/raid1/www/Hosts/bankrupt/TCR_Public/230525.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 25, 2023, Vol. 27, No. 144
Headlines
1325 ATLANTIC: To Seek Plan Confirmation on June 27
2ND CHANCE: Seeks Approval to Hire D Masin Consulting
540 WILLOUGHBY: Case Summary & Four Unsecured Creditors
689 ST. MARKS: Unsecured Claims, If Any, to Get 100% in 12 Months
ACCAM1 INC: Case Summary & One Unsecured Creditor
ACCESS METALS: Unsecureds to Get 10 Cents on Dollar
ADAMIS PHARMACEUTICALS: Posts $8.9M Net Loss in First Quarter
ADINA 74: May 31 Hearing on Disclosure Statement
AEQUOR MGT: June 21 Hearing on Disclosure Statement
AGOGIE INC: Unsecureds to Get Share of Income for 5 Years
ALL WAYS CONCRETE: Class 2A Unsecureds to be Paid in Full in Plan
ALMAZ TRANSPORTATION: Seeks Extension to File Plan to Sept. 19
AMERICAN HVAC: Taps The Fuller Law Firm as Bankruptcy Counsel
AMG CRITICAL: Moody's Upgrades CFR to B1 & Term Loan B to Ba2
APPLE STREET: Seeks to Hire Stokes Law as Co-Counsel
ARK LABORATORY: Gets OK to Hire Robert Bassel as Bankruptcy Counsel
ARK LABORATORY: Taps O'Keefe & Associates as Financial Advisor
ARRAY TECH: Moody's Raises CFR to B2 & Alters Outlook to Positive
ATLAS LITHIUM: Incurs $4.5 Million Net Loss in First Quarter
BARE ARMS: Seeks Cash Collateral Access
BATSU ENTERPRISES: Voluntary Chapter 11 Case Summary
BELLA VENEZIA: June 29 Hearing on Disclosure Statement
BENEFYTT TECHNOLOGIES: Case Summary & 30 Top Unsecured Creditors
BIGHORN RESTAURANTS: Taps Christensen & Co. as Accountant
BLOCKFI INC: No Deal for BlockFi Platform, Proposes Payout Plan
BLOCKFI INC: Seeks Approval of Disclosure Statement
BOLTA US LTD: June 12 Hearing on Debtor/Committee Disclosures
BROWNIE'S MARINE: Incurs $328K Net Loss in First Quarter
CAPSTACK FINANCIAL: Voluntary Chapter 11 Case Summary
CHESTNUT RIDGE: To Seek Plan Confirmation on Aug. 1
CHRISHULSERSELLSHOMES INC: Taps Maples Law Firm as Counsel
CLEARY PACKAGING: Plan to Face Objections from Cantwell-Cleary
CONTOUR OPCO: Case Summary & 20 Largest Unsecured Creditors
CONTOUR PROPCO: Case Summary & 20 Largest Unsecured Creditors
COX INDUSTRIAL: Gets OK to Hire Allen, Jones & Giles as Counsel
DFREH 1436 W: Case Summary & 20 Largest Unsecured Creditors
DIAMONDHEAD CASINO: Incurs $498K Net Loss in First Quarter
DIFFUSION PHARMACEUTICALS: Incurs $4.1M Net Loss in First Quarter
DIFFUSION PHARMACEUTICALS: William Hornung Quits as CFO
DMCC 7347 RIDGE: Case Summary & Two Unsecured Creditors
DMCC AMERICAS: Case Summary & Eight Unsecured Creditors
DMCC MANAGEMENT: Case Summary & Four Largest Unsecured Creditors
DOLPHIN ENTERTAINMENT: Posts $2.97-Mil. Net Loss in First Quarter
ESJ TOWERS: Maria Sandra Roldos Out as Committee Member
EVOKE PHARMA: Posts $2.2 Million Net Loss in First Quarter
FARMHOUSE CREATIVE: Reaches Agreement with Lender; Files Final Plan
FREE FLOW: Incurs $19K Net Loss in First Quarter
GAUCHO GROUP: Incurs $2.7 Million Net Loss in First Quarter
GLOBAL MEDICAL: Moody's Lowers CFR & First Lien Term Loan to Caa2
GULFSLOPE ENERGY: Incurs $396K Net Loss in Second Quarter
HUGHES CONTRACTING: Unsecureds Will Get 100% of Claims in Plan
IDEAL CARE: Seeks Extension to Confirm Plan to Sept. 25
INMAR INC: S&P Alters Outlook to Stable, Affirms 'B-' ICR
IYS VENTURES: Case Summary & 20 Largest Unsecured Creditors
KEN FARRINGTON: Files Emergency Bid to Use Cash Collateral
KEYSTONE GAS: Unsecureds Owed $1.18M Get 13% in Plan
LANNETT COMPANY: U.S. Trustee Appoints Creditors' Committee
LASERSHIP INC: S&P Lowers ICR to 'CCC+' on Constrained Liquidity
LINDEN CENTER: Voluntary Chapter 11 Case Summary
LPI LLC: Taps Michael D. O'Brien & Associates as Legal Counsel
LURADIANT LLC: Voluntary Chapter 11 Case Summary
MACON-BIBB COUNTY URBAN: Moody's Cuts 2018A Housing Bonds to Ba2
MICROGEM US: U.S. Trustee Appoints Creditors' Committee
NANO MAGIC: Incurs $653K Net Loss in First Quarter
NEUROEM THERAPEUTICS: Contributions & Future Income to Fund Plan
NXT ENERGY: Posts C$1.6 Million Net Loss in First Quarter
O'DAR GROUP: Gets OK to Hire Gleichenhaus as Legal Counsel
OFFSHORE SPARS: Case Summary & 20 Largest Unsecured Creditors
OFFSHORE SPARS: Seeks Cash Collateral Access
OMNIQ CORP: Incurs $3.5 Million Net Loss in First Quarter
PECOS ENTERTAINMENT: Says New Lease to Fund Plan Payments
PHINIA INC: Moody's Assigns First Time Ba1 Corporate Family Rating
PHUNWARE INC: Incurs $4.3 Million Net Loss in First Quarter
PLASKOLITE PPC: S&P Downgrades ICR to 'B-', On Watch Negative
PRECIPIO INC: Incurs $3 Million Net Loss in First Quarter
PSG MORTGAGE: Seeks to Hire Belvedere Legal as Counsel
QUEST PATENT: Incurs $939K Net Loss in First Quarter
RENNOVA HEALTH: Posts $805,560 Net Income in First Quarter
RESHAPE LIFESCIENCES: Incurs $2.7 Million Net Loss in First Quarter
ROOSEVELT INN: Unsecureds Owed $43K to Get 95% in Plan
ROYALE ENERGY: Incurs $146K Net Loss in 2022
SAN JORGE CHILDREN'S: Plan Filing Deadline Extended to May 31
SIGYN THERAPEUTICS: Incurs $1.3 Million Net Loss in First Quarter
SINTX TECHNOLOGIES: Incurs $293K Net Loss in First Quarter
SIO2 MEDICAL: U.S. Trustee Says Disclosures Inadequate
SKYVIEW ACADEMY: S&P Affirms 'BB' Rating on Charter School Bonds
SM ENERGY: S&P Raises ICR to 'BB-' on Debt Paydown, Outlook Stable
SNOW MASS: Case Summary & One Unsecured Creditor
SP STAR: Debtor Has Failed to Comply with The Court's Order
SUN PACIFIC: Incurs $106K Net Loss in First Quarter
SUNRISE REAL: Delays Filing of March 31 Quarterly Report
TAAT INTERNATIONAL: Disposable Income to Fund Plan Payments
THB CONSTRUCTION: Unsecureds Will Get 10% of Claims in 36 Months
TIGA ADVERTISING: Unsecureds Will Get 50.4% of Claims in 3 Years
TREES CORP: Delays Filing of March 31 Quarterly Report
UKG INC: Moody's Affirms 'B2' CFR, Outlook Remains Negative
V&K JACKSON INC: Future Disposable Income be Use to Fund Plan
VENUS CONCEPT: Incurs $9.6 Million Net Loss in First Quarter
VENUS CONCEPT: Signs $9M Stock Purchase Deal With EW Healthcare
VIDEO RIVER: Posts $282K Net Income in First Quarter
VMR CONTRACTORS: Court OKs Cash Collateral Access Thru June 26
VYERA PHARMACEUTICALS: Taps Epiq as Claims and Noticing Agent
WARHORSE GAMING: Moody's Assigns First Time B3 Corp. Family Rating
WARHORSE GAMING: S&P Assigns 'B-' ICR, Outlook Stable
WERNER FINCO: Moody's Affirms Caa2 CFR & Rates New Sec. Debt Caa1
WERNER FINCO: S&P Places 'CCC+' ICR on CreditWatch Positive
YAK TIMBER: Lender Seeks to Prohibit Cash Collateral Access
ZHALILOV INC: Case Summary & Nine Unsecured Creditors
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1325 ATLANTIC: To Seek Plan Confirmation on June 27
---------------------------------------------------
1325 Atlantic Realty, LLC, sought and obtained an order
conditionally approving its First Amended Disclosure Statement.
The hearing on the final approval of the Disclosure Statement and
confirmation of the First Amended Plan of Liquidation will be held
before the Honorable Nancy Hershey Lord, United States Bankruptcy
Judge, at the United States Bankruptcy Court for the Eastern
District of New York, on June 27, 2023 at 3:30 p.m. (prevailing
Eastern time), as such date may be continued or adjourned by the
Court. The hearing will be conducted using Zoom for Government.
The Debtor won an order shortening the time with respect to the
hearing on the motion for entry of an order conditionally approving
the Disclosure Statement.
About 1325 Atlantic Realty
1325 Atlantic Realty, LLC, a company in Lakewood, N.J., filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 22-40277) on Feb. 16, 2022, with up
to $50 million in assets and up to $10 million in liabilities.
Esther Green, manager, signed the petition.
Judge Nancy Hershey Lord oversees the case.
Klestadt Winters Jureller Southard & Stevens, LLP and Levine &
Associates, P.C., serve as the Debtor's bankruptcy counsel and
special litigation counsel, respectively.
2ND CHANCE: Seeks Approval to Hire D Masin Consulting
------------------------------------------------------
2ND Chance Investment Group, LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire D
Masin Consulting.
The Debtor requires a paraprofessional to help facilitate the
liquidation of its real estate assets.
D Masin will render services at $65 per hour, plus reimbursement of
out-of-pocket expenses. The firm estimates that its fees and
out-of-pocket expenses will not exceed $5,000.
As disclosed in court filings, D Masin is a "disinterested person"
pursuant to Bankruptcy Code Section 101(14).
The firm can be reached through:
Daphne Masin
D Masin Consulting
710 S Myrtle Ave, #516 Avenue
Monrovia, CA 91016
Phone: (626) 827-0262
Email: daphnemasin@dmasinconsullting
About 2ND Chance Investment Group
2ND Chance Investment Group, LLC owns in fee simple title 13 real
properties located in various locations in California and
Washington having an aggregate value of $7.02 million.
2ND Chance Investment Group sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-12142) on
Dec. 21, 2022. In the petition signed by its managing member,
Rayshon A. Foster, the Debtor disclosed $7,221,261 in assets and
$11,002,949 in liabilities.
Judge Scott C. Clarkson oversees the case.
Amanda G. Billyard, Esq., at Financial Relief Law Center, APC and
Grobstein Teeple, LLP serve as the Debtor's legal counsel and
financial advisor, respectively.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Goe Forsythe & Hodges, LLP.
540 WILLOUGHBY: Case Summary & Four Unsecured Creditors
-------------------------------------------------------
Debtor: 540 Willoughby Avenue LLC
123 Church Avenue
Brooklyn, NY 11218
Business Description: The Debtor owns a certain real property
located at 7218 Avenue M, Brooklyn NY 11234
Block 8362, Lot 47, valued at $895,000.
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-41814
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Bruce Weiner, Esq.
ROSENBERG MUSSO & WEINER, LLP
26 Court Street
Suite 2211
Brooklyn, NY 11242
Tel: 718-855-6840
Fax: 718-625-1966
Email: courts@nybankruptcy.net
Total Assets: $895,000
Total Liabilities: $1,198,000
The petition was signed by Rahim Siunykalimi as president/owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/I2NXG6I/540_Willoughby_Avenue_LLC__nyebke-23-41814__0001.0.pdf?mcid=tGE4TAMA
689 ST. MARKS: Unsecured Claims, If Any, to Get 100% in 12 Months
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689 St. Marks Avenue Inc., submitted a Disclosure Statement
accompanying Second Amended Plan of Reorganization dated May 18,
2023.
The Debtor owns a 9-unit mix use commercial building (the
"Property") at 689 St. Marks Avenue Brooklyn, New York. The
Property is encumbered by a first mortgage with original loan
amount of $1,600,000 and second mortgage with the original loan
amount of $875,000.
The mortgages are in arrears.
* First Mortgage. The Maturity Date was October 30, 2024-
Debtor was obligated to make monthly payments in or around the
amount of $8,739.10. Debor missed a totally of 11 monthly payments
before the Petition date for a total amount of $96,130.10.
* Second Mortgage. At time NPL recalled the second mortgage
there was a totally outstanding balance of $225,045.73.
Class 2 consists of the claim of the US Small Business
Administration. Class 2 shall be paid in 8 quarterly installments
commencing on first day of the month which is three months after
the Effective Date of the Plan and continuing until paid in full
with applicable statutory interest. Post-petition real estate taxes
have been paid by the Debtor. The Class 2 Claimant will retain its
liens until its claim is paid in full.
Class 5 consists of Allowed Unsecured Claims. The allowed Class 5
claims of unsecured creditors, if any, shall receive 100% of the
amount of their claim in 12 equal monthly instalments. Class 5 is
impaired under the Plan and eligible to vote.
