic diversification;
-- Additional considerations include a publicly articulated
financial framework to sustain gross leverage (total
debt/operating EBITDA after associates and minorities) below
3.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross leverage (total debt/operating EBITDA after associates
and minorities) sustained above 4.0x as a result of financial
performance below Fitch's expectations, and/or as a result of
large M&A debt funded transaction, or leveraging capital
returns.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Post transaction close, the total debt structure comprises of a
$300 million ABL revolver, a $100 million first lien cash flow
revolver, and a $1.06 billion first lien term loan. The ABL
revolver and the cash flow revolver have a five-year tenor,
maturing April 1, 2027, and the term loan matures April 1, 2029.
The ABL has a first lien on accounts receivable, inventory, tax
refunds, deposit accounts and related ABL priority collateral. The
cash flow revolver and the term loan are parri passu and have a
second lien on the ABL assets and a first lien on all other
tangible and intangible assets.
At deal close, liquidity was expected to be comprised of modest
cash balances, full availability on the $100 million senior secured
revolving facility, and roughly $100 million availability on the
$300 million ABL, less borrowings used for working capital
considerations and net of approximately $40 million in letters of
credit.
The ABL agreement includes a springing fixed charge coverage ratio
of 1.0x if excess availability is less than the greater of $22.5
million and 10% of the line cap. The first lien cash flow revolver
and term loan includes an excess cash flow sweep provision at 50%
with a step down to 25% at 2.25x net first lien leverage. The cash
flow revolver is subject to a springing net first lien leverage
test at 5.25x, when 35% of the facility is drawn.
ISSUER PROFILE
Primary will be a leading provider of corn-derived products,
including sweeteners (42% of fiscal 2021 net revenue), industrial
starches (12%), acidulants (8%), and other co-products of the corn
wet-milling process, across three corn wet mills, three acidulant
plants and a network of 13 grain elevators.
ESG CONSIDERATION
Primary Products Holdings LLC has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to shifting consumer preferences
with reducing sugar consumption, and more acutely reducing HFCS,
which has affected demand for certain packaged foods and beverages
with higher levels of sugars or sweeteners. Fitch expects demand
for HFCS to structurally decline in the low- to mid-single digits
annually.
These trends have caused large CPG companies, including Primary
Products Holdings LLC's major customers such as The Coca-Cola
Company and PepsiCo Inc. to modify and extend portfolios by
reformulation of brands to adapt to changing consumer behaviors.
This has a negative impact on the credit profile, and is relevant
to the rating[s] in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
PROFESSIONAL DIVERSITY: Incurs $703K Net Loss in First Quarter
--------------------------------------------------------------
Professional Diversity Network, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss attributable to the company of $703,265 on $2.05 million
of total revenues for the three months ended March 31, 2022,
compared to a net loss attributable to the company of $770,689 on
$1.48 million of total revenues for the three months ended March
31, 2021.
As of March 31, 2022, the Company had $8.15 million in total
assets, $5.56 million in total liabilities, and $2.59 million in
total stockholders' equity.
The Company stated "We continue to focus on our overall
profitability by reducing operating and overhead expenses. We have
continued to generate negative cash flows from operations, and we
expect to incur net losses for the foreseeable future, especially
considering the negative impact COVID-19 has had and may continue
on our liquidity and financial position. These conditions raise
substantial doubt about our ability to continue as a going concern.
Our ability to continue as a going concern is dependent on our
ability to further implement our business plan, raise capital, and
generate revenues.
"We are closely monitoring operating costs and capital
requirements. Our Management continues to contain and reduce costs,
including terminating non-performing employees and eliminating
certain positions, replacing and negotiating with certain vendors,
implementing a new approval process overseeing travel and other
expenses, and significantly reducing the cash compensation for
independent board directors. If we are still not successful in
sufficiently reducing our costs, we may then need to dispose of our
other assets or discontinue business lines.
"While we believe that our cash and cash equivalents at March 31,
2022 and cash flow from operations may be sufficient to meet our
working capital requirements for the fiscal year ending December
31, 2022, beyond that time frame our available funds and cash flow
from operations may not be sufficient to meet our working capital
requirements without the need to increase revenues or raise capital
by the issuance of common stock. There can be no assurances that
our business plans and actions will be successful, that we will
generate anticipated revenues, or that unforeseen circumstances
similar to COVID-19 will not require additional funding sources in
the future or require an acceleration of plans to conserve
liquidity. Future efforts to raise additional funds may not be
successful or they may not be available on acceptable terms, if at
all."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1546296/000149315222013792/form10-q.htm
About Professional Diversity
Headquartered in Chicago, Illinois, Professional Diversity Network,
Inc. -- https://www.prodivnet.com -- is a global developer and
operator of online and in-person networks that provides access to
networking, training, educational and employment opportunities for
diverse professionals. Through an online platform and its
relationship recruitment affinity groups, the Company provides its
employer clients a means to identify and acquire diverse talent and
assist them with their efforts to recruit diverse employees. Its
mission is to utilize the collective strength of its affiliate
companies, members, partners and unique proprietary platform to be
the standard in business diversity recruiting, networking and
professional development for women, minorities, veterans, LGBT and
disabled persons globally.
Professional Diversity reported a net loss of $2.76 million for the
year ended Dec. 31, 2021, a net loss of $4.35 million for the year
ended Dec. 31, 2020, compared to a net loss of $3.84 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had
$8.98 million in total assets, $5.87 million in total liabilities,
and $3.11 million in total stockholders' equity.
Wilmington, DE-based Ciro E. Adams, CPA, LLC, the Company's auditor
since 2018, in its report dated March 31, 2022, citing that the
Company has incurred significant losses, and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
PROMEDICA HEALTH: Fitch Lowers LT IDR to 'BB+', Outlook Negative
----------------------------------------------------------------
Fitch Ratings has downgraded its Long-Term Issuer Default Rating on
ProMedica Health System, OH to 'BB+' from 'BBB-'. In addition,
Fitch has downgraded approximately $1.8 billion in bonds (series
2015A, 2015B, 2018A and 2018B) issued by various issuers on behalf
of ProMedica to 'BB+' from 'BBB-''.
The Rating Outlook assigned is Negative.
SECURITY
The bonds are secured by a joint and several assignments of, and
security interest in, the gross revenues of each member of the
Obligated Group. Obligated members include: The Toledo Hospital,
Bay Park Community Hospital, Defiance Hospital, Inc., Fostoria
Hospital Association, Memorial Hospital, ProMedica Continuing Care
Services Corporation, Emma L. Bixby Medical Center, Lenawee Long
Term Care (d/b/a Provincial House of Adrian) and Mercy Memorial
Hospital Corporation.
Obligated issuers are covenanted to cause group affiliates, which
are directly or indirectly controlled by the obligated issuers, to
make monies available to the obligated issuer. In addition, there
is a 1.10x debt service ratio covenant and a day of cash on hand
covenant of 45 days. Breach of either of these two financial
covenants requires a consultant call in. HCR ManorCare Inc., is now
a tax-exempt entity and part of the Obligated Group.
ANALYTICAL CONCLUSION
The Long-Term 'BB+' rating and the assigned Outlook to Negative on
ProMedica Health System's debt reflects the systems significant
financial challenges as result of continued pressure of the
coronavirus pandemic and escalating expenses, with ProMedica
reporting a $252 million operating loss that follows several years
of weak performance.
The Negative Outlook reflects Fitch's expectation for continued and
significant pressure on operations which, when taken with
ProMedica's weak balance sheet, leaves it with very limited
financial flexibility. If leverage and liquidity metrics are not
maintained at or near current levels, the rating could be lowered
further.
Fiscal 2021 performance was driven in large part by losses in
ProMedica's senior care division, which has faced a host of
challenges related to the pandemic, including low occupancy,
staffing issues and tightening reimbursement. Management
implemented various initiatives to stem losses including divesting
of underperforming assets, cost containment and looking for
opportunities to add more profitable facilities to its portfolio.
While Fitch believes these strategies will contribute to
improvement over the longer-term, the expectation is that financial
pressure will persist over the near term as the skilled nursing
industry is expected to face significant headwinds, including
inadequate reimbursement and staffing challenges, on top of
historically thin margins.
The rating is tempered by ProMedica's' diversified revenue streams
with exposure to three distinct divisions (provider, senior care
and insurance) and its business position as the leading acute care
provider in the Toledo, OH service area. Moreover, ProMedica's
ability to monetize assets, which was demonstrated in 2021 through
the divestiture of 19 senior care facilities, as well as the sale
of 5% interest in its real estate venture with Welltower, provides
the organization with some additional flexibility should
performance fall short of expectations.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Strong Inpatient Market Share, National Presence in Senior Care
ProMedica's revenue defensibility is assessed at midrange, which
primarily reflects its leading inpatient market share in its
primary service area (PSA) of Toledo, OH. Additionally, its revenue
defensibility is further supported by its diversified business
model and national geographic presence based on the insurance and
post-acute components of its business. With the inclusion of the
HCR ManorCare, ProMedica's geographic reach is greatly expanded
beyond its acute care footprint to 28 states across the U.S.