Class 6 Equity Interest shall not be affected by the Plan and the
Class 6 interest holder shall continue to retain his equity
interest in the Reorganized Debtor following Confirmation of the
Plan. The continued retention of equity in the Reorganized Debtor
by the Class 6 interest holder is permissible by virtue of his New
Value Contribution.
The funding for the outstanding mortgage and other plan payments
shall come from or be advanced on behalf of Frank Morris. The
payments due under the Plan will be funded from the Debtor's
ongoing rental income and from Frank Morris, in the form of the
injection of such New Value Contributions as may be necessary to
fund any payments due under the Plan. New Value Contributions has
currently available $500,000 of verifiable funds that will be
disperse at confirmation of plan.
Additionally, Frank Morris is principle of a commercial entity that
is free and clear of mortgage with an approximate revenue of
15,000.
A full-text copy of the Disclosure Statement dated May 18, 2023 is
available at bit.ly/3IwWucI from PacerMonitor.com at no charge.
Proposed Counsel to the Debtor:
Moshe K. Silver, Esq.
LAW OFFICE OF MOSHE K. SILVER
347 Fifth Avenue Suite 1402-703
New York, NY 110016
Tel: (212) 444-9972
E-mail: msilverlaw@gmail.com
About 689 St. Marks Avenue
689 St. Marks Avenue, Inc., owner of a 9-unit commercial building
in Brooklyn, N.Y., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-40043) on Jan. 12,
2022. At the time of the filing, the Debtor listed as much as $10
million in both assets and liabilities.
Judge Elizabeth S. Stong oversees the case.
Moshe Kalman Silver, Esq., is the Debtor's bankruptcy attorney.
ACCAM1 INC: Case Summary & One Unsecured Creditor
-------------------------------------------------
Debtor: Accam1, Inc.
d/b/a Creative Events
12090 Metro Parkway
Fort Myers, FL 33966
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-00574
Debtor's Counsel: Jonathan Bierfeld, Esq.
MARTIN LAW FIRM
3701 Del Prado Blvd. S.
Cape Coral, FL 33904
Email: jonathan.bierfeld@martinlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Al Mueller as president.
The Debtor lists Regions Bank as its sole unsecured creditor
holding an unknown amount of claim.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NPB6FGA/ACCAM1_INC__flmbke-23-00574__0001.0.pdf?mcid=tGE4TAMA
ACCESS METALS: Unsecureds to Get 10 Cents on Dollar
---------------------------------------------------
Access Metals Trading, Inc., submitted a Plan of Reorganization for
Small Business Under Chapter 11 dated May 10, 2023.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income for the period described in
sec. 1191(c)(2) of $240,000 or $4,000 per month.
The final Plan payment is expected to be paid within 60 months of
the Effective Date.
Non-priority Unsecured Creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 10 cents on the dollar.
Under the Plan, Class 3 Non-priority Unsecured Creditors will
receive a pro-rata share of a fund of $300,000 ($260,000 if the
Plan is non-consensual. The sum is payable in payments of $5,000
per month commencing on the fifteenth day of the month after the
Effective Date. Class 3 is impaired.
A copy of the Disclosure Statement dated May 10, 2023, is available
at https://bit.ly/3nTbfiH from PacerMonitor.com.
About Access Metals Trading
Access Metals Trading, Inc., a company in San Ramon, Calif, filed
its voluntary petition for Chapter 11 protection (Bankr. N.D. Cal.
Case No. 22-40887) on July 31, 2022, with $1,465,176 in assets and
$2,364,759 in liabilities. Scott Ehrlich, president of Access
Metals Trading, signed the petition.
Judge William J. Lafferty oversees the case.
The Law Office of Gina R. Klump serves as the Debtor's legal
counsel.
ADAMIS PHARMACEUTICALS: Posts $8.9M Net Loss in First Quarter
-------------------------------------------------------------
Adamis Pharmaceuticals Corporation has filed with the Securities
and Exchange Commission its Quarterly Report on Form 10-Q
disclosing a net loss applicable to common stock of $8.94 million
on $1.45 million of net revenue for the three months ended March
31, 2023, compared to 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.
As of March 31, 2023, the Company had $9.07 million in total
assets, $18.60 million in total liabilities, $157,303 in mezzanine
equity, and a total stockholders' deficit of $9.68 million.
Adamis said, "[T]he Company has incurred substantial recurring
losses from continuing operations, negative cash flows from
operations, and is dependent on additional financing to fund
operations. The Company incurred a net loss of approximately $8.9
million for the three months ended March 31, 2023. As of March 31,
2023, the Company had an accumulated deficit of approximately
$313.5 million. These conditions raise substantial doubt about the
Company's ability to continue as a going concern within one year
after the date the financial statements are issued."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/887247/000138713123006540/admp-10q_033123.htm
About Adamis Pharmaceuticals
Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) --
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 $26.48
million for the year ended Dec. 31, 2022, compared to a net loss
applicable to common stock of $45.83 million for the year ended
Dec. 31, 2021.
San Diego, California-based BDO USA, LLP, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated March 16, 2023, 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.
ADINA 74: May 31 Hearing on Disclosure Statement
------------------------------------------------
Upon the motion of Adina 74 Realty Corp. seeking a hearing on an
expedited basis to the consider approval of the Debtor's First
Amended Disclosure Statement, Judge John P. Mastando III has
entered an order that a hearing to consider approval of the
Debtor's Disclosure Statement shall be conducted before the
Honorable John P. Mastando III, United States Bankruptcy Judge, at
the United States Bankruptcy Court for the Southern District of New
York, One Bowling Green, New York, New York on May 31, 2023 at 2:00
p.m.
Objections, if any, to the Motion may be filed and served no later
than May 25, 2023.
About Adina 74 Realty Corp.
Adina 74 Realty Corp. is a Single Asset Real Estate (as defined in
11 U.S.C. Sec. 101(51B)).
Adina 74 Realty Corp. filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11458) on Nov.
2, 2022. In the petition filed by Ezra Chammah, as president, the
Debtor reported assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
The Debtor is represented by Dawn Kirby of Kirby Aisner & Curley,
LLP.
AEQUOR MGT: June 21 Hearing on Disclosure Statement
---------------------------------------------------
Judge Joshua P. Searcy has entered an order that the hearing to
consider approval of the Disclosure Statement of Aequor Mgt, LLC
will be held by virtual means on Wednesday, June 21, 2023 at 9:30
a.m.
Wednesday, June 14, 2023, is fixed as the last day for filing and
serving written objections to the Disclosure Statement.
On or before Wednesday, May 17, 2023, the Disclosure Statement and
Plan must be distributed only to those limited number of parties
designated by Fed. R. Bankr. P. 3017(a).
About Aequor Mgt
Aequor Mgt, LLC -- https://BurroSand.com/ -- claims to be the
lowest cost producer of 100 Mesh frac sand in the Permian Basin
serving oil and gas producers. The company is based in Tyler,
Texas.
Aequor Mgt and Aequor Holdings, LLC filed petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Lead
Case No. 23-60010) on Jan. 5, 2023. At the time of the filing,
Aequor Mgt reported $1 million to $10 million in assets and $50
million to $100 million in liabilities while Aequor Holdings
reported $10 million to $50 million in both assets and
liabilities.
Judge Joshua P. Searcy oversees the cases.
The Debtors are represented by Davor Rukavina, Esq., at Munsch
Hardt Kopf & Harr, P.C.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Porter Hedges, LLP and Dundon Advisers, LLC serve as the
committee's legal counsel and financial advisor, respectively.
AGOGIE INC: Unsecureds to Get Share of Income for 5 Years
---------------------------------------------------------
Agogie, Inc., filed with the U.S. Bankruptcy Court for the District
of Delaware a Small Business Plan of Reorganization dated May 18,
2023.
The Debtor is headquartered in St. Louis, Missouri. It's a
performance sportswear and athleisure apparel company. It's in the
business of selling pant/legging products with built-in resistance
bands, the design for which is currently patent pending.
In recent years, the Debtor has incurred several hundreds of
thousands of dollars of liability in merchant cash advance
transactions, whereby the Debtor's accounts have been automatically
debited many thousands of dollars a day/week. And, as a consequence
thereof, the Debtor has been unable to secure new inventory or
maintain regular operating expenses. In part, the Debtor sought
bankruptcy relief in order to stay further automatic debits of its
accounts.
In sum, the Debtor scheduled $61,787.78 worth of assets comprised
of: (i) accounts with a total value of about $29,000; (ii) about
$30,000 of inventory owned by the Debtor1; (iii) about $1,500 of
office furniture, fixtures and equipment; and (iv)
trademark(s)/patent(s) pending with nominal value of about $500.
The Debtor scheduled about $287,000 in secured debt, about $115,000
in priority unsecured debt, and about $4.1 million in general
unsecured debt. The claims register reflects a total of about $1.9
million in total filed claims, including about $630,000 in
purported secured claims and $120,000 in purported priority
unsecured claims.
The Plan contemplates the Debtor continuing its business post
confirmation as a going concern. The Plan proposes to pay creditors
of the Debtor from funds generated by its operations as a going
concern, and from the proceeds of avoidable transfer litigation.
The Plan provides for the full payment of administrative and
priority claims in accordance with the Bankruptcy Code.
Creditors holding allowed secured claims (class 1(a)) will be paid
the full value of their collateral. Creditors holding allowed
general unsecured claims will receive the Debtor's projected
disposable income over the next 5 years through pro rata annual
distributions in accordance with the Debtor's projections.
Class 3 consists of the allowed general unsecured claims against
Debtor including any unsecured portion of the claims. Under this
Plan, Class 3 will be paid the Debtor's 5 years' worth of projected
disposable income on a pro rata basis and in accordance with the
Debtor's projections, with 5 annual installments due on August 31st
of each year for the next 5 years. Class 3 is impaired.
Class 4 consists of the claim of the Debtor's equity interest
holders. Under this Plan, the Class 4 equity interest holders will
retain all such interest. Class 4 interests are unimpaired, and
therefore Class 4 is deemed to have voted to accept the Plan.
The distributions to the creditors of the Debtor that are to be
made on and after the Effective Date under this Plan shall be
funded from the ongoing operations of the Debtor and from the
proceeds of avoidable transfer litigation.
A full-text copy of the Plan of Reorganization dated May 18, 2023
is available at https://urlcurt.com/u?l=LNnyje from
PacerMonitor.com at no charge.
Counsel to Debtor:
Jenny R. Kasen, Esq.
David A. Kasen, Esq.
Michael J. Kasen, Esq.
Kasen & Kasen, P.C.
1213 N. King Street, Suite 2
Wilmington, DE 19801
Telephone: (302) 652-3300
Facsimile: (856) 424-7565
Email: jkasen@kasenlaw.com
dkasen@kasenlaw.com
mkasen@kasenlaw.com
About Agogie Inc.
Agogie, Inc. designs and manufactures resistance integrated
clothing for the sports performance, fitness, and athleisure
industries. The company is based in Saint Louis, Mo.
Agogie sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10215) on Feb. 17,
2023, with as much as $1 million in both assets and liabilities.
Judge J. Kate Stickles oversees the case.
The Debtor tapped Kasen & Kasen, P.C., as bankruptcy counsel and
Dickinson Wright, PLLC, as special counsel.
ALL WAYS CONCRETE: Class 2A Unsecureds to be Paid in Full in Plan
-----------------------------------------------------------------
All Ways Concrete Pumping, LLC, filed with the U.S. Bankruptcy
Court for the Northern District of New York a Plan of
Reorganization for Small Business under Subchapter V dated May 18,
2023.
The Debtor is a small, family-owned company. The Debtor is owned
by Diana Sroka (51%) and Kenneth Sroka (49%).
The Plan under Chapter 11, subchapter V, of the Bankruptcy Code
proposes to pay all creditors of the Debtor in full from current
capital and future, disposable income and/or certain exit financing
loans from Five Star Bank and/or other lender. Equity interests
shall remain in place throughout the life of the Plan.
The length of the Plan is three years or such shorter time as when
all payments to be made under the Plan are completed.
The Plan provides for administrative expense and priority tax
claims, one class of secured claims, two classes of prepetition
unsecured claims, and one class of equity security holders.
The Debtor continues to operate its business and manage its
properties as a debtor in possession pursuant to section 1184 of
the Bankruptcy Code.
Class 2A consists of General Unsecured Class, excluding Claims Nos.
5 and 6 on Claims Register. Allowed unsecured claims in Class 2.A
shall be paid in full, without interest, within 20 days of the
Effective Date. The Debtor's schedules and filed proofs of claims
disclose unsecured claims totaling approximately $43,626.10 amongst
claimants.
Class 2B consists of the Claims of the Union and Funds. The Union
and Funds shall collectively receive a lump sum payment of
$1,500,000 within 20 days of the Effective Date of the Plan. The
payment of $1,500,000 shall be paid via check made out to Blitman &
King, LLP, as counsel for the Union and Funds, and shall be
distributed to the Union and Funds at the discretion of Jennifer A.
Clark of Blitman & King LLP.
The Debtor and the Union and Funds have a reached a settlement with
respect to the Union and Funds' claim against the Debtor in the
amount of $1,500,000.00, which consists of any and all amounts due
to the Union and Funds under the Highway Agreement and Building
Agreement and all related trusts or other arrangements, including
but not limited to, fringe benefit contributions and deductions,
prepetition interest, withdrawal liability amounts, liquidated
damages, collection costs, audit fees, and attorneys' fees and
costs (the "Union and Funds Unsecured Claim").
Class Three consists of Equity Interest holders. Diana Sroka shall
retain her 51% Equity Interest in the Debtor. Kenneth Sroka shall
retain his 49% Equity Interest in the Debtor.
Upon confirmation of the Plan and the occurrence of the Effective
Date, the Debtor's current management will continue in their
day-to-day management of the Debtor. Based on the Debtor's
projected cash flows in the Financial Projections prepared by the
Debtor's financial advisor, Newpoint Advisors Corporation, cash
flows from the Debtor's business will be sufficient to meet all of
Debtor's obligations under the Plan.
A full-text copy of the Plan of Reorganization dated May 18, 2023
is available at https://urlcurt.com/u?l=EZkhWJ from
PacerMonitor.com at no charge.
Co-Counsel to the Debtor in Possession:
Grayson T. Walter, Esq.
Bond, Schoeneck & King, PLLC
One Lincoln Center
Syracuse, NY 13202-1355
Tel: (315) 218-8000
Fax: 315-218-8100
Email: gwalter@bsk.com
- and -
Robert C. Folland, Esq.
Barnes & Thornburg, LLP
41 S. High Street, Suite 3300
Columbus, OH 43215-6104
Tel: 561-473-7565
Fax: 561-473-7561
E-mail: rob.folland@btlaw.com
About All Ways Concrete Pumping
All Ways Concrete Pumping, LLC, is a family-owned and operated
concrete pump company. The company is based in Auburn, N.Y.
All Ways Concrete Pumping filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D.N.Y. Case No.
23-30069) on Feb. 17, 2023, with up to $10 million in both assets
and liabilities. Francis J. Brennan has been appointed as
Subchapter V trustee.
Judge Wendy A. Kinsella oversees the case.
Bond, Schoeneck & King, PLLC, and Barnes & Thornburg, LLP, serve as
the Debtor's legal counsel. Newpoint Advisors Corporation is the
Debtor's financial advisor.
ALMAZ TRANSPORTATION: Seeks Extension to File Plan to Sept. 19
--------------------------------------------------------------
Almaz Transportation, Inc. filed a motion to extend the time to
file a Chapter 11 Small Business Plan of Reorganization and
Disclosure Statement pursuant to 11 U.S.C. Sec. 1121(e).
The Debtor, a small business debtor, specifically requests an
extension of the time period to file a Plan of Reorganization
through and including September 19, 2023, without prejudice to the
Debtor's right to seek an additional extension of such period.
In the instant case, the Debtor is an organization that primarily
operates in the Ambulance Service business / industry within the
Local & Suburban Transit & Interurban Highway Transportation
sector. The Debtor has been operating for approximately 22 years.
In order to reach an agreement with the NYS Department of Health
Medical Financial Mgmt, the Debtor sought relief by filing for
Chapter 11 bankruptcy protection.
This second extension is not made for the purpose of delay.
Another extension of the time period to file a plan is necessary
due to the fact, that the time to file a plan is set to expire on
June 21, 2022, and the Debtor needs an additional time to complete
the negotiations with the NYS Department of Health Medical
Financial Mgmt, to draft the settlement agreement, thereafter to
obtain Court approval of the mutually reached terms and to file a
plan of reorganization, incorporating settlement terms reached by
the parties and offering treatment to remaining Creditors of the
estate.
To date the Debtor is awaiting a response from the NYS Department
of Health Medical Financial Mgmt regarding its offer.
The extension of the Time period to file a plan will enable the
Debtor to harmonize the diverse and competing interests that exist
and seek to resolve any conflicts in a reasoned and balanced manner
for the benefit of all parties in interest.
Counsel for the Debtor:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Almaz Transportation
Almaz Transportation, Inc., sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42027) on
Aug. 25, 2022. In the petition signed by Yefim Sabler, president,
the Debtor disclosed under $1 million in both assets and
liabilities.
Judge Jil Mazer-Marino oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, PC, as its
counsel, and Wisdom Professional Services Inc. as accountant.
AMERICAN HVAC: Taps The Fuller Law Firm as Bankruptcy Counsel
-------------------------------------------------------------
American HVAC & Plumbing, Inc. received approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
The Fuller Law Firm, P.C.
The Debtor requires legal counsel to:
a. give advice with respect to the Debtor's powers and duties
under the Bankruptcy Code;
b. attend meetings and negotiate with representatives of
creditors and other parties involved in the Debtor's Chapter 11
case, and advise on the conduct of the case, including all of the
legal and administrative requirements of being in Chapter 11;
c. take all necessary action to protect and preserve the
Debtor's estate.
d. prepare legal papers and review monthly operating reports.
e. negotiate and prepare a plan for reorganization and all
related documents and take any necessary action to obtain
confirmation of such plan.;
f. advise the Debtor in connection with the possible sale or
refinance of its assets;
g. appear before the court and the U.S. Trustee; and
h. perform all other necessary legal services.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Lars T. Fuller $505 per hour
Joyce Lau $425 per hour
Rodrigo Franco $125 per hour
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
The firm received an advanced retainer in the amount of $21,738.
Lars Fuller, Esq., a partner at The Fuller Law Firm, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Lars T. Fuller, Esq.
The Fuller Law Firm, P.C.
60 North Keeble Avenue
San Jose, CA, 95126
Tel: (408) 295-5595
Fax: (408) 295-9852
About American HVAC & Plumbing
American HVAC and Plumbing, Inc. is an HVAC contractor in Campbell,
Calif.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-50461) on April 28.
2023, with $115,224 in assets and $2,221,984 in liabilities. Cuinn
F. Hamm, president of American HVAC and Plumbing, signed the
petition.
Judge Stephen L. Johnson oversees the case.
Lars Fuller, Esq., at the Fuller Law Firm, PC represents the Debtor
as legal counsel.
AMG CRITICAL: Moody's Upgrades CFR to B1 & Term Loan B to Ba2
-------------------------------------------------------------
Moody's Investors Service upgraded AMG Critical Materials N.V.'s
("AMG") corporate family rating to B1 from B2 and its probability
of default rating to B1-PD from B2-PD. Moody's also upgraded the
ratings of AMG's revolving credit facility ("RCF") maturing in 2026
and the term loan B ("TLB") maturing in 2028 to Ba2 from Ba3, and
affirmed a B3 rating of the Ohio Air Quality Development Authority
30-year tax-exempt revenue bonds (State of Ohio Exempt Facilities
Revenue Bonds) which are guaranteed by AMG Critical Materials N.V.,
the parent company of AMG Vanadium LLC. The speculative grade
liquidity rating is maintained at SGL-2. The ratings outlook
remains positive.
"The ratings upgrade and maintaining the positive outlook reflects
material strengthening in AMG's financial performance and credit
metrics, as well as Moody's expectations that AMG will be able to
maintain its improved credit profile following the completion of
the key growth projects in the near term", said Botir Sharipov,
Vice President – Senior Credit Officer at Moody's Investors
Service.
Upgrades:
Issuer: AMG Critical Materials N.V.
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Senior Secured Bank Credit Facility, Upgraded to Ba2 from Ba3
Affirmations:
Issuer: Ohio Air Quality Development Authority
Backed Senior Unsecured Revenue Bonds, Affirmed B3
Outlook Actions:
Issuer: AMG Critical Materials N.V.
Outlook, Remains Positive
RATINGS RATIONALE
AMG's B1 credit rating reflects its moderate financial leverage,
good liquidity, broad geographic and end market diversity. The
company has a strong market position with only a few major
competitors for most of its critical materials and sells those
materials to a number of blue-chip customers with whom it has
established long- term relationships. The importance of its
products in lightweighting, energy efficiency and carbon emissions
reduction, as well as growing exposure to lithium related products
should provide for a relatively steady customer demand over the
longer term. The rating is also supported Moody's expectations that
AMG will preserve its good liquidity position throughout its
current growth phase.
AMG's rating is constrained by its modest scale versus higher rated
manufacturers, material reliance on ferrovanadium revenues, high
capex and potential for negative free cash flow in 2024-2025.
The company will continue to benefit from the agreement with
Glencore plc for the sale of the FeV from both Cambridge and
Zanesville plants that effectively removes the market volume risk
and reduces its exposure to the ferrovanadium (FeV) price
volatility. The company's strategic focus to expand its lithium
portfolio in step with the fast-growing EV market is anticipated to
benefit its growth profile given the secular trend that is expected
from stricter emission standards and government support for
electric vehicles in multiple regions.
AMG generated $339 million in Moody's-adjusted EBITDA in 2022,
almost 3 times higher than 2021 EBITDA, benefitting from a surge in
spodumene and lithium prices, and to lesser extent, higher FeV and
tantalum prices, and the continued recovery in the commercial
aerospace market. As a result of higher earnings and modestly lower
gross debt, leverage declined to 2.2x in the LTM ended March 31,
2023 from 8.4x in 2021. The tight lithium market lifted global
lithium prices in the last two years. After hovering under
$10,000/ton for most of 2020, lithium battery-grade carbonate and
hydroxide prices increased dramatically in 2021-2022 and above
$70,000/ton in H2 2022 (CIF China, Japan, Korea). Spodumene
concentrate prices, used by the company both internally as a
feedstock for conversion plants and for tolling arrangements,
jumped to over $8,000/ton after trading for under $1,000/ton in the
prior ten years. Although prices for both spodumene and lithium
chemicals have fallen sharply in 2023 on supply chain destocking,
they are expected to remain at historically high levels.
AMG has been investing heavily in growth projects over the last few
years. Its new $320 million Zanesville FeV plant (Cambridge II) is
currently ramping up to 100% utilization. The $60 million
Spodumene1+ (SP1+) expansion project in Brazil that will add 40kt
of spodumene by the year end is nearing completion, while the
related tantalum expansion will add 110k lbs of tantalum capacity
in early 2024. The lithium facility AMG is currently building in
Germany will refine lower grade lithium chemical products into
battery grade lithium hydroxide, suitable for usage in lithium ion
battery cells. The plant will be located close to its customers and
the first module will be designed to deliver 20,000 tons per year
of battery grade hydroxide to the market by 2024. The capital cost
of the project is $150 million. Future growth plans include
building a second 20kt lithium upgrade plant in Germany and a
precursor plant in Brazil to convert spodumene into a technical
grade lithium carbonate that will serve as a feedstock for German
plants, among other projects. Moody's expect AMG's capex to remain
high in the next few years. However, Moody's also anticipate that
higher revenues from the key growth projects, robust lithium demand
and FeV prices could help AMG produce earnings and cash flows that
will support credit metrics commensurate with a rating higher than
B1 CFR.
Assuming a spodumene price of $2,250/t, which is materially below
the spot price of over $4,000/t, and FeV price of $18/lb for H2
2023, Moody's estimates that AMG will generate about $350 million
in Moody's-adjusted EBITDA in 2023 and that leverage will tick up
2.6x by the year end. Assuming even more conservative prices of
$1,750/t spodumene and $15/lb FeV, Moody's forecast that EBITDA
will decline to about $290 million in 2024 with leverage increasing
to still moderate 3.4x. At these prices, due to high capex
spending, Moody's estimate that will be free cash neutral in 2023
and modestly free cash flow negative in 2024. Leverage could remain
below 3x and free cash flow could remain positive if current
favorable lithium demand environment persists in the near and the
medium term.
The positive outlook reflects Moody's view that lithium prices
could remain strong during the next 12-18 months and that the
completion of growth projects and the continuing recovery in the
commercial aerospace sector will support strong revenue and EBITDA
generation in 2023-2024. Specifically, the positive outlook
presumes that AMG will successfully complete, ramp up and begin
generating revenues from the spodumene expansion and the lithium
hydroxide refinery projects. It also assumes that the company will
carefully manage its liquidity and will not experience any
significant issues or delays related to its growth projects.
AMG faces environmental risks typical for mining and metallurgical
companies, including site remediation, human capital and other
risks, and is subject to many environmental laws and regulations in
the countries in which it operates. These risks are tempered by the
fact that AMG upcycles waste and produces value-added products that
are used in strengthening and lightweighting, and enable energy
efficiency and reduction in carbon emissions such as lithium.
AMG's SGL-2 speculative grade liquidity rating reflects its good
liquidity profile supported by $360 million in cash and cash
equivalents and $195 million available under its $200 million
revolver. AMG has no meaningful debt maturities prior to the
maturity date of the revolver in 2026 and the term loan B in 2028.
Moody's expects the revolving facility to remain undrawn over the
rating horizon. Moody's also expects the company to have ample
headroom under its 3.5x first lien leverage covenant.
The Ba2 rating of the senior secured revolving credit facility and
senior secured term loan B reflects their priority position in the
company's capital structure. The credit facilities are secured by a
first priority lien on substantially all of the assets of several
of the company's operating subsidiaries and a first priority lien
on 100% of the capital stock (limited to 65% of voting stock for
foreign subsidiaries) of each subsidiary borrower and each material
wholly-owned subsidiary. However, the security package excludes the
assets of a number of key foreign subsidiaries that account for a
material portion of the overall assets of the company. The B3
rating of the tax-exempt unsecured bonds reflects a relatively high
proportion of secured debt and the bonds' effective subordination
to the secured debt. The bonds are issued by the Ohio Air Quality
Development Authority and guaranteed by AMG Critical Materials
N.V.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings upgrade could be considered if the company successfully
completes and ramps up the SP1+ expansion project in Brazil and the
lithium upgrading facility in Germany, generates commercial sales
from these projects, demonstrates that it can consistently generate
positive free cash flow, maintain strong operating performance and
maintain credit metrics commensurate with a rating higher than B1
CFR in various commodity price environments. Quantitatively, the
ratings could be upgraded if, on a sustained basis, leverage ratio
remains below 4.0x, an interest coverage ratio at or above 5.0x and
FCF/Debt ratio equal to or above 5% over the following 12-18
months. However, AMG's moderate scale limits its ratings upside
potential.
Negative rating pressure could develop if the company experiences
any significant issues related to its growth projects. Any material
operating disruptions, weaker than expected financial and operating
performance, or the pursuit of other debt financed growth projects
that result in deterioration of debt protection metrics could
negatively impact the company's rating. Quantitatively, the ratings
could be downgraded if the leverage is expected to be sustained
above 5.0x or the interest coverage ratio sustained below 2x. A
significant reduction in borrowing availability or liquidity could
also result in a downgrade.
AMG Critical Materials N.V. headquartered in Wayne, Pennsylvania,
operates through three divisions - Clean Energy Materials, Critical
Materials Technologies, and Critical Minerals. The Clean Energy
Materials segment produces materials used in energy storage
products such as electric vehicle batteries, grid stabilization
batteries and semiconductor capacitors. Its Critical Materials
Technologies segment designs and produces vacuum furnace equipment
and systems, titanium alloys and coatings as well as chrome metal
for aerospace, renewable energy and other industrial end-markets.