ProMedica's insurance division, Paramount, covers 630,000 unique
members (including 301,000 dental members) across six states.
Operating Risk: 'bb'
Improved Operations; Lingering Pandemic Pressures
ProMedica's operating risk is now assessed as weak, reflecting
several years of pressured operating performance that has not met
Fitch's expectations, highlighted by a multi-year trend of
operating losses, but partially offset by healthy capital
investments, as evidenced by its low average age of plant.
Operating performance has been challenged more recently due to the
pandemic, specifically its senior care division which experienced
Covid-related admission volume declines, elevated expense levels
and reduced stimulus funds.
Fitch expects continued pressure systemwide over the next two years
with performance expected to worsen in 2022 primarily due to the
senior division, but also the loss of a significant portion of its
insurance business and persistent labor pressure in the provider
division. While performance is expected to improve beyond 2022,
Fitch expects operating losses will persist, but at reduced levels
over the medium term.
Financial Profile: 'bb'
Improved Unrestricted Reserves; Weak Net Leverage Position
ProMedica's financial profile is assessed at 'bb', which primarily
reflects its weak liquidity and high leverage position (including
operating leases). ProMedica's unrestricted cash and investments
totaled $1.9 billion, or 98-days' cash on hand (DCOH), and 41% of
cash to debt as of the 2021 FYE. Improvement in cash is expected in
2022 due to a cash infusion from the monetization of assets in the
senior care division, proceeds from the Welltower JV equity sale,
and the sale of Paramount. Beyond 2022 Fitch expects growth in
liquidity will be limited and more dependent on improvement in cash
flow.
Asymmetric Additional Risk Considerations
There are no asymmetric risk factors impacting the outstanding
ratings.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Assigning a Stable Outlook would be based on maintenance of
leverage and liquidity metrics at approximately 40% or higher;
and
-- Stabilization in operating performance.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- If operations worsen beyond management's current expectations
and operating recovery takes longer than anticipated;
-- Any deterioration in ProMedica's cash-to-adjusted debt below
40% for multiple review cycles would likely pressure the
rating.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
CREDIT PROFILE
Headquartered in Toledo, OH, ProMedica is a large, integrated
healthcare delivery system with 12 acute care hospitals (including
affiliated), a large multi-disciplinary employed medical group with
1,215 providers, and a health plan (Paramount). On a consolidated
basis, ProMedica had total revenues of $6.9 billion in fiscal 2021
(ending Dec. 31, 2021).
ProMedica built off a prior multi-year history with HCR ManorCare,
and acquired the Toledo, OH based senior care service provider,
adding a 26-state system with 157 skilled nursing facilities
([SNFs] focused on high acuity patients), another 57 assisted
living facilities (ALFs) and 116 hospice and home health offices.
Fitch's analysis is based on the results of the consolidated
entity, which includes non-obligated entities.
The HCR ManorCare addition in 2018 was funded with a $1.15 billion
debt issuance, and an accompanying $512 million equity contribution
for all of HCR ManorCare's operations. HCR ManorCare has been
converted to a not-for-profit entity, and operates as a division of
ProMedica as part of the obligated group. ProMedica's original
equity contribution of $512 million purchased a 20% ownership in
real estate venture, subsequently in January 2022 ProMedica sold 5%
of their 20% ownership to Welltower for $137.4 million with
ProMedica now owning 15% of the real estate venture.
The transaction also included a lease payment guaranteed by
ProMedica to the landlord, HCP Properties, of which ProMedica is
currently 15% owner and Welltower is 85% owner. The lease term is
initially 15 years, with two five-year renewals, and one 11-month
renewal. The terms of the lease are such that year one payment was
$179 million, with built in inflators of 1.375% the first year, and
then 2.75% for subsequent years.
Should the lease not be renewed, the landlord does have the option
to purchase all or none of the bed licenses, and all or none of the
equipment. The lease term was extended to 12/31/2026 and amended to
remove the collateral posting requirement should ProMedica's rating
fall one notch below investment grade by two more credit rating
agencies and can be waived until 12/31/2023 based on certain
financial ratios.
Revenue Defensibility
ProMedica's combined Medicaid and self-pay accounted for
approximately 21% of gross revenues in fiscal 2021, which is
consistent with its historical levels and midrange operating risk
assessment. Additionally, in fiscal 2021, Medicare and commercial
insurers comprised 45% and 33%, respectively, of gross revenues.
With the addition of HCR ManorCare, ProMedica's revenue source
characteristics are further concentrated in governmental payors.
However, Fitch believes ProMedica's broad market reach and national
presence partially mitigates concerns over its somewhat
concentrated payor mix.
ProMedica remains the market share leader for acute care services
in the Toledo metro area. Across its 12 hospitals, ProMedica
remains the inpatient leader with approximately 32% market share,
followed by Mercy Health with 22% market share. However,
ProMedica's acute care footprint expands beyond Ohio, with
hospitals located in Southeast Michigan. ProMedica employs around
1,200 physicians and providers and operates over 500 access points
across the 28 counties it serves in northwest Ohio and southeast
Michigan.
With the inclusion of its HCR ManorCare, ProMedica's footprint
expands to a national level. HCR ManorCare remains the largest
not-for-profit post-acute provider in the country with over 330
SNFs, rehabilitations centers, ALFs, and hospice/home health
agencies across 26 different states. During fiscal 2021, ProMedica
made some changes within the senior care component of its business.
ProMedica agreed to a new joint venture with Welltower for the
acquisition of nine SNF and two ALFs. Additionally, ProMedica
divested 19 SNF from its portfolio.
ProMedica is the largest fully-integrated health system with a
health plan in the state. Paramount covers approximately 630,000
unique members, including 301,000 dental members, across six
states, although Fitch notes that the health plan will be reduced
significantly in 2022 as the Ohio Department of Medicaid informed
ProMedica in 2021 that it was not selected as a future managed care
plan provider within the state beginning in June 2022.
In advance of a new Ohio Medicaid Managed Care contract, ProMedica
and Paramount Advantage have sold Anthem its existing Medicaid
contract, which includes all 257,000 Medicaid enrollees. Paramount
will continue to administer benefits for all existing members
through until the new program has been implemented. Post transfer
Paramount will manage care coordination and be at risk for Anthem
members in Northwest Ohio.
ProMedica's inpatient service area is primarily Toledo and
Southeastern Michigan, where there is operational concentration of
ProMedica's acute care assets. Overall, the service area has
generally weak demographics that are characterized by weak
population growth, median household income, and unemployment rate
trends that trail national averages. However, Fitch does not expect
any immediate payor mix deterioration and concerns over its weaker
PSA demographics are currently mitigated by ProMedica's diversified
business components and ProMedica senior care's larger geographic
footprint.
Operating Risk
ProMedica's operational performance has underperformed relative to
expectations with losses accelerating in fiscal 2021. ProMedica
reported sizeable $252 million loss from operations equal to a 0.8%
operating EBITDA margin. Management reports that while provider
volume returned to near normal levels, an industry-wide
Covid-related admission volume decline adversely impacted the
Senior Care Division.
Moreover, the system incurred a sharp increase in salaries and
wages compared to the prior year. Like many other health systems
across the nation, ProMedica needed to utilize temporary staffing,
which is paid at a much higher rate. Fiscal 2021 results follow
several years of operating losses, which were driven by the initial
disruption of the pandemic in 2020 and the operating challenges
related to funding levels within the insurance division in 2019.
ProMedica management continues to remain focused on operating
efficiencies and has numerous initiatives underway to improve
operating performance including ongoing integration savings through
its ProMedica 2025 initiatives. Management is targeting
approximately $75 million in improvement as part of ProMedica 2025
in 2022 with opportunity for additional improvement depending on
the timing of certain divestures.
Fitch notes that management has been successful in recent years,
achieving over $117 million in cost reductions off of a targeted
$80 million in 2021. Despite these initiatives, Fitch does not
expect robust improvement in operating performance over the next
year and anticipates continued losses from operations through
fiscal 2023, based on management projections and Fitch's
expectation for a slow recovery of business in the senior care
division.
ProMedica's historical capital spending has been healthy as
evidenced by its capex averaging 195% of depreciation from fiscal
years 2017-2019. However, capex spending declined significantly in
fiscal 2020 and remained well below depreciation in 2021 reflecting
management's pullback due to pandemic-related operational and cash
flow pressures. Despite the short-term capex decline, ProMedica's
average age of plant was a very low 8.7 years in fiscal 2021. Fitch
expects capex levels to hover around $200 million over the next
three years. ProMedica's capex spending is expected to be funded
via operating cash flow and unrestricted reserves, with no current
debt issuances anticipated in the near future.