The Critical Minerals segment produces specialty metals and
chemicals and other products used in infrastructure, automotive and
other industrial applications. The company sells its products to
the transportation, infrastructure, energy, and specialty metals &
chemicals end markets from production facilities in Germany, the
United Kingdom, France, United States, China, Mexico, Brazil and
India. The company produced revenues of about $1.7 billion for the
twelve months ended March 31, 2023.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
APPLE STREET: Seeks to Hire Stokes Law as Co-Counsel
----------------------------------------------------
Apple Street One Twenty, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Utah to employ Stokes Law,
PLLC as co-counsel with Ascent Law.
The firm's services include:
a. advising the Debtor with respect to its powers and duties;
b. taking all necessary action to protect and preserve the
Debtor's estate;
c. assisting in preparing schedules, statements and legal
papers;
d. representing the Debtor in connection with all appearances;
e. assisting in presenting the Debtor's proposed Chapter 11 plan
of reorganization and all related transactions;
f. representing the Debtor in connection with the hearing on
plan confirmation and all related matters; and
g. all other necessary legal services.
The firm will be paid at these rates:
Attorneys $350 per hour
Paralegals $75 to $125 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Ascent Law received a retainer of $35,000 from the Debtor, which
agreed to pay the firm $3,500 per month commencing on June 20 as an
additional retainer.
Ted Stokes, Esq., a partner at Stokes Law, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Ted F. Stokes, Esq.
Stokes Law, PLLC
2072 North Main Suite 102
North Logan, UT 84341
Telephone: (435) 213-4771
Facsimile: (888) 443-1529
Email: ted@stokeslawpllc.com
About Apple Street One Twenty
Apple Street One Twenty, LLC, a company in Salt Lake City, Utah,
filed its voluntary petition for Chapter 11 protection (Bankr. D.
Utah Case No. 23-21870) on May 10, 2023, with as much as $1 million
to $10 million in both assets and liabilities. Steven K. Walker,
manager at Apple Street One Twenty, signed the petition.
Judge Joel T. Marker oversees the case.
Ascent Law and Stokes Law, PLLC serve as the Debtor's legal
counsels.
ARK LABORATORY: Gets OK to Hire Robert Bassel as Bankruptcy Counsel
-------------------------------------------------------------------
Ark Laboratory, LLC received approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to hire Robert Bassel,
Esq., a practicing attorney in Clinton, Mich., to handle its
Chapter 11 case.
Mr. Basel received a retainer of $7,500, including the filing fee
of $1,738.
In court papers, Mr. Basel disclosed that he is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
Mr. Basel can be reached at:
Robert Bassel, Esq.
P.O. Box T
Clinton, MI 49236
Phone: (248) 677-1234
Email: bbassel@gmail.com
About Ark Laboratory
Ark Laboratory, LLC owns and operates a medical laboratory in
Waterford, Mich.
Ark Laboratory sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43403) on April 12,
2023. In the petition signed by its principal, James Grossi, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Maria L. Oxholm oversees the case.
The Debtor tapped Robert N. Bassel, Esq., a practicing attorney in
Clinton, Mich., as bankruptcy counsel; and O'Keefe & Associates
Consulting, LLC as financial advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Taft Stettinius &
Hollister, LLP.
ARK LABORATORY: Taps O'Keefe & Associates as Financial Advisor
--------------------------------------------------------------
Ark Laboratory, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Michigan to hire O'Keefe & Associates
Consulting, LLC as its financial advisor.
The Debtor requires a financial advisor to analyze and review
financial information, provide financial advice, prepare financial
analysis and assist in obtaining confirmation of a Chapter 11 plan
of reorganization.
Russell Long, member of O'Keefe, will charge $460 per hour for his
services.
The firm received a retainer of $10,000.
Mr. Long disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Russell Long
O'Keefe & Associates Consulting LLC
2 Lone Pine Road
Bloomfield Hills, MI 48304
Phone: 248-593-4810
Fax: 248-593-6108
Email: rlong@okeefellc.com
About Ark Laboratory
Ark Laboratory, LLC owns and operates a medical laboratory in
Waterford, Mich.
Ark Laboratory sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43403) on April 12,
2023. In the petition signed by its principal, James Grossi, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Maria L. Oxholm oversees the case.
The Debtor tapped Robert N. Bassel, Esq., a practicing attorney in
Clinton, Mich., as bankruptcy counsel; and O'Keefe & Associates
Consulting, LLC as financial advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Taft Stettinius &
Hollister, LLP.
ARRAY TECH: Moody's Raises CFR to B2 & Alters Outlook to Positive
-----------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating and
Probability of Default Rating of Array Tech, Inc. to B2 and B2-PD,
respectively, from B3 and B3-PD. Concurrently, Moody's upgraded
Array's senior secured first lien bank credit facilities ratings to
Ba3 from B1. The company's Speculative Grade Liquidity ("SGL")
rating was upgraded to SGL-2 from SGL-3, reflecting good liquidity.
The outlook was changed to positive from stable.
The ratings upgrade and change in outlook to positive reflects
Moody's expectation that the company will sustain cash flow
improvement achieved through meaningfully increased profitability
and working capital efficiencies. Further, Moody's expects the
improved profitability to be supported by favorable demand
fundamentals in the solar power sector. Proactive actions
undertaken to address the impact of raw material cost volatility in
its contract terms also supports Array's upgrade.
The upgrade of the speculative grade liquidity rating to SGL-2 from
SGL-3 reflects Moody's expectation that the company will maintain
good liquidity, underpinned by healthy free cash flow stemming from
increased profitability and working capital improvements.
The following rating actions were taken:
Upgrades:
Issuer: Array Tech, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Senior Secured 1st Lien Bank Credit Facility, Upgraded to Ba3 from
B1
Outlook Actions:
Issuer: Array Tech, Inc.
Outlook, Changed to Positive from Stable
RATINGS RATIONALE
Array's B2 CFR reflects moderately high financial leverage with
debt/EBITDA of approximately 4.0x for the last twelve months ended
March, 31, 2023. Moody's considers that the improvement from over
10x debt/EBITDA in 2021 through part of 2022 is largely driven by a
meaningful increase in EBITDA. EBITDA improvement stems from both
organic and acquisition related growth that Moody's expect will be
sustained. However, Moody's also consider that Array's business is
characterized by inherent earnings and free cash flow variability
due to the project nature of the company's work. The January 2022
Soluciones Tecnicas Integrales Norland S.L. ("STI") acquisition --
while it increases scale and geographic diversity –adds
integration and execution risk given expansion in new international
markets. The company is also not immune to macroeconomic-related
supply chain and inflationary cost pressures.
The aforementioned considerations are balanced against good
liquidity, a strong market position, patent protection and strong
demand that will support revenue growth in 2023 and 2024. Moody's
expects that financial leverage will moderately improve over the
next 12-18 months, stemming from backlog conversion and the
company's continued actions to mitigate inflationary and supply
chain pressures.
The outlook is positive, reflecting Moody's expectation that the
company's improved financial leverage and liquidity will be
sustained over the next 12 to 18 months. Backlog conversion to
sales and the benefits of higher pricing in new contracts as well
as positive solar power industry fundamentals will support
prospective demand.
The SGL-2 rating reflects Moody's expectation that the company will
maintain good liquidity. Moody's expects positive free cash flow in
2023 given the company's improved cash conversion cycle and
top-line growth. Liquidity is also supported by the company's $148
million cash balance and an undrawn $200 million revolver as of
March 31, 2023, with $160 million of availability after $40 million
of letters of credit outstanding. The company has no meaningful
near term debt maturities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Array maintains good liquidity
including strong free cash generation. Sustainment of debt/EBITDA
at or below 4.0x along with an EBITDA margin above 10% and more
clearly articulated financial policies could also support an
upgrade. The ratings could also be upgraded if the nature of
Array's business changes such that the company demonstrates reduced
quarterly earnings and cash flow variability. Further, remediating
existing weaknesses in Array's internal controls would likely be
required for consideration of an upgrade.
The company's ratings could be downgraded if the company's
liquidity weakens, or if free cash flow turns negative while
financial leverage exceeds 5.5x. More aggressive financial
policies, including use of debt towards another sizable acquisition
or dividends rather than debt repayment would also exert downward
ratings pressure.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Headquartered in Albuquerque, New Mexico, Array Technologies, Inc.,
the parent company of Array Tech, Inc., manufactures
ground-mounting systems used in solar energy projects. Revenue
totaled approximately $1.7 billion for the twelve months ended
March 31, 2023.
ATLAS LITHIUM: Incurs $4.5 Million Net Loss in First Quarter
------------------------------------------------------------
Atlas Lithium Corporation has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $4.46 million on $0 of revenue for the three months
ended March 31, 2023, compared to a net loss of $834,743 on $477 of
revenue for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $12.38 million in total
assets, $2.53 million in total liabilities, and $9.85 million in
total stockholders' equity.
Atlas Lithium stated, "Our future short- and long-term capital
requirements will depend on several factors, including but not
limited to, the rate of our growth, our ability to identify areas
for mineral exploration and the economic potential of such areas,
the exploration and other drilling campaigns needed to verify and
expand our mineral resources, the types of processing facilities we
would need to install to obtain commercial-ready products, and the
ability to attract talent to manage our different business
activities. To the extent that our current resources are
insufficient to satisfy our cash requirements, we may need to seek
additional equity or debt financing. If the needed financing is
not available, or if the terms of financing are less desirable than
we expect, we may be forced to scale back our existing operations
and growth plans, which could have an adverse impact on our
business and financial prospects and could raise substantial doubt
about 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/1540684/000149315223017261/form10-q.htm
About Atlas Lithium
Atlas Lithium Corporations formerly Brazil Minerals, Inc. is a
mineral exploration and development company with lithium projects
and exploration properties in other critical and battery minerals,
including nickel, rare earths, graphite, and titanium, to power the
increased demand for electrification in its daily living, as
exemplified by the rise in demand for electric vehicles, and
simultaneous transition away from fossil fuels. The Company's
current focus is on developing its hard-rock lithium project
located in Minas Gerais State in Brazil at a well-known, premier
pegmatitic district in Brazil.
Atlas Lithium reported a net loss of $5.66 million in 2022, a net
loss of $4.03 million in 2021, a net loss of $1.55 million in 2020,
a net loss of $2.08 million in 2019, and a net loss of $1.85
million in 2018.
BARE ARMS: Seeks Cash Collateral Access
---------------------------------------
Bare Arms Limited Liability Company asks the U.S. Bankruptcy Court
for the Easter District of Kentucky for authority to use cash
collateral on an interim basis and make adequate protection
payments to Summit Bank.
In the summer of 2020, Bare Arms secured an Economic Injury
Disaster Loan in the amount of $500,000 from the U.S. Small
Business Administration. The Debtor has requested, and is waiting
to receive, the SBA loan documents. The Debtor believes, but cannot
say with certainty, that it is still within the repayment grace
period offered by the SBA.
The SBA filed a UCC financing statement with the Office of the
Kentucky Secretary of State on July 16, 2020. According to the
financing statement, the SBA Loan is secured against on all company
equipment, inventory and the proceeds therefrom.
Summit Community Bank is the company's largest creditor holding
multiple loans, including one line of credit, with a current
balance of $497,875. The related note and security agreements were
executed on August 22, 2022.
In August 2022, Summit filed A UCC Financing Statement with the
Office of the Kentucky Secretary of State. Summit Bank also filed a
UCC Financing Statement in Alabama and in Tennessee.
As of April 30, 2023, the Debtor's inventory was valued at
approximately $1 million on a cost basis as shown in the company's
balance sheet. Without waiving its right to object to any claims
or to seek a valuation of any property, the Debtor presently
believes that both the Summit LOC and the SBA Loan are fully
secured as against the company's assets.
As for the Summit LOC, Bare Arms is required to make monthly
interest payments calculated on a variable rate of interest, which
initially accrued at the rate of 5.5% per annum -- an interest rate
equal to the Prime Rate on July 27, 2022 as reported by the WSJ.
The balance of the outstanding principal is due on or before August
23, 2023.
The Debtor is current on its obligations under the Summit LOC.
Unless otherwise agreed to by Summit Bank, the Debtor proposes to
begin making monthly adequate protection payments directly to
Summit Bank starting on June 15, 2023 in an amount equal to the
outstanding principal on the Summit LOC multiplied by the Till Rate
of 9.25% per annum; the monthly adequate protection payment to
Summit Bank being equal to $3,838.
The Debtor also proposes to segregate monthly adequate protection
payments for the benefit of the SBA from its revenues, to be
disbursed to the SBA when the Debtor can obtain the loan agreements
from the SBA review the repayment terms, and locate the address to
which payments are to be sent. Adequate protection payments to the
SBA are to be calculated as the outstanding principal on the SBA
Loan multiplied by the Till Rate of 9.25% per annum; the monthly
adequate protection payment to be segregated for the benefit of the
SBA being equal to $3,854.
A hearing on the matter is set for June 6, 2023 at 10 a.m.
A copy of the motion is available at https://urlcurt.com/u?l=WVpamh
from PacerMonitor.com.
About Bare Arms Limited Liability Company
Bare Arms Limited Liability Company sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. E.D. Ky. Case No 23-10085)
on May 15, 2023. In the petition signed by William H. Bare, member
and corporate representative, the Debtor disclosed up to $10
million in both assets and liabilities.
J. Christian Dennery, Esq., at Dennery, PLLC, represents the Debtor
as legal counsel.
BATSU ENTERPRISES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Batsu Enterprises LLC
11501 E. Northwest Highway
Dallas, TX 75218
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-31012
Debtor's Counsel: Hudson Jobe, Esq.
QUILLING SELANDER LOWNDS WINSLETTE MOSER PC
2001 Bryan Street Suite 1800
Dallas, TX 75201
Tel: (214) 514-5656
Email: hjobe@qslwm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James R. Campbell as manager.
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/Q4NBT2A/Batsu_Enterprises_LLC__txnbke-23-31012__0001.0.pdf?mcid=tGE4TAMA
BELLA VENEZIA: June 29 Hearing on Disclosure Statement
------------------------------------------------------
Judge Robert A. Mark has entered an order that the Disclosure
Hearing of Bella Venezia 211, LLC will be held on June 29, 2023 at
11:30 A.M. via Zoom Video Conference.
The deadline for filing objections to the Disclosure Statement (7
days before the disclosure hearing) will be on June 22, 2023.
A full-text copy of the Amended Disclosure Statement dated May 8,
2023 is available at https://bit.ly/3W1oKcY from PacerMonitor.com
at no charge.
About Bella Venezia
Bella Venezia 211, LLC filed a petition for Chapter 11 protection
(Bankr. S.D. Fla. Case No. 22-11738) on March 2, 2022, listing as
much as $500,000 in both assets and liabilities. Laurent Bezaquen,
authorized representative, signed the petition.
Judge Robert A. Mark oversees the case.
The Debtor tapped Joel M. Aresty P.A. as legal counsel.
BENEFYTT TECHNOLOGIES: Case Summary & 30 Top Unsecured Creditors
----------------------------------------------------------------
Eighteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Benefytt Technologies, Inc. (Lead Case) 23-90566
3450 Buschwood Park Drive
Suite 200
Tampa, Florida 33618
American Service Insurance Agency LLC 23-90565
Daylight Beta Intermediate II Corp. 23-90567
Benefytt Reinsurance Solutions, LLC 23-90568
Insurance Center for Excellence, LLC 23-90569
BimSym-HPIH, LLC 23-90570
Daylight Beta Parent Corp. 23-90571
RxHelpline, LLC 23-90572
Dawn Acquisition Company, LLC 23-90573
Health Insurance Innovations Holdings, Inc. 23-90574
Sunrise Health Plans, LLC 23-90575
Daylight Beta Intermediate Corp. 23-90576
Health Plan Intermediaries Holdings, LLC 23-90577
TogetherHealth Insurance, LLC 23-90578
Healthinsurance.com, LLC 23-90579
TogetherHealth PAP, LLC 23-90580
Total Insurance Brokers, LLC 23-90581
HealthPocket, Inc. 23-90582
Business Description: The Debtors are a technology-driven
distributor of insurance products covering
Medicare-related insurance plans as well as
other types of health insurance and
supplemental products that operate in 44
states including Texas, New York,
California, and Florida.
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Judge: Hon. Christopher M. Lopez
Debtors'
General
Bankruptcy
Counsel: Patrick J. Nash, P.C.
John R. Luze, Esq.
Jeffrey T. Michalik, Esq.
Yusuf Salloum, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: patrick.nash@kirkland.com
john.luze@kirkland.com
jeff.michalik@kirkland.com
yusuf.salloum@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
Machir Stull, Esq.
Victoria N. Argeroplos, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
jwertz@jw.com
mstull@jw.com
vargeroplos@jw.com
Debtors'
Restructuring
Advisor: ANKURA CONSULTING, LLC
Debtors'
Financial
Advisor: JEFFERIES GROUP LLC
Debtors'
Claims &
Noticing Agent: STRETTO, INC.
Estimated Assets: $1 billion to $10 billion
Estimated Liabilities: $500 million to $1 billion
The petitions were signed by Michael DeVries as chief financial
officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/M6OOKTY/Benefytt_Technologies_Inc__txsbke-23-90566__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. King & Spalding LLP Trade Vendor $6,216,847
1180 Peachtree Street N.E.
17th Floor Atlanta, GA 30309
David Balser
Phone: (404) 572-2782
Email: Dbalser@KSLaw.com
2. ProMedia Trade Vendor $5,436,346
13499 Biscayne Blvd, Suite 4-5-6
Miami, FL 33181
Jonathan Peress
Phone: (917) 859-5810
3. Convergence Consulting Group Trade Vendor $774,727
2502 N. Rocky Point Dr.
Suite 650 Tampa, FL 33607
Greg Holman
Phone: (813) 968-3238
4. Anderson Kill P.C. Trade Vendor $702,054
1251 Avenue of the Americas
New York, NY 10020
Joshua Gold
Phone: (212) 278-1886
Email: Jgold@andersonkill.com
5. Assurance IQ, Inc Trade Vendor $565,296
Attn.: Chief Legal Officer
225 108th Ave. NE, Suite 820
Bellevue, WA 98004
Email: legaladmin@assurance.com
6. Cornerstone Research, Inc. Trade Vendor $495,929
Two Embarcadero Center, 20th Floor
San Francisco, CA 94111-3922
Leo Li
Phone: (415) 229-8221
7. Baker & McKenzie LLP Trade Vendor $486,357
1111 Brickell Avenue, Suite 1700
Miami, FL 33131
Ben Davis
Phone: (305) 789-8922
Email: Benjamin.davis@bakermckenzie.com
8. Data-Mail, Inc. Trade Vendor $396,186
597 North Mountain Road
Newington, CT 06111
Michelle Cech
Phone: (860) 666-0399 Ext. 0243
9. SunFireMatrix, Inc. Trade Vendor $360,000
150 Kimball Road
Carlisle, MA 01741
Ross Blair
Phone: (617) 968-2658
10. Blend360, LLC Trade Vendor $335,650
10221 Wincopin Circle, 3rd Floor
Columbia, MD 21044
Porasah White
Phone: (908) 458-9940
11. Charles River Associates Trade Vendor $332,283
200 Clarendon Street
Boston, MA 02116
Mark Waterhouse
Phone: (617) 425-3000
12. BimSym eBusiness Solutions Trade Vendor $250,000
P.O. Box 1129
Langhorne, PA 19047-1129
Rajesh Patel
Phone: (215) 639-7040
Email: patelrn@bimsym.com
13. Individual name on file Employment $240,768
Address on file Claim
Contact information on file
14. Benesch Friedlander Trade Vendor $224,728
Coplan & Aronoff
71 South Wacker Drive, Suite 1600
Chicago, IL 60606
Mark S. Eisen
Phone: (312) 212-4956
Email: MEisen@beneschlaw.com
15. Highwoods Realty Rent $187,408
Limited Partnership
3111 West Dr. M.L. King Blvd., Suite 100
Tampa, FL 33607
Ann Bazin
Phone: (813) 876-7000
16. NERA Economic Consulting Trade Vendor $155,016
1166 Avenue of the Americas, 24th Floor
New York, NY 10036
Phone: (212) 345-3000
17. Locke Lord LLP Trade Vendor $146,528
2200 Ross Avenue, Suite 2200
Dallas, TX 75201
Kurt Krolikowski
Phone: (713) 226-1595
Email: kkrolikowski@lockelord.com
18. Five9 Inc. Trade Vendor $144,010
4000 Executive Parkway, Suite 400
San Ramon, CA 94583
David W. Hill
Email: billing@five9.com
19. 2100 West Cypress Rent $130,374
Creek Road Associates
Attn: Michael Karp
1062 East Lancaster Avenue, Suite 30B
Bryn Mawr, PA 19010
John Chiango
Phone: (610) 525-3780
20. Nelson Taplin Goldwater Inc Trade Vendor $92,500
1555 Palm Beach Lakes Blvd., Suite 1510
West Palm Beach, FL 33401
Phone: (888) 684-8909
Email: mgrillo@taplinlaw.net
21. Potter Anderson & Corroon, LLP Trade Vendor $92,463
1313 North Market Street, P.O. Box 951
Wilmington, DE 19899-0951
Tyuanna Booker
Phone: (302) 984-6254
22. Foley & Lardner LLP Trade Vendor $92,008
US Bank Center
777 East Wisconsin Avenue
Milwaukee, WI 53202-5306
hone: (414) 271-2400
Email: accountsreceivable@foley.com
23. Tatum Reinsurance Trade Vendor $87,500
Intermediary LLC
331 Newman Springs Road, Building 1
4th Floor, Suite 143
Red Bank, NJ 07701
Dan Moser
Phone: (908) 216-2530
24. Ogletree Deakins Trade Vendor $85,178
P.O. Box 89
Columbia, SC 29202
ennifer Monrose Moore
Phone: (813) 221-7262
Email: jennifer.moore@ogletree.com
25. Softchoice Corporation Trade Vendor $79,321
314 W. Superior, Suite 400
Chicago, IL 60654
Phone: (416) 588-9002 Ext. 2308
Email: aradmin@softchoice.com
26. SourceLink Carolina, LLC Trade Vendor $75,188
1224 Poinsett Hwy
Greenville, SC 29609
Amy Kostos
Phone: (864) 233-2519
27. Cotiviti Inc. Trade Vendor $75,000
66 E. Wadsworth Park Dr.
Draper, UT 84020
Virginia Guerriero
Phone: (978) 816-7745
28. 3Cloud LLC Trade Vendor $68,952
3025 Highland Parkway, Suite 525
Downers Grove, IL 60515
Jim Tatro
Phone: (888) 882-9873
29. Bruch Hanna LLP Trade Vendor $67,945
1099 New York Avenue, N.W. Suite 500
Washington, DC 20001
Danielle Richardson
Phone: (202) 969-1628
Email: drichardson@bruchlawgroup.com
30. Cardenas Partners Trade Vendor $64,135
204 South Monroe Street
Tallahassee, FL 32301
Al Cardenas
Phone: (850) 222-8900
Email: AC@CardenasPartners.com
BIGHORN RESTAURANTS: Taps Christensen & Co. as Accountant
---------------------------------------------------------
Bighorn Restaurants, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Colorado to employ
Christensen & Co., CPAs.
The Debtors require an accountant to perform tax services
including, but not limited to, the preparation of annual income tax
returns and tax planning services.
The firm will be paid as follows:
Preparation of 2022 tax returns $12,000 to $15,000
Preparation of 2023 tax returns $16,000 to $19,000
Tax planning, upon request $6,000 to $12,000
The retainer is $16,000.
As disclosed in court filings, Christensen & Co. is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Todd Christensen
Christensen & Co., CPAs
1040 Partridge Place, Suite 2
Helena, MT 59602
Tel: (406) 495-9411
About Bighorn Restaurants
Bighorn Restaurants, LLC and affiliates constitute one of the
largest current franchisees of Hardee's restaurants. They currently
operate 108 restaurants, which span the states of Alabama, Florida,
Georgia, South Carolina, Kansas, Missouri, Wyoming and Montana. The
restaurants are operated by Empire, Heartland, Bighorn, and
Atlantic Star.
Bighorn Restaurants and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case
No. 23-11919) on May 4, 2023. In the petition signed by its chief
executive officer, Dewey R. Brown, Bighorn Restaurants disclosed $1
million to $10 million in assets and $10 million to $50 million in
liabilities.
Judge Michael E. Romero oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker, LLC as legal
counsel; MorrisAnderson & Associates, Ltd. as financial advisor;
and Brookwood Associates, LLC as investment banker; and BMC Group,
Inc. as noticing agent.
BLOCKFI INC: No Deal for BlockFi Platform, Proposes Payout Plan
---------------------------------------------------------------
Blockfi Inc., et al., filed a First Amended Joint Chapter 11 Plan
and a Disclosure Statement.
Intent on moving expeditiously through chapter 11, the Debtors
filed the Joint Plan of Reorganization of BlockFi Inc. and Its
Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code
(the "Initial Plan") on the first day of these Chapter 11 Cases.
The Initial Plan contemplated either a sale of substantially all of
BlockFi's assets to a third-party or a self-liquidation transaction
wherein BlockFi would return Digital Assets and cash to creditors
(the "Self-Liquidation Transaction") followed, in each case, by a
Wind Down of the Debtors' Estates. The Self-Liquidation Transaction
served as a floor for a third-party sale transaction.
Moelis prepared a comprehensive marketing strategy designed to
identify bidders for packages of the Debtors' assets, including the
BlockFi Platform, Debtors' physical self-mining assets (the
"Equipment"), loans secured by mining assets (the "Mining Loans"),
and claims against certain third-parties. With a marketing strategy
in place, on or about December 12, 2022, the Debtors, with the
assistance of Moelis, began soliciting interest in the purchase of
certain of the Debtors' Equipment and Mining Loans (together, the
"Mining Portfolio"), as well as an interest in a self-mining
facility in Spartanburg, South Carolina hosted by the Debtors'
joint venture, BV Power Alpha LLC (the "Hosting Joint Venture").
The Debtors marketed the Mining Portfolio to potential bidders as a
package, but also allowed parties to make bids on portions of the
Mining Portfolio.
These efforts were successful and generated market interest in the
Mining Portfolio -- more than seventy prospective bidders executed
nondisclosure agreements with the Debtors and engaged in further
diligence toward potentially submitting a bid for the Mining
Portfolio. Through this marketing process, the Debtors, in
consultation with Moelis and the Debtors' other advisors, concluded
that it would be value-maximizing to sell the Equipment separately
from the Debtors' interest in the Hosting Joint Venture and Mining
Loans. To that end, the Debtors and Moelis reoriented their Mining
Portfolio sale efforts to focus, in the near-term, on the marketing
and sale of the Equipment while holding, renegotiating, or
otherwise pursuing collection on the Mining Loans and continuing to
manage the Hosting Joint Venture.
In furtherance of the sale process, the Debtors filed a motion
seeking entry of an order to establish certain formal bidding
procedures for a potential sale of any or all of the Debtors'
assets. On Jan. 30, 2023, the Bankruptcy Court entered an order
approving the bidding procedures.
On Feb. 28, 2023, in accordance with the Bidding Procedures Order,
the Debtors held an auction to sell the Equipment. The Equipment
Auction was competitive and involved hard-fought, arms-length
negotiations with each participating bidder. At the conclusion of
the Equipment Auction, the Debtors, in consultation with the
Official Committee of Unsecured Creditors (the "Committee"),
concluded that U.S. Farms & Mining Opportunity Fund LLC's ("U.S.