Financial Profile
As of Dec. 31, 2021, ProMedica's unrestricted cash and investments
totaled $1.9 billion (excluding approximately $175 million in
Advanced Medicare Payments and deferred payroll taxes) which
translates into a weak 98 DCOH, 41% cash-to-adjusted debt, and
18.3x net adjusted debt to adjusted EBITDA. Fitch's calculation of
adjusted debt includes approximately $2.3 billion in outstanding
long-term debt and $2.2 billion in operating and finance lease
liabilities. ProMedica's leverage position remains elevated,
particularly with the inclusion of its operating lease liabilities.
Fitch expects leverage metrics will remain around current levels
over the longer-term given the expectation for weak cash flow and
funding of capital and debt obligations.
In Fitch's forward-looking baseline scenario, which is Fitch's best
estimate of a likely scenario of financial performance over the
next five years, Fitch expects that ProMedica will see further
stress in 2022 due to lingering disruptions from the coronavirus
pandemic (particularly within its senior care division) and the
loss of its Paramount Advantage program, before recovery and
stability in years three through five.
Absent another unforeseen credit event, Fitch believes ProMedica's
operating EBITDA will stabilize around 5% over the longer term.
Fitch's forward look also includes the continued optimization of
senior care assets, and the sale of real estate joint venture with
Welltower and Paramount. Under these assumptions, ProMedica shows
cash accretion in fiscal 2022 with stability in 2023 and 2024.
Fitch's forward-looking stress analysis reflects both an issuer
specific revenue stress and a portfolio sensitivity based upon
current economic conditions and expectations and ProMedica's
current portfolio asset allocation. ProMedica's portfolio remains
well diversified and liquid, which results in a manageable
portfolio loss. Under these assumptions, ProMedica's leverage
metrics decline before rebounding and recovering to levels that are
consistent with its current financial profile assessment in the
outer years. Fitch's scenario includes potential monetization of
assets, which Fitch believes affords the organization additional
financial flexibility in the event of a more prolonged or severely
stressed environment.
Asymmetric Additional Risk Considerations
No asymmetric risk factors impacted the outstanding ratings.
Debt Profile
ProMedica has approximately $2.3 billion outstanding in long-term
debt, with approximately 96% fixed-rate and 4% variable-rate.
ProMedica's debt service schedule has multiple bullet payments due
to the nature of their taxable debt structure. Currently, ProMedica
has bullet payments in 2028, 2038, 2045 and 2048. Fitch uses a
smoothed maximum annual debt service figure of approximately $155
million in its analysis and calculations.
Additionally, ProMedica has a rating covenant on a portion of its
bank debt, whereby if one rating falls below 'BB-' it would trigger
a hard default. ProMedica also maintains a defined benefit pension
plan that was frozen for all participants in 2014. The DB pension
plan was 111% funded as of fiscal 2021. ProMedica will formally
terminate its pension plan later this month with a distribution of
plan assets by the end of 2022.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
QHC FACILITIES: Seeks to Hire Dentons Davis Brown as Co-Counsel
---------------------------------------------------------------
QHC Facilities, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Iowa to employ Dentons Davis Brown,
P.C. as co-counsel with Bradshaw, Fowler, Proctor & Fairgrave,
P.C.
The firm will advise the Debtor regarding legal issues in
connection with its Chapter 11 case.
The firm requested a $30,000 retainer.
As disclosed in court filings, Dentons is a disinterested person
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Krystal R. Mikkilineni, Esq.
Dentons Davis Brown, P.C.
The Davis Brown Tower
215 10th Street, Suite 1300
Des Moines, IA, 50309
Phone: +1 515 288 2500
Fax: +1 515 243 0654
About QHC Facilities
Clive, Iowa-based QHC Facilities, LLC, operates eight skilled
nursing facilities. The facilities include Crestview Acres in
Marion as well as in Tama, Madison, Humboldt, Jackson, Webster and
Polk counties and two assisted living centers. Collectively, the
facilities have a maximum capacity of more than 700 residents. The
company employs roughly 300 full-time and part-time workers.
QHC Facilities and its affiliates filed petitions for Chapter 11
protection (Bankr. S.D. Iowa Lead Case No. 21-01643) on Dec. 29,
2021. The affiliates are QHC Management LLC, QHC Mitchellville LLC,
QHC Crestridge LLC, QHC Humboldt North LLC, QHC Winterset North
LLC, QHC Madison Square LLC, QHC Humboldt South LLC, QHC Villa
Cottages LLC, QHC Fort Dodge Villa LLC, and QHC Crestview Acres
Inc.
QHC Facilities reported $1 million in assets and $26.3 million in
liabilities as of the bankruptcy filing.
Judge Anita L. Shodeen oversees the cases.
Bradshaw Fowler Proctor & Fairgrave, PC and Dentons Davis Brown,
P.C. are the Debtors' bankruptcy counsels. Newmark Real Estate of
Dallas, LLC, and Gibbins Advisors, LLC, serve as the Debtors'
investment banker and restructuring advisor, respectively.
The U.S. Trustee for Region 12 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases. Troutman
Pepper Hamilton Sanders, LLP and Cutler Law Firm, P.C. serve as the
committee's lead bankruptcy counsel and local counsel,
respectively.
RED RIVER: Plan Exclusivity Period Extended to June 14
------------------------------------------------------
Red River Waste Solutions, LP obtained an order from the U.S.
Bankruptcy Court for the Northern District of Texas extending its
exclusivity periods to file a Chapter 11 plan and solicit
acceptances for the plan to June 14 and Aug. 16, respectively.
The extension will give the company more time to finalize
negotiating with its key creditors, and complete its sale or
recapitalization process.
Red River filed its Chapter 11 plan in February this year and
anticipates amending the plan to incorporate agreements, among
other things. The proposed plan is a "toggle" plan, which allows
for a possible recapitalization and restructuring or a sale and
distribution of sale proceeds.
Red River is currently working to pursue a sale process while
engaging with all parties to determine the best outcome for the
company and its stakeholders. To date, the company has already
identified a stalking horse bidder, entered into an asset purchase
agreement with that bidder, and filed a motion to approve its
proposed bidding process.
About Red River Waste Solutions
Red River Waste Solutions LP is a company in Dripping Springs,
Texas, that provides waste management services. It also offers
solid waste and garbage pickup, recycling, industrial waste
collection, disposal, and landfill management services.
Red River Waste Solutions sought Chapter 11 protection (Bankr. N.D.
Texas Case No. 21-42423) on Oct. 14, 2021, listing up to $50
million in assets and up to $100 million in liabilities. James
Calandra, chief restructuring officer of Red River Waste Solutions,
signed the petition.
Judge Morris oversees the case.
Marcus Alan Helt, Esq., at McDermott Will & Emery LLP, is the
Debtor's legal counsel. Stretto, Inc. is the claims and noticing
agent.
The Debtor's official committee of unsecured creditors tapped
Womble Bond Dickinson (US) LLP as legal counsel and Rock Creek
Advisors, LLC as financial advisor.
REMARK HOLDINGS: Incurs $25.4 Million Net Loss in First Quarter
---------------------------------------------------------------
Remark Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $25.43 million on $4.67 million of revenue for the three months
ended March 31, 2022, compared to a net loss of $5.46 million on
$4.41 million of revenue for the three months ended March 31,
2021.
"Our first quarter results reflected continued growth year over
year despite the well-known business challenges from continued
Covid shutdowns and the disruption of the supply chain exacerbated
by the Russian-Ukraine conflict. Momentum from last year's second
half continued with first-quarter revenue coming from construction,
education, and safety management projects, and we also launched our
metaverse project," noted Kai-Shing Tao, chairman and chief
executive officer of Remark Holdings. "We expect demand momentum
to build as our AI solutions prove their value in solving essential
business problems, allowing businesses to operate efficiently while
facing the challenges of a worldwide reduction of workforce in the
face of increasing demand for skilled labor."
As of March 31, 2022, the Company had $47.12 million in total
assets, $40.99 million in total liabilities, and $6.12 million in
total stockholders' equity.
"Our history of recurring operating losses, working capital
deficiencies and negative cash flows from operating activities give
rise to substantial doubt regarding our ability to continue as a
going concern," Remark said.
"We intend to fund our future operations and meet our financial
obligations through revenue growth from our AI offerings, as well
as through sales of our thermal-imaging products. We cannot,
however, provide assurance that revenue, income and cash flows
generated from our businesses will be sufficient to sustain our
operations in the twelve months following the filing of this Form
10-Q. As a result, we are actively evaluating strategic
alternatives including debt and equity financings and potential
sales of investment assets," the Company said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1368365/000136836522000024/mark-20220331.htm
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- delivers an integrated suite of AI
solutions that enable businesses and organizations to solve
problems, reduce risk and deliver positive outcomes. The company's
easy-to-install AI products are being rolled out in a wide range of
applications within the retail, financial, public safety and
workplace arenas. The company also owns and operates digital media
properties that deliver relevant, dynamic content and ecommerce
solutions. The company is headquartered in Las Vegas, Nevada, with
additional operations in Los Angeles, California and in Beijing,
Shanghai, Chengdu and Hangzhou, China.