Farms") bid for the totality of the auctioned Equipment represented
the most value-maximizing offer available to the Debtors.
On March 2, 2023, the Debtors sought Court approval to execute an
asset purchase agreement with U.S. Farms and sell the Equipment for
approximately $4.675 million. After a hearing on March 23, 2023,
the Court entered anorder approving the Debtors' proposed sale of
the Equipment to U.S. Farms.
In parallel with the marketing and sale of their Mining Portfolio,
on January 9, 2023, the Debtors and Moelis began soliciting
interest for the purchase of the BlockFi Platform. This asset
package consists of (i) an end-to-end Digital Asset platform that
offers a wide array of product offerings to both retail and
institutional users across the U.S. and internationally (the
"Digital Asset Platform"), (ii) approximately 440,000 funded U.S.
Client accounts (the "U.S. Client Accounts"), and (iii)
approximately 220,000 funded international Client accounts (the
"International Client Accounts," and together with the Digital
Asset Platform and U.S. Client Accounts, the "BlockFi Platform" and
each a "Component"). The Debtors marketed the BlockFi Platform to
potential bidders as a package while allowing parties to make
separate bids on each Component.
The Debtors and their advisors actively facilitated diligence and
engaged with potential bidders throughout this process, and
although the Debtors received a number of indications of interests
for some or all of the Components of the BlockFi Platform, the
Debtors concluded that, given recent regulatory developments, among
other things, there may be a lack of meaningful value to be
generated from a sale. Therefore, finalizing and consummating a
transaction for the BlockFi Platform would not result in an
expedient and value-maximizing transaction for the benefit of the
Debtors' creditors. Accordingly, the Debtors are proceeding with
the Self-Liquidation Transaction whereby the Debtors will
distribute their assets to creditors in accordance with the terms
of the Plan, followed by a Wind Down of their affairs.
The Debtors, however, continue to evaluate their options, and to
the extent the Debtors determine that an alternative transaction
providing for the sale of all, or substantially all, of the
Debtors' assets (an "Alternative Transaction") would provide more
value to stakeholders than the Plan, the Debtors will pursue the
Alternative Transaction, and will provide Holders of Claims and
Interests with additional information and revised documents, as
applicable.
Under the Plan, unsecured claims will be treated as follows:
* Class 4-a BlockFi Lending LLC General Unsecured Claims total
$1.1 million. Its projected recovery is 83.5% to 100.0%, compared
to a liquidation recovery of 74.0% - 100.0%. Each Holder of an
Allowed BlockFi Lending LLC General Unsecured Claim will receive in
full and final satisfaction of such Allowed BlockFi Lending LLC
General Unsecured Claim, its Pro Rata share of (i) the Cash
Allocation for Holders of Claims at BlockFi Lending LLC and (ii)
any Additional Bankruptcy Distributions in Cash for Holders of
Claims at BlockFi Lending LLC until payment in full of such Allowed
BlockFi Lending LLC General Unsecured Claim; provided that any
Distribution made to Holders of Allowed BlockFi Lending LLC General
Unsecured Claims shall be pari passu with Holders of Claims in
Class 3-a (BlockFi Lending LLC Private Client Account Claims) and
Class 3-b (BlockFi Lending LLC Loan Collateral Claims). Class 4-a
is impaired.
* Class 4‑b BlockFi International Ltd. General Unsecured
Claims total $1.1 million under the plan and $1.2 million under
liquidation. Its projected recovery is 47.7% to 100.0%, compared to
a Liquidation Recovery of 43.4% - 83.3%. Each Holder of an Allowed
BlockFi International Ltd. General Unsecured Claim will receive in
full and final satisfaction of such Allowed BlockFi International
Ltd. General Unsecured Claim, its Pro Rata share of (i) the Cash
Allocation for Holders of Claims at BlockFi International Ltd. and
(ii) any Additional Bankruptcy Distributions in Cash for Holders of
Claims at BlockFi International Ltd. until payment in full of such
Allowed BlockFi International Ltd. General Unsecured Claim. Class
4-b is impaired.
* Class 4‑c BlockFi Inc. General Unsecured Claims total $34.0
million. Its projected recovery is 36.2% to 94.4%, compared to a
Liquidation Recovery of 33.4% - 52.5%. Each Holder of an Allowed
BlockFi Inc. General Unsecured Claim will receive in full and final
satisfaction of such Allowed BlockFi Inc. General Unsecured Claim,
its Pro Rata share of (i) the Cash Allocation for Holders of Claims
at BlockFi Inc. and (ii) any Additional Bankruptcy Distributions in
Cash for Holders of Claims at BlockFi Inc. until payment in full of
such Allowed BlockFi Inc. General Unsecured Claim. Class 4-c is
impaired.
* Class 4‑d BlockFi Services, Inc. General Unsecured Claims
total $0.2 million. Its projected recovery is 1.0%, compared to a
Liquidation Recovery of 1.0%. Each Holder of an Allowed BlockFi
Services, Inc. General Unsecured Claim will receive in full and
final satisfaction of such Allowed BlockFi Services, Inc. General
Unsecured Claim, its Pro Rata share of (i) the Cash Allocation for
Holders of Claims at BlockFi Services, Inc. and (ii) any Additional
Bankruptcy Distributions in Cash for Holders of Claims at BlockFi
Services, Inc. until payment in full of such Allowed BlockFi
Services, Inc. General Unsecured Claim. Class 4-d is impaired.
* Class 4‑e BlockFi Trading LLC General Unsecured Claims. Its
total claim and projected recovery is not applicable. On the
Effective Date, all BlockFi Trading LLC General Unsecured Claims
shall be canceled, released and extinguished, and will be of no
further force or effect, and Holders of BlockFi Trading LLC General
Unsecured Claims will not receive any Distribution on account of
such BlockFi Trading LLC General Unsecured Claims. Class 4-e is
impaired.
* Class 4‑f BlockFi Wallet LLC General Unsecured Claims total
$2.2 million under the plan and $2.1 million under liquidation. Its
projected recovery is 0% and Liquidation Recovery 0%. On the
Effective Date, all BlockFi Wallet LLC General Unsecured Claims
shall be canceled, released and extinguished, and will be of no
further force or effect, and Holders of BlockFi Wallet LLC General
Unsecured Claims will not receive any Distribution on account of
such BlockFi Wallet LLC General Unsecured Claims. Class 4-f is
impaired.
* Class 4‑g BlockFi Ventures LLC GeneralUnsecured Claims. Its
total claim and projected recovery is not applicable. On the
Effective Date, all BlockFi Ventures LLC General Unsecured Claims
shall be canceled, released, and extinguished, and will be of no
further force or effect, and Holders of BlockFi Ventures LLC
General Unsecured Claims will not receive any Distribution on
account of such BlockFi Ventures LLC General Unsecured Claims.
Class 4-g is impaired.
* Class 4‑h BlockFi Investment Products LLC General Unsecured
Claims. Its total claim and projected recovery is not applicable.
On the Effective Date, all BlockFi Investment Products LLC General
Unsecured Claims will be cancelled, released, and extinguished, and
will be of no further force or effect, and Holders of BlockFi
Investment Products LLC General Unsecured Claims will not receive
any Distribution on account of such BlockFi Investment Products LLC
General Unsecured Claims. Class 4-h is impaired.
* Class 4-i BlockFi Lending II LLC General Unsecured Claims. Its
total claim and projected recovery is not applicable. On the
Effective Date, all BlockFi Lending II LLC General Unsecured Claims
will be cancelled, released, and extinguished, and will be of no
further force or effect, and Holders of BlockFi Lending II LLC
General Unsecured Claims will not receive any Distribution on
account of such BlockFi Lending II LLC General Unsecured Claims.
Class 4-i is impaired.
The Voting Deadline is July 28, 2023, at 4:00 p.m. (prevailing
Eastern Time).
Attorneys for the Debtors:
Michael D. Sirota, Esq.
Warren A. Usatine, Esq.
COLE SCHOTZ P.C.
Court Plaza North, 25 Main Street
Hackensack, NJ 07601
Tel: (201) 489-3000
E-mail: msirota@coleschotz.com
wusatine@coleschotz.com
- and -
Joshua A. Sussberg, P.C.
Christine A. Okike, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
E-mail: jsussberg@kirkland.com
christine.okike@kirkland.com
- and -
Richard S. Kanowitz, Esq.
Kenric D. Kattner, Esq.
HAYNES AND BOONE, LLP
30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Tel: (212) 659-7300
E-mail: richard.kanowitz@haynesboone.com
kenric.kattner@haynesboone.com
A copy of the Disclosure Statement dated May 12, 2023, is available
at https://bit.ly/44SR7y5 from PacerMonitor.com.
About BlockFi Inc.
BlockFi is building a bridge between digital assets and traditional
financial and wealth management products to advance the overall
digital asset ecosystem for individual and institutional
investors.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in
its early days had backing from influential Wall Street investors
like Mike Novogratz and, later on, Valar Ventures, a Peter
Thiel-backed venture fund as well as Winklevoss Capital, among
others. BlockFi made waves in 2019 when it began providing
interest-bearing accounts with returns paid in Bitcoin and Ether,
with its program attracting millions of dollars in deposits right
away.
BlockFi grew during the pandemic years and had offices in New York,
New Jersey, Singapore, Poland and Argentina.
BlockFi worked with FTX US after it took an $80 million hit from
the bad debt of crypto hedge fund Three Arrows Capital, which
imploded after the TerraUSD stablecoin wipeout in May 2022.
BlockFi had significant exposure to the companies founded by former
FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a
$400 million credit line from FTX US in an agreement that also gave
FTX the option to acquire BlockFi through a bailout orchestrated by
Bankman-Fried over the summer. BlockFi also had collateralized
loans to Alameda Research, the trading firm co-founded by
Bankman-Fried.
BlockFi is the latest crypto firm to seek bankruptcy amid a
prolonged slump in digital asset prices. Lenders Celsius Network
LLC and Voyager Digital Holdings Inc. also filed for court
protection this year. Kirkland & Ellis is also advising Celsius and
Voyager in their separate Chapter 11 cases.
BlockFi Inc. and eight affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on
Nov. 28, 2022. In the petitions signed by their chief executive
officer, Zachary Prince, the Debtors reported $1 billion to $10
billion in both assets and liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as
general bankruptcy counsels; Walkers (Bermuda) Limited as special
Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley
Research Group, LLC as financial advisor; Moelis & Company as
investment banker; and Street Advisory Group, LLC as strategic and
communications advisor. Kroll Restructuring Administration, LLC is
the notice and claims agent.
BLOCKFI INC: Seeks Approval of Disclosure Statement
---------------------------------------------------
Blockfi Inc., et al. filed a motion for entry of an order approving
the adequacy of the disclosure statement, the solicitation and
notice procedures, (iii) the forms of ballots and notices in
connection therewith, and certain dates with respect thereto.
A hearing on the Motion is scheduled for June 20, 2023, at 11:30 AM
at MBK - Courtroom 8, Trenton.
The Debtors propose to establish these dates and deadlines, subject
to modification as necessary, in connection with the solicitation
of votes on, and confirmation of, the Plan:
* Voting Record Date will be on June 12, 2023.
* Confirmation Objection Deadline will be on July 28, 2023 at
4:00 p.m., prevailing Eastern Time.
* Voting Deadline will be on July 28, 2023 at 4:00 p.m.,
prevailing Eastern Time.
* Confirmation Brief and Plan Objection Reply Deadline will be
on August 13, 2023.
* Deadline to File Voting Report will be on August 13, 2023.
* Confirmation Hearing will be on August 17, 2023, subject to
Court availability.
The Disclosure Statement provides adequate information with respect
to the Plan and ensures that Holders of Claims entitled to vote on
the Plan will receive information of a kind and in sufficient
detail to make an informed judgment regarding acceptance or
rejection of the Plan. The proposed schedule and procedures to
confirm and consummate the Plan will move these Chapter 11 Cases
forward in a timely manner while ensuring due process and providing
for the procedural safeguards mandated under the Bankruptcy Code
and the Bankruptcy Rules.
Attorneys for the Debtors:
Michael D. Sirota, Esq.
Warren A. Usatine, Esq.
COLE SCHOTZ P.C.
Court Plaza North, 25 Main Street
Hackensack, NJ 07601
Tel: (201) 489-3000
E-mail: msirota@coleschotz.com
wusatine@coleschotz.com
- and -
Joshua A. Sussberg, P.C.
Christine A. Okike, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
E-mail: jsussberg@kirkland.com
christine.okike@kirkland.com
- and -
Richard S. Kanowitz, Esq.
Kenric D. Kattner, Esq.
HAYNES AND BOONE, LLP
30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Tel: (212) 659-7300
E-mail: richard.kanowitz@haynesboone.com
kenric.kattner@haynesboone.com
About BlockFi Inc.
BlockFi is building a bridge between digital assets and traditional
financial and wealth management products to advance the overall
digital asset ecosystem for individual and institutional
investors.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in
its early days had backing from influential Wall Street investors
like Mike Novogratz and, later on, Valar Ventures, a Peter
Thiel-backed venture fund as well as Winklevoss Capital, among
others. BlockFi made waves in 2019 when it began providing
interest-bearing accounts with returns paid in Bitcoin and Ether,
with its program attracting millions of dollars in deposits right
away.
BlockFi grew during the pandemic years and had offices in New York,
New Jersey, Singapore, Poland and Argentina.
BlockFi worked with FTX US after it took an $80 million hit from
the bad debt of crypto hedge fund Three Arrows Capital, which
imploded after the TerraUSD stablecoin wipeout in May 2022.
BlockFi had significant exposure to the companies founded by former
FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a
$400 million credit line from FTX US in an agreement that also gave
FTX the option to acquire BlockFi through a bailout orchestrated by
Bankman-Fried over the summer. BlockFi also had collateralized
loans to Alameda Research, the trading firm co-founded by
Bankman-Fried.
BlockFi is the latest crypto firm to seek bankruptcy amid a
prolonged slump in digital asset prices. Lenders Celsius Network
LLC and Voyager Digital Holdings Inc. also filed for court
protection this year. Kirkland & Ellis is also advising Celsius and
Voyager in their separate Chapter 11 cases.
BlockFi Inc. and eight affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on
Nov. 28, 2022. In the petitions signed by their chief executive
officer, Zachary Prince, the Debtors reported $1 billion to $10
billion in both assets and liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors taped Kirkland & Ellis and Haynes and Boone, LLP as
general bankruptcy counsels; Walkers (Bermuda) Limited as special
Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley
Research Group, LLC as financial advisor; Moelis & Company as
investment banker; and Street Advisory Group, LLC as strategic and
communications advisor. Kroll Restructuring Administration, LLC is
the notice and claims agent.
BOLTA US LTD: June 12 Hearing on Debtor/Committee Disclosures
-------------------------------------------------------------
Plan proponents Bolta US Ltd. and the Official Committee of
Unsecured Creditors move the Court for entry of an order approving
disclosure statement, establishing plan solicitation, voting, and
tabulation procedures, scheduling a confirmation hearing and
deadline for filing objections to plan confirmation and granting
related relief.
A hearing on the Motion is scheduled June 12, 2023, at 1:00 PM at
2005 University Blvd., Room 2600, in Tuscaloosa.
A summary of the key dates that will be established by the
Disclosure Statement Order requested as follows:
* The record date will be on June 12, 2023, or such other date
as the Court sets for a hearing on this Motion.
* The solicitation date will Commence will be no later than June
14, 2023.
* The voting deadline will be on July 13, at 4:00 p.m.
(prevailing Central Time).
* The Rule 3018 Motion deadline will be on July 6, 2023, at 4:00
p.m. (prevailing Central Time).
* The deadline for objections to confirmation of the Plan will
be on July 13, 2023.
* The confirmation hearing will be on July 18, 2023, at 10:00
a.m. (prevailing Central Time), or such other date and time as
specified by the Court.
Given the circumstances of the Debtor's chapter 11 case, the
Disclosure Statement contains ample, material information
regarding, among other things: (a) the terms of the Plan; (b)
certain events precipitating the Debtor's chapter 11 case; (c) the
operation of the Debtor's business during the course of the chapter
11 case; (d) the sale of substantially all of the Debtor's assets;
(e) the proposed recovery for Classes of Claims and Interests; (f)
the creation of the Liquidating Trust and the appointment of the
Liquidating Trustee; (g) procedures for distributions under the
Plan; (h) risk factors affecting the Plan; and (i) tax consequences
of the Plan. Accordingly, the Plan Proponents submit that the
Disclosure Statement contains adequate information within the
meaning of section 1125 of the Bankruptcy Code and should be
approved.
Co-Counsel to Debtor:
Kristofor D. Sodergren, Esq.
Jillian L. Guth White, Esq.
ROSEN HARWOOD, P.A.
2200 Jack Warner Parkway, Suite 200
Post Office Box 2727
Tuscaloosa, AL 35403
Telephone: (205) 344-5000
E-mail: ksodergren@rosenharwood.com
jwhite@rosenharwood.com
- and -
Stephen M. Gross, Esq.
MCDONALD HOPKINS LLC
39533 Woodward Ave., Suite 318
Bloomfield Hills, MI 48304
Telephone: (248) 646-2388
E-mail: sgross@mcdonaldhopkins.com
- and -
Michael J. Kaczka, Esq.
Maria G. Carr, Esq.
600 Superior Avenue, E., Suite 2100
Cleveland, OH 44114
Telephone: (216) 348-5400
E-mail: mkaczka@mcdonaldhopkins.com
mcarr@mcdonaldhopkins.com
Counsel to the Official Committee of Unsecured Creditors:
Stuart M. Maples, Esq.
MAPLES LAW FIRM, PC
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
Telephone: (256) 489-9779
E-mail: smaples@mapleslawfirmpc.com
About Bolta US Ltd.
Bolta US Ltd., an auto parts manufacturer in Tuscaloosa, Ala.,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Ala. Case No. 23-70042) on Jan. 13, 2023. In the
petition signed by its chief restructuring officer, Jeffrey Truitt,
the Debtor disclosed up to $50 million in assets and up to $100
million in liabilities.
Judge Jennifer H. Henderson oversees the case.
The Debtor tapped Stephen Gross, Esq., at McDonald Hopkins, LLC as
bankruptcy counsel; Rosen Harwood, P.C. as local bankruptcy
counsel; Winter McFarland, LLC as special counsel; and Donnelly
Penman & Partners as investment banker.
The U.S. Bankruptcy Administrator for the Northern District of
Alabama appointed an official committee to represent unsecured
creditors in the Debtor's case. The committee is represented by
Maples Law Firm, PC.
BROWNIE'S MARINE: Incurs $328K Net Loss in First Quarter
--------------------------------------------------------
Brownie's Marine Group, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $327,922 on $1.64 million of revenues for the three
months ended March 31, 2023, compared to a net loss of $444,092 on
$1.97 million of revenues for the three months ended March 31,
2022.
Chris Constable, CEO of Brownie's Marine Group, Inc. stated, "As
expected the first quarter 2023 was challenging from a revenue
standpoint. The BLU3 team made great progress on recall repairs,
and began shipping new Nomads during the quarter, but their results
were impacted. Additionally, when looking at Q1-2023 vs Q1-2022,
economic uncertainty clearly had an impact on the Brownie's Third
Lung results. Submersible Systems had an improved Q1-2023 as
compared to Q1-2022, as they continue to see momentum in their
newest HEED3 model to hit the market. As we move into Q2-2023 and
head into our traditional busy season, for the first time in 2
years, we have full-line of products available, and have added the
Nomad Mini to the product portfolio. Based on early indicators, we
are looking forward to an exciting summer season." Mr. Constable
continued, "given the lower level of revenues, the company was able
to reduce overall operating expenses by 34.3% for Q1-2013 as
compared to Q1-2022. We will continue to monitor the changes to
revenue and make adjustments as necessary."
As of March 31, 2023, the Company had $5.32 million in total
assets, $2.90 million in total liabilities, and $2.41 million in
total stockholders' equity.
At March 31, 2023, the Company had an accumulated deficit of
$16,765,417.
Brownie's Marine said, "Despite a working capital surplus of
approximately $1,320,817 at March 31, 2023, the continued losses
and cash used in operations raise substantial doubt as to the
Company's ability to continue as a going concern. The Company's
ability to continue as a going concern is dependent upon the
Company's ability to increase revenues, control expenses, raise
capital, and to continue to sustain adequate working capital to
finance its operations. The failure to achieve the necessary
levels of profitability and cash flows would be detrimental to the
Company. The consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable 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/1166708/000149315223017345/form10-q.htm
About Brownie's Marine
Headquartered in Pompano Beach, Florida, Brownie's Marine Group,
Inc., owns and operates a portfolio of companies with a
concentration in the industrial, and recreational diving industry.
The Company, through its subsidiaries, designs, tests,
manufactures, and distributes recreational hookah diving,
yacht-based scuba air compressors and nitrox generation systems,
and scuba and water safety products in the United States and
internationally.
Brownie's Marine reported a net loss of $1.89 million for the year
ended Dec. 31, 2022, compared to a net loss of $1.59 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$5.66 million in total assets, $3.14 million in total liabilities,
and $2.52 million in total stockholders' equity.
Margate, Florida-based Assurance Dimensions, the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company had a net loss of
approximately $1,893,000 and cash used in operating activities of
approximately $678,000 for the year ended Dec. 31, 2022 as well as
an accumulated deficit of approximately $16,437,000 as of Dec. 31,
2022. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
CAPSTACK FINANCIAL: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: CapStack Financial, LP
3857 Birch Street 148
Newport Beach, CA 92660
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11063
Judge: Hon. Scott C. Clarkson
Debtor's Counsel: Anerio Ventura Altman, Esq.
LAKE FOREST BANKRUPTCY
PO Box 515381
Los Angeles, CA 90051-6681
Tel: (949) 218-2002
Email: avaesq@lakeforestbkoffice.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joshua Pukini, General Partner as
Trustee of the Pukini Trust.
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/3BAZCNI/CapStack_Financial_LP__cacbke-23-11063__0001.0.pdf?mcid=tGE4TAMA
CHESTNUT RIDGE: To Seek Plan Confirmation on Aug. 1
---------------------------------------------------
Chestnut Ridge Associates LLC sought and obtained an order
conditionally approving the Disclosure Statement filed by the
Debtor on May 8, 2023.
A hearing to consider final approval of the Disclosure Statement
and confirmation of the Plan is scheduled for Aug. 1, 2023 at 10:00
AM by telephone and video conference.
The Debtor submits that the Disclosure Statement includes
sufficient information needed by creditors to make a fully informed
decision in voting on the Plan. Among other things, the Disclosure
Statement contains detailed information regarding the following
topics: (a) the Debtor's business; (b) the factors and events
leading to the filing of this case; (c) the professionals employed
by the estates; (d) the terms of the Plan and the treatment of
holders of claims and equity interests under the Plan; (e) risk
factors associated with confirmation of the Plan; and (f)
alternatives to confirmation of the Plan.
Attorneys for the Debtor:
Jeff P. Prostok, Esq.
Emily S. Chou, Esq.
Dylan T.F. Ross, Esq.
FORSHEY & PROSTOK LLP
777 Main Street, Suite 1550
Fort Worth, TX 76102
Telephone: (817) 877-8855
Facsimile: (817) 877-4151
E-mail: jprostok@fosheyprostok.com
echou@forsheyprostok.com
dross@forsheyprostok.com
About Chestnut Ridge Associates
Chestnut Ridge Associates LLC's principal asset is a shopping
center known as The Shoppes at Kingsgate, located at 1113-1387
Kingwood Drive, Humble, Texas (the "Property"). The Debtor
believes the Property's current value is no less than $26 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90069) on Feb. 5,
2023. In the petition signed by Andrew Schreer, managing member,
the Debtor disclosed up to $50 million in both assets and
liabilities.
Judge David R. Jones oversees the case.
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represents the
Debtor as legal counsel.
CHRISHULSERSELLSHOMES INC: Taps Maples Law Firm as Counsel
----------------------------------------------------------
ChrisHulserSellsHomes, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Alabama to employ Maples Law
Firm, P.C. as its bankruptcy counsel.
The firm's services include:
a. preparing pleadings and applications and conducting
examinations incidental to any related proceedings or to the
administration of the Debtor's Chapter 11 case;
b. developing the relationship of the status of the Debtor to
the claims of creditors;
c. advising the Debtor of its rights, duties and obligations
under Chapter 11 of the Bankruptcy Code;
d. assisting the Debtor in the preparation of a Chapter 11 plan;
and
e. taking any and all other necessary actions incident to the
proper preservation and administration of the case.
The firm will be paid at these rates:
Attorneys $395 per hour
Associates $250 per hour
Paralegals $100 to $145 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Stuart Maples, Esq., a partner at Maples Law Firm, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Stuart M. Maples, Esq.
Maples Law Firm, P.C.
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
Tel: (256) 489-9779
Fax: (256) 489-9720
Email: smaples@mapleslawfirmpc.com
About ChrisHulserSellsHomes Inc.
ChrisHulserSellsHomes, Inc. is an Alabama corporation with its
principal place of business at 1896 Slaughter Road, Suite F,
Madison, Ala. It provides real estate brokerage services in the
North Alabama area.
ChrisHulserSellsHomes sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-80858) on May
10, 2023, with up to $50,000 in assets and up to $1 million in
liabilities. Christopher W. Hulser, president and owner, signed
the
petition.
Judge Clifton R. Jessup, Jr. oversees the case.
Stuart M. Maples, Esq., at Maples Law Firm, P.C. is the Debtor's
bankruptcy counsel.
CLEARY PACKAGING: Plan to Face Objections from Cantwell-Cleary
--------------------------------------------------------------
Approval to CLEARY PACKAGING, LLC's Plan could face objections from
Cantwell-Cleary Co., Inc., at the June 5 to 6 confirmation
hearings.
On May 11, 2023, the Debtor withdrew its election to proceed under
Subchapter V, electing to proceed under traditional Chapter 11.
At approximately 9:00 p.m. on May 11, 2023, the Debtor filed its
Third Amended Plan of Reorganization under Chapter 11 of the
Bankruptcy Code; Emergency Motion for Conditional Approval of
Disclosure and for Consolidation of the Final Hearing on Disclosure
Statement with the Hearing on Confirmation of the Plan; and a
Motion to Shorten Time to Respond to the Conditional Approval
Motion.
On May 12, 2023, the Court entered an Order Granting Debtor's
Motion to Shorten Time and Order Granting Debtor's Emergency Motion
for Conditional Approval of Disclosure Statement and for
Consolidation of the Final Hearing on Disclosure Statement with the
Final Hearing on Confirmation of the Plan of Reorganization and to
Amend Scheduling Order. The Orders provide, among other things,
that the Disclosure Statement is conditionally approved, and
consolidated with the hearing on confirmation of the Plan,
scheduled for confirmation on June 5, 2023 and June 6, 2023.
On May 14, 2023, Cantwell-Cleary filed an Amended Expedited Motion
to
Expedited Motion to Shorten Time for Debtor and George S. Magas,
CPA, P.C. to Respond to Discovery Requests in Connection with Third
Amended Plan of Reorganization under Chapter 11 of the Bankruptcy
Code (the "Discovery Motion"). The shortened time period set forth
in the Discovery Motion is necessary for Cantwell-Cleary to
identify any other persons it may need to depose, and to comply
with the Court's Order setting a deadline to object to the Plan by
May 30, 2023.
According to Cantwell-Cleary, though the Plan gerrymanders
unsecured claims and is unconfirmable as a matter of law, the
Debtor's May 11, 2023 withdrawal of its election to proceed under
SubChapter V, alters the confirmation standards, among other
things, requiring Cantwell-Cleary to conduct discovery on the
Plan.