Los Angeles, California-based Weinberg & Company, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 31, 2022, citing that the Company has suffered
recurring losses from operations and negative cash flows from
operating activities and has a negative working capital and a
stockholders' deficit that raise substantial doubt about its
ability to continue as a going concern.
RIVER MILL: Gets Interim Cash Collateral Access Thru Aug. 7
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Louisiana
authorized River Mill, LLC to use cash collateral on an interim
basis in an amount not to exceed $2,000 per month for maintenance
and utilities.
The Debtor is permitted to use cash in its bank account and cash
generated by its operations.
The Court says if The First, A National Banking Association,
requests support for any payments made by the Debtor, the Debtor
will provide support within three business days of the request. The
Debtor is also directed to pay $3,750 per month as adequate
protection to the Secured Creditor.
A final hearing on the matter is scheduled for August 7, 2022 at 2
p.m.
A copy of the order is available at https://bit.ly/38zD2xf from
PacerMonitor.com.
About River Mill, L.L.C.
River Mill, L.L.C. filed a Chapter 11 petition (Bankr. M.D. La.
Case No. 21-10485) on October 13, 2021. In the petition signed by
its manager, Michael D. Kimble, the Debtor estimated $1 million to
$10 million in both assets and liabilities. Fishman Haygood,
L.L.P. represents the Debtor as counsel.
The First, A National Banking Association, as secured creditor, is
represented by Bartley P. Bourgeois, Esq., at the Cohn Law Firm
LLC.
SMG INDUSTRIES: Incurs $3.6 Million Net Loss in First Quarter
-------------------------------------------------------------
SMG Industries, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.63 million on $16.18 million of revenues for the three months
ended March 31, 2022, compared to a net loss of $3.87 million on
$7.60 million of revenues for the three months ended March 31,
2021.
As of March 31, 2022, the Company had $32.03 million in total
assets, $51.40 million in total liabilities, and a total
stockholders' deficit of $19.37 million.
"Our cash flows from operations are primarily funded through our
financing activities, including our accounts receivable line of
credit facility, notes and loans, stock sales, issuing our stock
for services and various leases. Currently, we believe we will
need to continue to utilize lines of credit, borrowings, and stock
sales to sufficiently sustain our current level of operations for
the next 12
months. At present, we believe the industry and general domestic
economic activity has realized improvement relative to the period
one year ago as commodity prices have risen generating higher
customer activity in our industrial division, as well as economic
improvement from reduced COVID-19 pandemic prevalence in the
markets we operate. These economic improvements, currently
anticipated by the Company are partially offset by believed
inflationary pressures such as higher fuel prices. We likely will
require additional capital to maintain or expand operations.
Additionally, we believe any material acquisition of another
operating company would require additional outside capital
consisting of debt or equity. Failure to secure additional funds
could significantly hamper our ongoing operations particularly if a
down cycle in our industry continues further. As the business
cycle improves, and the pandemic dissipates in the markets we
serve, we plan to improve our cash flows provided in operating
activities by focusing on increasing sales by increasing
utilization of the assets we have acquired and offering higher
value services that receive higher gross margins. However, there
can be no assurances given of industry improvement, pandemic relief
or improved cash flows of our business.
"Historically, we have funded our capital expenditures internally
through cash flow, leasing, and financing arrangements. We intend
to continue to fund future capital expenditures through cash flow,
as well as through capital available to us pursuant to our line of
credit, capital from the sale of our equity securities and through
commercial leasing and financing programs."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1426506/000141057822001624/tmb-20220331x10q.htm
About SMG Industries
Headquartered in Houston, Texas, SMG Industries Inc. --
www.SMGIndustries.com -- is a growth-oriented transportation
services company focused on the domestic logistics market.
SMG Industries reported a net loss of $11.14 million for the year
ended Dec. 31, 2021, compared to a net loss of $15.87 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$29.23 million in total assets, $45.38 million in total
liabilities, and a total stockholders' deficit of $16.15 million.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
April 15, 2022, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
STEM HOLDINGS: Incurs $3.5 Million Net Loss in Second Quarter
-------------------------------------------------------------
Stem Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.46 million on $4.14 million of revenues for the three months
ended March 31, 2022, compared to a net loss of $8.63 million on
$5.49 million of revenues for the three months ended March 31,
2021.
For the six months ended March 31, 2022, the Company reported a net
loss of $7.65 million on $8.35 million of revenues compared to a
net loss of $11.91 million on $10.76 million of revenues for the
six months ended March 31, 2021.
As of March 31, 2022, the Company had $40.81 million in total
assets, $14.13 million in total liabilities, and $26.68 million in
total shareholders' equity.
On March 31, 2022, the Company had approximate balances of cash and
cash equivalents of 1.3 million, negative working capital of
approximately $2.5 million, and an accumulated deficit of $123
million.
Management believes that the Company has access to capital
resources through potential public or private issuances of debt or
equity securities. However, if the Company is unable to raise
additional capital, it may be required to curtail operations and
take additional measures to reduce costs, including reducing its
workforce, eliminating outside consultants, and reducing legal fees
to conserve its cash in amounts sufficient to sustain operations
and meet its obligations. These matters raise substantial doubt
about the Company's ability to continue as a going concern,
according to the SEC filing.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1697834/000149315222013915/form10-q.htm
About Stem Holdings
Headquartered in Boca Raton, Florida, Stem Holdings, Inc. --
http://www.stemholdings.com-- is a multi-state, vertically
integrated, cannabis company that, through its subsidiaries and its
investments, is engaged in the manufacture, possession, use, sale,
distribution or branding of cannabis, and holds licenses in the
adult use and medical cannabis marketplace in the states of Oregon,
Nevada, California, Oklahoma and Massachusetts.
Stem Holdings reported a net loss of $64 million for the year ended
Sept. 30, 2021, compared to a net loss of $11.5 million for the
year ended Sept. 30, 2020. As of Dec. 31, 2021, the Company had
$43.80 million in total assets, $13.91 million in total
liabilities, and $29.90 million in total shareholders' equity.
Deer Park, IL-based LJ Soldinger Associates, LLC, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Jan. 13, 2022, citing that the Company, and its
affiliates, had net losses of $64.4 million and $11.5 million,
negative working capital of $2.954 million and $9.235 million and
accumulated deficits of $115.750 million and $51.386 million as of
and for the year ended Sept. 30, 2021 and 2020, respectively. In
addition, the Company has commenced operations in the production
and sale of cannabis and related products, an activity that is
illegal under United States Federal law for any purpose, by way of
Title II of the Comprehensive Drug Abuse Prevention and Control Act
of 1970, otherwise known as the Controlled Substances Act of 1970.
These facts raise substantial doubt as to the Company's ability to
continue as a going concern.
T.G. UNITED INC: Hits Chapter 11 Bankruptcy
-------------------------------------------
T.G. United Inc. filed for chapter 11 protection in the Middle
District of Florida.
The Debtor filed a "bare bones" petition without the accompanying
schedules or statements.
According to court filings, T.G. United estimates between 1 and 49
unsecured creditors. The petition states that funds will be
available to unsecured creditors.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is
slated for June 6, 2022 at 1:30 P.M.
David Ambrose immediately moved the Court to lift the automatic
stay pursuant to 11 U.S.C. Sec. 362(d).
"It appears that the Debtor and its business has been sold,
post-petition, to an insider entity Wittman Pharma, Inc. The
Debtor did not seek or obtain Court approval before entering and/or
consummating this transaction," Ambrose said in court filings.
"Ambrose's debt was not satisfied by this purported sale despite
holding a perfected lien in all the Debtor's assets. It is clear
this Bankruptcy is nothing but a sham, and Ambrose should be
granted stay relief to pursue his lien rights against the
collateral that has now purportedly been transferred
to a non-debtor entity."
About T.G. United Inc.
T.G. United Inc. -- http://www.tgunited.com/-- manufactures a wide
range of solid dose products including tablets and capsules in
compliance with the OTC monograph.
T.G. United Inc. sought Chapter 11 protection in the Middle
District of Florida (Case No. 22-01831) on May 6, 2022. In the
petition filed by Andrew Wittman II, as CEO, T.G. United estimated
assets between $1 million and $10 million and estimated liabilities
between $1 million and $10 million.
TALEN ENERGY: Fitch Lowers LongTerm IDR to 'D' on Bankruptcy Filing
-------------------------------------------------------------------
Fitch Ratings has downgraded Talen Energy Supply LLC's (Talen)
Long-Term Issuer Default Rating (IDR) to 'D'. Fitch has downgraded
Talen's senior secured debt to 'CCC-'/'RR2', from 'B'/'RR1'. Fitch
has also downgraded the senior unsecured notes, including the
outstanding $100 million Pennsylvania Economic Development
Financing Authority Series A bonds, to 'C'/'RR6' from 'CCC'/'RR4'.
All ratings are removed from Rating Watch Negative.
The 'D' IDR rating reflects Talen's announcement that it has
voluntarily filed for relief under Chapter 11 of the U.S.
Bankruptcy Code on May 9, 2022. The 'CCC-'/'RR2' senior secured
note ratings and the 'C'/'RR6' senior unsecured ratings reflects
Fitch's expected recovery.
KEY RATING DRIVERS
Voluntary Chapter 11 Filing: On May 9, 2022, Talen announced it
filed for bankruptcy relief under Chapter 11 of the U.S. Bankruptcy
Code. The company faced a significant cashflow shortage as
near-term liquidity was impacted by higher cash collateral postings
and had a capital structure that Fitch viewed as untenable. A
restructuring support agreement has been reached with a group of
unsecured noteholders that collectively hold approximately 62% of
the principal amount of unsecured debt.
Constrained Liquidity and Untenable Capital Structure: Before the
proposed reorganization, Fitch believed Talen's liquidity was
constrained given the high commodity environment that resulted in
elevated collateral needs. Additionally, the company's capital
structure was untenable, with Fitch expecting Talen's recourse debt
to EBITDA to be above 10.0x at YE 2021. In Fitch's view,
sustainable leverage reduction was essential for the company to
exist as a financially viable entity, given that higher cashflows
from increased power prices would likely not be realized until
2023, and power prices would have to remain elevated for a
considerable length of time.
Recovery Analysis: Fitch rates the senior secured first lien debt
'CCC'/'RR2', indicating superior recovery, and the senior unsecured
guaranteed debt 'C'/'RR6', indicating poor recovery. Talen's first
lien indebtedness includes the Commodity Accordion Revolving Credit
Facility (RCF), Talen RCF, senior secured term loan, senior secured
notes, certain bilateral hedge agreements, and inventory repurchase
obligations. Fitch's recovery analysis assumes 5% administrative
claims and $1.76 billion of debtor-in-possession facility as super
senior to the first lien debt.
The individual security ratings at Talen are notched above or below
the IDR as a result of the relative recovery prospects in a
hypothetical default scenario. Fitch values the power-generation
assets that guarantee the parent debt using a net present value
(NPV) analysis. A similar NPV analysis is used to value the
generation assets that reside in non-guarantor subsidiaries, and
the excess equity value is added to the parent recovery prospects.
The generation asset NPVs vary significantly based on future gas
price assumptions and other variables, such as the discount rate
and heat rate forecasts in PJM, ERCOT and the Northeast.
Fitch uses the plant valuation provided by its third-party power
market consultant, Wood Mackenzie, as well as Fitch's own gas price
deck and other assumptions. The NPV analysis for Talen's generation
portfolio yields approximately $140/kW for PJM coal, $1,000/kW for
Susquehanna nuclear and an average of $500/kW for the natural gas
generation assets.
KEY ASSUMPTIONS
-- Power prices in PJM and ERCOT at a discount to current forward
prices;
-- Hedges per management's last available disclosures;
-- 2022/2023 PJM capacity auction results as announced and weaker
results for the 2023/2024 auction;
-- Maintenance capex averaging $180 million annually;
-- 2022-2023 maturities paid using cash on hand and FCF.
RATING SENSITIVITIES
Rating sensitivities are no longer applicable given the bankruptcy
filing.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
ISSUER PROFILE
Talen, a subsidiary of Talen Energy Corporation, is an independent
power producer that owns approximately 13,000MW of generation
capacity and is owned by the private equity firm, Riverstone
Holdings, LLC.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
TELKONET INC: Incurs $518K Net Loss in First Quarter
----------------------------------------------------
Telkonet, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $517,828
on $2.15 million of total net revenue for the three months ended
March 31, 2022, compared to net income of $82,739 on $1.29 million
of total net revenue for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $10.13 million in total
assets, $4.76 million in total liabilities, and $5.36 million in
total stockholders' equity.
The Company ended the period with an accumulated deficit of
($129,186,004) and total current assets in excess of current
liabilities of $5,668,680. At March 31, 2022, the Company had
$5,878,897 of cash and approximately $514,000 of availability on
its Credit Facility.
Since inception through March 31, 2022, the Company has incurred
cumulative losses of ($129,186,004) and has never generated enough
cash through operations to support its business. The Company has
made significant investments in the engineering, development and
marketing of its intelligent automation platforms, including but
not limited to, hardware and software enhancements, support
services and applications. The funding for these development
efforts has contributed to, and continues to contribute to, the
ongoing operating losses and use of cash.
"The Company took and continues to take a number of actions to
preserve cash. These actions ranged from suspending the use of
engineering consultants, cancelling all non-essential travel, not
filling certain vacancies and for certain periods, furloughing
certain employees and pay cuts for certain other employees and
suspension of the Company's 401(k) match. Receipt of PPP monies
helped the company reinstate some of cuts made. With the receipt
of the First PPP Loan on April 17, 2020, the Company was able to
lift some of these mandates in order to return necessary personnel
for the Company's ongoing operations."
In addition, on Jan. 12, 2022, the Company closed on the VDA
Transaction, resulting in additional working capital of
$5,000,000.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1094084/000168316822003611/telkonet_i10q-033122.htm
About Telkonet
Telkonet, Inc., formed in 1999 and incorporated under the laws of
the state of Utah, is the creator of the EcoSmart and the Rhapsody
Platforms of intelligent automation solutions designed to optimize
energy efficiency, comfort and analytics in support of the
emerging
Internet of Things. The platforms are deployed primarily in the
hospitality, educational, governmental and other commercial
markets, and is specified by engineers, HVAC professionals,
building owners, and building operators. The Company currently
operates in a single reportable business segment.
Telkonet reported a net loss of $412,785 in 2021, a net loss of
$3.15 million in 2020, and a net loss attributable to common
stockholders of $1.93 million in 2019.
TERRA MANAGEMENT: Unsecureds to Get 10% Under Plan
--------------------------------------------------
Terra Management Group, LLC and Littleton Main Street LLC submitted
a Plan and a Disclosure Statement.
The Plan provides for the reorganization of the Debtors under
Chapter 11 of the Bankruptcy Code. Pursuant to the Plan, the
Debtors shall restructure their secured and unsecured debts and
obligations. The Plan provides for the specification and treatment
of all creditors and Interest holders of the Debtors. The Plan is a
relatively simple chapter 11 plan of reorganization. The Plan is
intended to preserve the Debtors' business as a going concern,
retain the Debtors' employees and assets, and to restructure the
Debtors' capital structure. The Plan permits the Debtors' unsecured
claimants to elect to receive (i) a cash payment equal to 10% of
such claimant's Allowed Claim on the effective date of the Plan or
(ii) an Unsecured Claim Distribution equal to its Pro Rata share of
80% of the Debtors' Net Cash Flow generated over the five-year
period commencing on the Effective Date of the Plan. Funding for
all payments to be made under the Plan will come from capital from
the Debtors' Post Petition Lender and/or the reorganized Debtors'
continued business operations.
Class 4.a Terra Other General Unsecured Claims, which are impaired
under the Plan, consist of General Unsecured Claims against Terra
in an amount greater than $500 that does not elect to be treated as
a Convenience Claim. Class 4.a is impaired under the Plan. Any
holder of a Class 4.a Claim may elect either treatment (a) or (b)
below:
(a) The Class 4.a claimant shall receive a cash payment on the
Effective Date in an amount equal to 10% of the holder's Class 4.a
Claim. If the holder of the Class 4.a Claim elects treatment
pursuant to this subparagraph, the applicable Claim shall be deemed
Allowed and not Disputed.
(b) In the event that the holder of a Class 4.a Claim elects
treatment pursuant to this subparagraph, such holder will receive
an Unsecured Claim Distribution equal to its Pro Rata share of 80%
of the Debtors' Net Cash Flow generated over the five-year period
commencing on the Effective Date of the Plan.
(c) For the avoidance of doubt, a Class 4.a claimant shall not
receive a greater amount under the Plan than the amount of its
Allowed Claim.
Class 4.b Main Street Other General Unsecured Claims are impaired.
Class 4.b consists of General Unsecured Claims against Main Street
in an amount greater than $500 that does not elect to be treated as
a Convenience Claim. Class 4.b is impaired under the Plan. Any
holder of a Class 4.b Claim may elect either treatment (a) or (b)
below:
(a) The Class 4.b claimant shall receive a cash payment on the
Effective Date in an amount equal to 10% of the holder's Class 4.b
Claim. If the holder of the Class 4.b Claim elects treatment
pursuant to this subparagraph, the applicable Claim shall be deemed
Allowed and not Disputed.
(b) In the event that the holder of a Class 4.b Claim elects
treatment pursuant to this subparagraph, such holder will receive
an Unsecured Claim Distribution equal to its Pro Rata share of 80%
of the Debtors' Net Cash Flow generated over the five-year period
commencing on the Effective Date of the Plan.
(c) For the avoidance of doubt, a Class 4.b claimant shall not
receive a greater amount under the Plan than the amount of its
Allowed Claim.
The Post-Petition Lender shall invest up to $1,500,000.00 in the
reorganized Debtors, which shall be used to make payments required
under the Plan and for operations. The claims of the Post-Petition
Lender for new capital actually funded in connection with the Plan
may be satisfied through issuance of equity in the reorganized
Debtors upon confirmation of the Plan
Attorneys for the Debtors:
Michael J. Pankow, Esq.
Amalia Sax-Bolder, Esq.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 17th Street, Suite 2200
Denver, CO 80202
Tel: (303) 223-1100
Fax: (303) 223-1111
Email: mpankow@bhfs.com
asax-bolder@bhfs.com
A copy of the Disclosure Statement dated May 13, 2022, is available
at https://bit.ly/39sbNol from PacerMonitor.com.
About Terra Management Group and
Littleton Main Street
Terra Management Group, LLC is an Englewood, Colo.-based company
engaged in activities related to real estate.
Terra Management Group and Littleton Main Street, LLC filed their
voluntary petitions for Chapter 11 protection (Bankr. D. Colo. Lead
Case No. 21-15245) on Oct. 15, 2021. J. Marc Hendricks, president
and manager of Terra Management Group, signed the petitions. At
the time of the filing, Terra Management Group listed up to
$100,000 in assets and up to $50 million in liabilities while
Littleton listed as much as $50 million in both assets and
liabilities.
The Hon. Kimberley H. Tyson is the case judge.
The Debtors tapped Michael J. Pankow, Esq., at Brownstein Hyatt
Farber Schreck, LLP as legal counsel, and Haynie & Company as tax
accountant.
THOMASBORO LANDCO: Seeks to Hire Manning Fulton as Special Counsel
------------------------------------------------------------------
Thomasboro Landco, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Alabama to hire Manning, Fulton
& Skinner, P.A. as its special real estate counsel.
The Debtor needs the firm's legal assistance with respect to real
estate transactions in North Carolina.
Barry Mann, Esq., the primary attorney who will be providing the
services, charges an hourly fee of $500. The hourly rate for
paralegal services is $225.
As disclosed in court filings, Manning Fulton does not have a
material interest adverse to the Debtor.
The firm can be reached through:
Barry D. Mann, Esq.
Manning, Fulton & Skinner, P.A.
3605 Glenwood Ave # 500
Raleigh, NC 27612
Direct: (919) 510-9257
Main: (919) 787-8880
Fax: (919) 325-4600
Email: mann@manningfulton.com
About Thomasboro Landco
Thomasboro Landco, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ala. Case No.
22-10260) on Feb. 11, 2022, listing as much as $50 million in both
assets and liabilities. J. Marion Uter, manager, signed the
petition.
Judge Henry A Callaway presides over the case.
Edward J. Peterson, Esq., at Stichter, Riedel, Blain & Postler,
P.A. and Manning, Fulton & Skinner, P.A. serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
VERANO RECOVERY: Unsecureds Will be Paid in Full in Plan
--------------------------------------------------------
Verano Recovery, LLC, a California limited liability company,
submitted a Third Amended Disclosure Statement explaining its
Chapter 11 Plan.
The Debtor has employed legal counsel to amend and bring current
the Purchase and Performance Agreement with the City ("PAPA")
entered into on June 2, 2015, by Debtor and the City, as
subsequently amended on September 28, 2016, and July 11, 2018. The
PAPA granted approval to Debtor to acquire from the City the
balance of the remaining undeveloped land with provisions promised
to Debtor and its successors in interest, reserved for the future
development of these parcels and the overall master-plan community.
These provisions are a recorded lien on the Property, run with the
land and include the vesting of entitlements, the freezing of City
fee exactions, assistance in Community Facilities District
refunding, or pay-off of the existing CFD on the Property and
future bond issuance, and working jointly towards the completion of
the backbone infrastructure and community amenities. The PAPA,
which in simple language is merely a development agreement between
developer and the City, insured that the balance of the original
Master Plan would be under control of a single entity, Debtor,
which is integral to the overall orderly completion of the
community and serving for the enjoyment of the existing and future
homeowners. All the remaining developable parcels within the
master-planned community comprising up to 892 lots are now the
Property in this bankruptcy case.
The Debtor in conjunction with its broker, The Hoffman Company, has
been pursuing an expanded and continued marketing and advertising
campaign for the sale of the Property. As a result of these
efforts, Debtor has received multiple offers from bona fide
purchasers for over $19 million for the bulk purchase of the
Property which amounts will provide for the full satisfaction of
all Allowed Claims. Debtor has selected one of these prospective
purchasers and is engaged in negotiations towards a successful
consummation of a closing transaction. Debtor has entered into a
purchase and sale agreement ("Sale Agreement") with Northlight
Capital Partners LLC ("Buyer"). The Sale Agreement is attached
Exhibit 6. The Sale Agreement provides that Buyer will pay
$20,250,000.00 for the Property. A successful consummation of a
sale transaction can only occur after this bona fide purchaser has
conducted detailed due-diligence investigation of the Property and
confirmed its ability as a successor-in-interest to the PAPA, to
develop the Property in adherence to the approved Specific Plan and
entitlements that followed, with the approval of all governmental
agencies that govern this site. As a condition to any closing of
the sale of the Property, Debtor seeks to assume the PAPA and
assign the PAPA to any successful purchaser of the Property.
Closing of the sale of the Property is conditioned upon entry of
the Confirmation Order, which shall be a Final Order.
The Debtor projects that the aforementioned tasks will be
completed, and the sale will close on or before October 31, 2022.
The Debtor also estimates the costs of performing the combined
aforementioned tasks and the monthly operating expenses including
the payment obligations under the APO will total no more than
approximately $270,000, which proceeds will be funded by the Court
approved debtor-in-possession financing by Inland Communities. The
hearing on Debtor's motion to approve the debtor-in-possession
financing by Inland Communities was held on March 16, 2022, and the
Court approved the Financing Motion. Inland Communities, the
Manager, is a highly qualified development company and combined,
its key executives having successfully developed master planned
communities, comprising over 40,000 residential lots.
Under the Plan, Class 5 General Unsecured Claims total $810.00.
Based upon the $20,250,000 sale price of the Property, Allowed
General Unsecured Claims will be paid in full on the Effective
Date. Class 5 is impaired.
Class 6 Subordinated General Unsecured Claims total $660,222.
Based upon the $20,250,000 sale price of the Property, Allowed
Subordinated General Unsecured Claims will be paid in full on the
Effective Date. In the event that the sale of the Property does
not yield net proceeds sufficient to pay Class 6 in full, then the
DIP Financing Loan from Inland Communities shall receive priority
and be paid first before the other insider/member/affiliate loans
within Class 6 which will share pro rata in any remaining net
proceeds from the sale of the Property after payment to Inland
Communities. Class 6 is impaired.
Funding for the Plan shall come from the Debtor's sale of the
Property. Debtor is selling the Property through the Plan. The
Distributions to creditors under the Plan will be funded primarily
from the following sources: (a) the Debtor's cash on hand on the
Effective Date, and (b) the net proceeds (after payment of broker's
commissions, escrow fees and other costs of sale) from the sale of
the Property which Debtor anticipates closing on or before October
31, 2022. Debtor anticipates that the net proceeds from the sale of
the Property will be sufficient to pay off all creditors the amount
of their Allowed Claims in full.
Based upon the Sale Agreement to the Buyer, which provides for a
purchase price of $20,250,000 for the Property, the proceeds of the
Sale are anticipated to be distributed as follows:
* Administrative claims are estimated to be $974,000 (plus
escrow fees, title policy costs, transfer documentary taxes,
special title endorsements, document recordation, County ad-valorem
property tax and assessment prorations which are estimated to be
$150,000).
* Secured claims are approximately $17,070,000 .
* General Unsecured Claims are approximately $1,000 .
* Subordinated General Unsecured Claims are approximately
$660,000.
All of the above claims total $18,805,000 (this total is less than
the purchase price of the Property).
The Court will hold a hearing on whether or not to confirm the Plan
on June 22, 2022 at 2:00 p.m. (PST) at Courtroom 1539 in the Edward
R. Roybal Center and Federal Building and Courthouse, 255 E. Temple
Street, Los Angeles, CA 90012. Any such objection must be filed
and served on the Debtor, Debtor's counsel, and the Office of the
United States Trustee by June 13, 2022.
Ballots must be returned to Goe Forsythe & Hodges LLP at the
address listed immediately below so that it is actually received by
GFH at the following address by 5:00 p.m. prevailing Pacific
Standard Time, on June 13, 2022.
The deadline for the Debtor to file any declaration and
confirmation memorandum in support of confirmation of the Plan is
also June 17, 2022.
Attorneys for the Debtor:
Marc C. Forsythe, Esq.
Reem J. Bello, Esq.
GOE FORSYTHE & HODGES LLP
18101 Von Karman Ave., Ste. 1200
Irvine, California 92612
Telephone: (949) 798-2460
Facsimile: (949) 955-9437
E-mail: mforsythe@goeforlaw.com
rbello@goeforlaw.com
A copy of the Disclosure Statement dated May 13, 2022, is available
at https://bit.ly/3FLTkyU from PacerMonitor.com.
About Verano Recovery
Pasadena, Cal.-based Verano Recovery, LLC, filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Cal. Case No. 21-14127) on May 19, 2021. At the time of the
filing, the Debtor had between $10 million and $50 million in both
assets and liabilities.
Judge Sheri Bluebond presides over the case.
The Debtor tapped Goe Forsythe & Hodges, LLP as bankruptcy counsel;
Corbett Steelman & Spector and O'Neil LLP as special counsel;
Armory Consulting Co. as financial advisor; and Cline Carroll &
Bartell, LLP as accountant.
VIDEO RIVER: Posts $599K Net Income in First Quarter
----------------------------------------------------
Video River Networks, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $599,264 on $7.80 million of total revenue for the three months
ended March 31, 2022, compared to net income of $429,056 on
$665,667 of total revenue for the three months ended March 31,
2021.
As of March 31, 2022, the Company had $8.27 million in total
assets, $5.44 million in total liabilities, and $2.83 million in
total stockholders' equity.
As of March 31, 2022, the Company had a working capital of
$523,853, consisting of $74,903 in cash, $449,749 in Trading
Securities, and $800 in short-term liabilities.
For the three months period ended March 31, 2022, the Company
generated $608,933 from operating activities, used cash of $140,374
on investing activities, and used cash of $1,094,698 on financing
activities, resulting in an decrease in total cash of $626,139 and
a cash balance of $74,903 for the period.
For the three months period ended March 31, 2021, the Company
generated $141,277 from operating activities, used cash of $19,935
on investing activities, and used cash of $33,950 on financing
activities, resulting in an increase in total cash of $87,392 and a
cash balance of $89,018 for the period.
As of March 31, 2022, the Company had a cash balance of $74,903
(i.e. cash is used to fund operations).
Video River said "The Company does believe our current cash
balances will be sufficient to allow us to fund our operating plan
for the next twelve months. However, our ability to continue as a
going concern is still dependent on us obtaining adequate capital
to fund operation or maintaining consecutive quarterly
profitability. If we are unable to obtain adequate capital, or
maintaining consecutive quarterly profitability, we could be forced
to cease operations or substantially curtail its drug development
activities. These conditions could raise substantial doubt as to
our ability to continue as a going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1084475/000149315222013444/form10-q.htm
About Video River
Headquartered in Torrance, California, Video River Networks, Inc.
is a technology holding firm that operates and manages a portfolio
of Electric Vehicles, Artificial Intelligence, Machine Learning and
Robotics ("EV-AI-ML-R") assets, businesses and operations in North
America. The Company's current and target portfolio businesses and
assets include operations that design, develop, manufacture and
sell high-performance fully electric vehicles and design,
manufacture, install and sell Power Controls, Battery Technology,
Wireless Technology, and Residential utility meters and remote,
mission-critical devices mostly engineered through Artificial
Intelligence, Machine Learning and Robotic technologies NIHK's
current technology-focused business model is a result of its board
resolution on Sept. 15, 2020 to spin-in/off its specialty real
estate holding business to an operating subsidiary and then pivot
back to being a technology company.
Newhall, California-based DylanFloyd Accounting & Consulting, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 10, 2022, citing that the
Company has an accumulated deficit of $17,159,878 for the year
ended Dec. 31, 2021. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
VOYAGEUR IMAGING: Wins Interim Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Voyageur Imaging, LLC to use cash collateral on an interim basis in
accordance with the terms of the Stipulation between the Debtor and
CorTrust Bank N.A.
The Court said the Debtors are authorized to grant adequate
protection to CorTrust Bank, N.A. on the terms as set forth in the
stipulation. The replacement liens granted by the Debtor to
CorTrust Bank N.A. are approved and will have the same dignity,
priority and effect as their respective prepetition interests, if
any.
The final hearing authorizing use of cash collateral is scheduled
for June 9, 2022 at 11 a.m.
A copy of the order is available at https://bit.ly/3sP95Ql from
PacerMonitor.com.
About Voyageur Imaging, LLC
Voyageur Imaging, LLC was founded in 2011 and operates an MRI
clinic at its office in St. Paul, Minnesota. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Minn. Case No. 22-30753) on May 16, 2022. In the petition signed by
Steven Johnson, MD, as CEO, the Debtor disclosed $1,036,691 in
assets and $1,474,922 in liabilities.
Judge William J. Fisher oversees the case.
Kenneth C. Edstrom, Esq., at Sapienta Law Group is the Debtor's
counsel.
VYANT BIO: Incurs $9.2 Million Net Loss in First Quarter
--------------------------------------------------------
Vyant Bio, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $9.16
million on $303,000 of total revenue for the three months ended
March 31, 2022, compared to a net loss of $7.37 million on $203,000
of total revenue for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $32.53 million in total
assets, $10.16 million in total liabilities, and $22.37 million in
total stockholders' equity.
Vyant Bio said "The Company's operating activities have been
primarily funded with proceeds from the sale of convertible notes
and preferred stock securities. Prior to the Merger, CGI's primary
sources of liquidity had been cash collections from its customers
and funds generated from debt and equity financings. The Company
is expected to generate minimal revenue from the StemoniX business
during the first half of 2022 as it winds down its revenue
producing operations to support its internal drug discovery
programs. The Company had cash and cash equivalents of $16.4
million as of
March 31, 2022. The Company's management has projected that the
Company's cash on hand, together with the net proceeds from the
planned sale of the vivoPharm business during 2022 and proceeds
from sales of common stock pursuant to the Purchase Agreement with
Lincoln Park Capital, LLC as well as the at-the-market financing
with Canaccord Genuity, will be adequate to fund the Company's
currently planned operations into the second quarter of 2023. Such
estimate may prove to be wrong, and we could use our available
capital resources sooner than we currently expect, and/or the
capital resources that we are assuming will be present could fail
to materialize at the amounts we project or at all.
"The Company expects to continue to incur operating losses in the
future, unless and until the Company's drug discovery efforts or
other revenue from collaborators are able to demonstrate a level of
success that would lead to licensing potential. In addition, the
Company will continue to incur the costs of being public, including
legal and audit fees and director's and officer's liability
insurance. These losses have had, and will continue to have, an
adverse effect on the Company's working capital, total assets and
stockholders' equity. Because of the numerous risks and
uncertainties associated with drug discovery and development
efforts and costs associated with being a public company, the
Company is unable to predict when it will become profitable, and it
may never become profitable. Even if the Company does achieve
profitability, it may not be able to sustain or increase
profitability on a quarterly or annual basis. The Company's
inability to achieve and then maintain profitability would
negatively affect its business, financial condition, results of
operations and cash flows."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1349929/000149315222013854/form10-q.htm
About Vyant Bio
Vyant Bio, Inc. (formerly known as Cancer Genetics, Inc.) is an
innovative biotechnology company reinventing drug discovery for
complex neurodevelopmental and neurodegenerative disorders. Its
central nervous system drug discovery platform combines
human-derived organoid models of brain disease, scaled biology, and
machine learning.
Vyant Bio reported a net loss of $40.86 million for the year ended
Dec. 31, 2021, a net loss of $8.65 million for the year ended Dec.
31, 2020, a net loss of $6.71 million for the year ended Dec. 31,
2019, and a net loss of $20.37 million for the year ended Dec. 31,
2018. As of Dec. 31, 2021, the Company had $37.64 million in total
assets, $6.35 million in total liabilities, and $31.29 million in
total common stockholders' equity.
W K ZARTMAN FARMS: Starts Chapter 11 Subchapter V Case
------------------------------------------------------
W K Zartman Farms LLC filed for chapter 11 protection in the
Northern District of Indiana.
According to court filings, W K Zartman Farms estimates between 1
and 49 unsecured creditors. The petition states that funds will be
available to unsecured creditors.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is
slated for June 7, 2022 at 2:00 p.m.
About W K Zartman Farms
W K Zartman Farms LLC is an Indiana-based farm.
W K Zartman Farms sought relief under Subchapter V of Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ind. Case No. 22-30444) on May 5,
2022. In the petition filed by Kim R. Zartman, as manager/member,
W K Zartman Farms estimated assets between $1 million and $10
million and estimated liabilities between $100,000 and $500,000.
Scot T. Skekloff, of Haller & Colvin, PC, is the Debtor's counsel.
WATER WIND: Files for Chapter 11 to Stop Trustee's Sale
-------------------------------------------------------
Water Wind & Sky LLC filed for chapter 11 protection in the Western
District of Washington.
When Debtor filed for bankruptcy, there were two pending legal
matters:
* First, there was a non-judicial foreclosure matter proceeding
against Debtor. Tony Kullen, as the substitute foreclosure
trustee, had announced a Trustee's Sale of the real property that
was the secured property in the foreclosure proceeding. The sale
was scheduled for May 6, 2022.
* Second, Debtor had sued Kullen and another defendant (MGP
Beacon Guaranty, LLC; "MGP") in Washington state court. See
Complaint in WW&S v. MGP & Kullen, Kitsap County No. 22-2-00126-18.
The Debtor's Complaint pleaded a single claim against Kullen:
alleged violation of the Consumer Protection Act. The Debtor sought
only monetary relief against Kullen. Kullen did not assert any
counterclaims against Debtor (nor any cross-cl aims or third-party
claims). Neither of these pleadings have been amended.
On April 20, 2022, the Debtor moved in the state-court litigation
to enjoin the May 6, 2022 Trustee's Sale. The Debtor argued, among
other things, that it was likely to succeed on the merits of its
claim against Kullen.
On April 29, 2022, the state court denied the Debtor's motion.
Significantly, the state court found that "Plaintiff has not shown
it is likely to prevail on the merits of its claims for declaratory
judgment and violation of the Consumer Protection Act as to both
defendants."
On May 5, 2022 Debtor filed a Notice of Stay in the state-court
litigation asserting that "pursuant to 11 U.S.C. Sec. 362(a)(1),
this [entire] proceeding is automatically stayed." The Trustee's
Sale scheduled for the next day did not occur. Instead, the sale
caller announced that the foreclosure sale had been stayed due to
an order by the Bankruptcy Court. The Trustee's Sale has not been
rescheduled.
Tony Kullen has filed a motion for the Bankruptcy Court to enter an
order determining that the Debtor's pending state-court claim
against Kullen in ongoing state-court litigation is not subject to
the automatic stay provisions of 11 U.S.C. Sec. 362( a).
Alternatively, Kullen moves the Court under 11 U.S.C. ยง 362(d) for
an Orde r granting him relief from the automatic stay
in order for Kullen to file, and the state court to decide, a
motion for summary judgment dismissal of the Debtor's claim against
Kullen.
About Water Wind & Sky LLC
Water Wind & Sky LLC is a domestic limited liability company.
Water Wind & Sky sought Chapter 11 bankruptcy protection (Bankr.
W.D. Wash. Case No. 22-10752) on May 5, 2022. In the petition
filed by Mark Goldberg, as managing member, Water Wind & Sky
estimated assets between $1 million and $10 million and estimated
liabilities of $1 million and $10 million.
The Honorable Bankruptcy Judge Timothy W. Dore oversees the case.
Armand J Kornfeld, of Bush Kornfeld LLP, is the Debtor's counsel.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is
slated for June 8, 2022 at 12:00 P.M.
According to court documents, Water Wind & Sky estimates between 1
and 49 unsecured creditors. The petition states that funds will be
available to unsecured creditors.
WITHOUT WALLS PROPERTY: Chapter 11 Case Dismissed
-------------------------------------------------
Without Walls Property Solutions LLC, a single asset real estate,
filed for chapter 11 protection in the Western District of New
York.
Without Walls Property filed the petition on its own behalf,
without an
attorney. The petition was signed by Micheal Washington, as
principal of the corporation.
Micheal Washington is not an attorney licensed to practice law.
"Because [a corporation] cannot proceed pro se, the petition is a
legal nullity." In re Encore Prop. Mgmt. of W. N.Y., LLC, No.
17-21325-PRW, 2017 Bankr. LEXIS 4265, at *1 (Bankr. W.D.N.Y. Dec.
15, 2017) (Warren, J.).
Accordingly, it is ORDERED, that the petition is DISMISSED, ab
initio and sua sponte, under for cause under 11 U.S.C. Sec.
1112(b), the Court ruled.
The Chapter 11 filing fee will not, however, be refunded. While
Without Walls Property lacked the legal authority to file this
petition, the filing was not a "mistake" -- it was most assuredly
calculated to bring about a result. The petition was promptly
processed by the Clerk's Office and addressed by the Court. The
fee was properly received under 28 U.S.C. Sec. 1930(a)(3).
About Without Walls Property Solutions
Without Walls Property Solutions LLC is a Single Asset Real Estate
(as defined in 11 U.S.C. Sec. 101(51B)).
Without Walls sought Chapter 11 bankruptcy protection (Bankr.
W.D.N.Y. Case No. 22-20219) on May 6, 2022. In the petition filed
by Michael Washington, as manager, Without Walls Property Solutions
estimated assets between assets between $100,000 and $500,000 and
estimated liabilities between $100,000 and $500,000.
The Honorable Bankruptcy Judge Warren is the Debtor's counsel.
Kathleen Dunivin Schmitt is the Assistant U.S. Trustee.
YU HUA LONG: Chan/Kwan Plan Contemplates Liquidation
----------------------------------------------------
Daniel Chan and Tina Kwan submitted an Amended Chapter 11 Plan and
an Amended Disclosure Statement for Yu Hua Long Investments, LLC.
The Plan proposes to complete the liquidation of the Debtor through
a combination of:
(A) proposed elective settlements offered to the Holders of
certain Claims in Classes 2, 3 and 5, which settlements are
automatically triggered if the Holder of such Claim votes to accept
the Plan;
(B) partial subordination of the Magnus Member Claims (either as
Remaining Magnus Member Claims in Class 5 or as Settled Magnus
Capital Account Claims in Class 4);
(C) the appointment of an Estate Representative to resolve any
Disputed Claims and complete the liquidation of the Debtor's
remaining assets; and
(D) the funding of various reserves to ensure payment of Claims
and the expenses of the Estate Representative according to the Plan
priorities, terms and conditions.
The elective settlement proposed for the Carter Claim under Class 2
of the Plan would compromise certain disputes being litigated in
the Carter Litigation that the Carter Claim is not secured and/or
should be reduced, disallowed or subordinated. The amounts in
which Claim Nos. 8 and 27 would be deemed Allowed under Class 3 of
the Plan reflect a compromised reduction of the filed amounts of
such Claims for post-Petition Date interest. The elective
settlements proposed for Claim Nos. 6 and 17 under Class 3 of the
Plan would compromise certain disputes that could be raised
regarding such Claims on behalf of the Estate related to interest
accrual and/or partial satisfaction of such Claims.
The separate classification of the Magnus Member Claims from
General Unsecured Claims and the partial subordination of the
Magnus Member Claims contemplated by the Plan is based upon
arguments that could be advanced on behalf of the Estate that,
inter alia, because these Claims arise from the Holder's status as
members of Magnus (i.e. holders of "equity" interests), they must
be treated as junior to other "debt" Claims against Magnus and the
Debtor in accordance with section 510(a) of the Bankruptcy Code.
The Plan Proponents understand that the Magnus Members dispute that
the Magnus Member Claims should be subordinated to other Claims,
and that at least some of the Magnus Members have further asserted
that the transfer of the Property and the Projects rights to the
Debtor may be void or avoidable under applicable law. The
settlement of the Magnus Member Claims proposed via elective Class
4 treatment under the Plan would resolve these disputed issues by
liquidating Magnus Member Claims that are voted to accept the Plan
in Allowed amounts that correspond to documented capital
contributions made by the Magnus Members. These documented capital
contribution amounts proposed for treatment of Settled Magnus
Capital Account Claims have been reviewed and vetted by the Chapter
11 Trustee and are based upon historical financial records for
Magnus Sunhill Group, LLC.
Class 3 General Unsecured Claims total $3,868,263. Class 3
consists of Claim Nos. 6, 8, 17, 24, 27 and any other Claim that is
not otherwise classified or entitled to priority under the Plan;
these Claims either (a) have already become Allowed, (b) are deemed
Allowed under the Plan, (c) may become Allowed 1n a settled amount
proposed under the Plan if the Holder votes such Claim to accept
the Plan, or (d) will have an earmarked portion of the Disputed
Claims A reserve set aside pending a determination of the allowed
amount of such claims.
Special Bankruptcy Co-Counsel for Plan Proponents Daniel Chan and
Tina Kwan:
Nathan A. Schultz, Esq.
LAW OFFICE OF NATHAN A. SCHULTZ, P.C.
10621 Craig Road
Traverse City, MI 49686
Telephone: 310-429-7128
E-mail: nschultzesq@gmail.com
A copy of the Disclosure Statement dated May 13, 2022, is available
at https://bit.ly/3FLYH1e from PacerMonitor.com.
About Yu Hua Long Investments
Yu Hua Long Investments, LLC, is engaged in the development of real
property located in the City of Monterey Park, California.
Yu Hua Long Investments filed a Chapter 11 petition (Bankr. C.D.
Cal. Case No. 16-22745) on Sept. 26, 2016, estimating less than $1
million in both assets and liabilities.
Judge Deborah J. Saltzman presides over the case.
Timothy J. Yoo was appointed Chapter 11 trustee for the Debtor. The
Trustee hired Levene Neale Bender Yoo & Brill, LLP as bankruptcy
counsel; Re/Max Omega as broker; R.Y. Properties, Inc. as real
property consultant; and SLBiggs as accountant.
*********
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