Subject to the discovery of new information or further changes to
the Plan, and without waiver of any of its claims and defenses,
Cantwell-Cleary is amenable to conducting discovery on an expedited
basis. However, the Debtor has refused to commit to provide
discovery,
seemingly arguing that Cantwell-Cleary waived its discovery rights,
which, is entirely unmeritorious.
About Cleary Packaging
Cleary Packaging, LLC is a wholesale distributor of packaging and
janitorial supplies. The company sought protection under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
21-10765) on Feb. 7, 2021.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range. The
Debtor tapped Yumkas, Vidmar, Sweeney & Mulrenin as its legal
counsel and George S. Magas CPA, PC as its accountant.
Scott W. Miller has been appointed as Subchapter V Trustee for the
Debtor.
CONTOUR OPCO: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Contour Opco 1735 S Mission LLC
101 Convention Center Drive
Suite 810
Las Vegas, NV 89109
Chapter 11 Petition Date: May 23, 20230
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-12082
Judge: Hon. Mike K. Nakagawa
Debtor's Counsel: Samuel A. Schwartz, Esq.
SCHWARTZ LAW, PLLC
601 East Bridger Avenue
Las Vegas, NV 89101
Tel: 702-385-5544
Fax: 702-201-1330
Email: saschwartz@nvfirm.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by David Daneshforooz as chief executive
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FQVOETA/CONTOUR_OPCO_1735_S_MISSION_LLC__nvbke-23-12082__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. CarePatrol $6,560
Franchise Systems, LLC
900 Wilshire Dr Ste 102
Troy, MI 48084
2. CarePatrol of $6,560
Temecula Valley
30724 Benton Rd
STE C-302 #517
Winchester, CA 92596
3. Careworx $10,448
1002 Beaverbrook Rd
Kanata, ON K2K 1L1
4. Circa $7,400
1000 N Water St, Ste 1200
Milwaukee, WI 53202
5. Duthie Power Services $4,972
2335 E Cherry
Industrial Cir
Long Beach, CA 90805
6. Fallbrook Public $5,561
Utility District
990 E Mission Rd
Fallbrook, CA 92028
7. G5 Search $19,273
Marketing, Inc
PO Box 843274
Dallas, TX 75284
8. Hanson Bridgett $960
425 Market St
San Francisco, CA 94105
9. Healthcare Research LLC $14,400
200 Central Ave, 4th Floor
St Petersburg, FL 33701
10. Ingardia Bros Produce $3,250
700 S Hathaway St
Santa Ana, CA 92705
11. LifeLoop, LLC $1,861
11421 Davenport St
Omaha, NE 68154
12. Mayan Cleaning Services Inc. $900
6643 Tiffin Ave
San Diego, CA 92114
13. Medline Healthcare $2,056
3 Lakes Drive
Winnetka, IL 60093
14. Network Services Company $1,784
29060 Network Place
Chicago, IL 60673
15. PointClickCare $14,258
Technologies Inc
PO Box 674802
Detroit, MI 48267
16. Preston Tyman $3,261
17. The Image Group $4,260
1255 Corporate Dr
Holland, OH 43528
18. Village News Inc $8,960
111 W Alvarado
Fallbrook, CA 92028
19. Web Scribble Solutions Inc $3,500
216 River St
Troy, NY 12180
20. Windstream Enterprise $9,322
PO Box 3177
Cedar Rapids, IA 52406
CONTOUR PROPCO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Countour Propco 1735 S Mission LLC
101 Convention Center Drive
Suite 810
Las Vegas, NV 89109
Case No.: 23-12081
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
District of Nevada
Judge: Hon. August B. Landis
Debtor's Counsel: Samuel A. Schwartz, Esq.
SCHWARTZ LAW, PLLC
601 East Bridger Avenue
Las Vegas, NV 89101
Tel: 702-385-5544
Fax: 702-201-1330
Email: saschwartz@nvfirm.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by David Daneshforooz as chief executive
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FCCHKZY/CONTOUR_PROPCO_1735_S_MISSION__nvbke-23-12081__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. CarePatrol Franchise Systems, LLC $6,560
900 Wilshire Dr Ste 102
Troy, MI 48084
2. CarePatrol of $6,560
Temecula Valley
30724 Benton Rd
STE C-302 #517
Winchester, CA 92596
3. Careworx $10,448
1002 Beaverbrook Rd
Kanata, ON K2K 1L1
4. Circa $7,400
1000 N Water St, Ste 1200
Milwaukee, WI 53202
5. Duthie Power Services $4,972
2335 E Cherry
Industrial Cir
Long Beach, CA 90805
6. Fallbrook Public $5,561
Utility District
990 E Mission Rd
Fallbrook, CA 92028
7. G5 Search $19,273
Marketing, Inc
PO Box 843274
Dallas, TX 75284
8. Hanson Bridgett $960
425 Market St
San Francisco, CA 94105
9. Healthcare Research LLC $14,400
200 Central Ave, 4th Floor
St Petersburg, FL 33701
10. Ingardia Bros Produce $3,250
700 S Hathaway St
Santa Ana, CA 92705
11. LifeLoop, LLC $1,861
11421 Davenport St
Omaha, NE 68154
12. Mayan Cleaning $900
Services Inc
6643 Tiffin Ave
San Diego, CA 92114
13. Medline Healthcare $2,056
3 Lakes Drive
Winnetka, IL 60093
14. Network Services Company $1,784
29060 Network Place
Chicago, IL 60673
15. PointClickCare $14,258
Technologies Inc
PO Box 674802
Detroit, MI 48267
16. Preston Tyman $3,261
17. The Image Group $4,260
1255 Corporate Dr
Holland, OH 43528
18. Village News Inc $8,960
111 W Alvarado
Fallbrook, CA 92028
19. Web Scribble Solutions Inc. $3,500
216 River St
Troy, NY 12180
20. Windstream Enterprise $9,322
PO Box 3177
Cedar Rapids, IA 52406
COX INDUSTRIAL: Gets OK to Hire Allen, Jones & Giles as Counsel
---------------------------------------------------------------
Cox Industrial Services, LLC received approval from the U.S.
Bankruptcy Court for the District of Arizona to hire Allen, Jones &
Giles, PLC as its bankruptcy counsel.
The firm's services include:
a. providing the Debtor with legal advice with respect to its
Chapter 11 bankruptcy proceeding;
b. representing the Debtor in negotiations involving secured
and unsecured creditors;
c. representing the Debtor at hearings set by the court in the
Debtor's Chapter 11 case; and
d. preparing legal papers necessary to assist in the Debtor's
reorganization.
The firm will be paid at these rates:
Thomas H. Allen, Member $485 per hour
Philip J. Giles, Member $400 per hour
David B. Nelson, Associate $325 per hour
Legal Assistants and Law Clerks $185 - $215 per hour
As disclosed in court filings, Allen, Jones & Giles does not
represent interests adverse to the Debtor or the estate in the
matters upon which it is to be engaged.
The firm can be reached through:
Thomas H. Allen, Esq.
Allen, Jones & Giles, PLC
1850 N. Central Ave., Suite 1150
Phoenix, AZ 85004
Phone: 602-256-6000
Fax: 602-252-4712
Email: tallen@bkfirmaz.com
About Cox Industrial Services
Cox Industrial Services, LLC operates an agricultural engineering
and fabrication business focusing on industrial refrigeration. It
is based in Yuma, Ariz.
Cox Industrial Services sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02866) on May 2,
2023, with $5,793,413 in assets and $4,238,957 in liabilities.
Randy Cox, owner, signed the petition.
Judge Scott H. Gan oversees the case.
Thomas H. Allen, Esq., at Allen, Jones & Giles, PLC, represents the
Debtor as legal counsel.
DFREH 1436 W: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: DFREH 1436 W Nedro Avenue LLC
c/o American Regional Capital
295 Madison Avenue
New York, NY 10017-6434
Business Description: The Debtor was first organized in 2020 to
acquire particular residential property in
Philadelphia and has since expanded the
scope of its business operations to become
a holding company of fractionalized real
interests (ranging from 5% to 100%) in a
group of properties many of which are in
Brooklyn, NY.
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-41819
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Kevin J. Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave Fl 12
New York, NY 10017-5690
Tel: (212) 221-5700
Email: knash@gwfglaw.com
Total Assets: $2,692,750
Total Liabilities: $11,064,027
The petition was signed by Earl R. Davis as chief restructuring
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XFGF4NQ/DFREH_1436_W_Nedro_Avenue_LLC__nyebke-23-41819__0001.0.pdf?mcid=tGE4TAMA
DIAMONDHEAD CASINO: Incurs $498K Net Loss in First Quarter
----------------------------------------------------------
Diamondhead Casino Corporation has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
a net loss of $497,957 for the three months ended March 31, 2023,
compared to a net loss of $471,522 for the three months ended March
31, 2022.
As of March 31, 2023, the Company had $5.49 million in total
assets, $17.99 million in total liabilities, and a total
stockholders' deficit of $12.50 million.
Diamondhead said, "In the past, in order to raise capital to
continue to pay on-going costs and expenses, the Company has
borrowed funds, through Private Placements of convertible
instruments as well as through other secured notes...The Company is
in default with respect to payment of both principal and interest
under the terms of most of these instruments. In addition, at
March 31, 2023, the Company had $12,816,246 of accounts payable and
accrued expenses and $15,089 in cash on hand.
"The above conditions raise substantial doubt as to the Company's
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/844887/000149315223017101/form10-q.htm
About DiamondHead
Headquartered in Alexandria, Virginia, DiamondHead Casino
Corporation owns a total of approximately 400 acres of unimproved
land in Diamondhead, Mississippi. Active subsidiaries of the
Company include Mississippi Gaming Corporation, which owns the
approximate 400-acre site and Casino World, Inc.
Diamondhead reported a net loss of $1.86 million in 2022, a net
loss of $1.52 million in 2021, and a net loss of $2.22 million in
2020. As of Dec. 31, 2022, the Company had $5.53 million in total
assets, $17.53 million in total liabilities, and a total
stockholders' deficit of $11.99 million.
Marlton, New Jersey-based Marcum LLP, the Company's auditor since
2004 (such date takes into account the acquisition of Friedman LLP
by Marcum LLP effective Sept. 1, 2022), issued a "going concern"
qualification in its report dated March 30, 2023, citing that the
Company has a significant working capital deficiency, 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.
DIFFUSION PHARMACEUTICALS: Incurs $4.1M Net Loss in First Quarter
-----------------------------------------------------------------
Diffusion Pharmaceuticals Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $4.09 million for the three months ended March 31,
2023, compared to a net loss of $4.53 million for the three months
ended March 31, 2022.
As of March 31, 2023, the Company had $18.40 million in total
current assets, $2.12 million in total liabilities, and $16.28
million in total stockholders' equity.
As of March 31, 2023, the Company had $14.6 million in cash and
cash equivalents, $3.0 million in marketable securities, working
capital of $16.4 million and an accumulated deficit of $149.6
million. The Company expects to continue to incur net losses for
the foreseeable future. The Company intends to use its existing
cash, cash equivalents, and marketable securities to fund its
working capital and, subject to the completion and outcome of its
strategic review process, research and development of its product
candidates.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1053691/000143774923014359/dffn20230331_10q.htm
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is a biopharmaceutical company
developing novel therapies that enhance the body's ability to
deliver oxygen to the areas where it is needed most. The Company's
lead product candidate, TSC, is being developed to enhance
thediffusion of oxygen to tissues with low oxygen levels, also
known as hypoxia, a serious complication of many of medicine's most
intractable and difficult-to-treat conditions.
Diffusion reported a net loss of $15.59 million in 2022, a net loss
of $24.10 million in 2021, a net loss of $14.18 million in 2020,
and a net loss of $11.80 million in 2019.
DIFFUSION PHARMACEUTICALS: William Hornung Quits as CFO
-------------------------------------------------------
Effective as of the close of business on May 15, 2023, Mr. William
K. Hornung departed Diffusion Pharmaceuticals Inc. Mr. Hornung had
served as Diffusion's chief financial officer since September
2018.
In connection with Mr. Hornung's departure, the Company entered
into a separation letter agreement and release with Mr. Hornung,
dated as of May 15, 2023. Pursuant to the terms of the Separation
Agreement, Mr. Hornung is entitled to separation benefits in
accordance with the terms of his employment agreement, including a
lump-sum payment of nine months current annual base salary and a
pro-rated annual cash bonus for the current calendar year based on
the number of days served as Chief Financial Officer during 2023.
All options to purchase the Company's common stock held by Mr.
Hornung that were outstanding and vested as of his last day of
employment remain exercisable for a period of three months from the
date of separation, in accordance with their respective terms. In
addition, Diffusion will also provide a lump-sum payment in respect
of continuation health insurance coverage premiums for Mr. Hornung
and his eligible dependents for a period of twelve months after the
separation date.
As consideration for the separation benefits, pursuant to the
Separation Agreement, Mr. Hornung has released the Company and
certain related parties, including the Company's stockholders,
directors, officers, and employees, from all claims and liabilities
arising prior to the date of the Separation Agreement under federal
and state laws and has reaffirmed the confidentiality,
non-competition, non-solicitation, non-disparagement and certain
other customary provisions in his employment agreement, which,
except as described above and otherwise set forth in the Separation
Agreement, terminated effective as of his separation date.
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is a biopharmaceutical company
developing novel therapies that enhance the body's ability to
deliver oxygen to the areas where it is needed most. The Company's
lead product candidate, TSC, is being developed to enhance the
diffusion of oxygen to tissues with low oxygen levels, also known
as hypoxia, a serious complication of many of medicine's most
intractable and difficult-to-treat conditions.
Diffusion reported a net loss of $15.59 million in 2022, a net loss
of $24.10 million in 2021, a net loss of $14.18 million in 2020,
and a net loss of $11.80 million in 2019.
DMCC 7347 RIDGE: Case Summary & Two Unsecured Creditors
-------------------------------------------------------
Debtor: DMCC 7347 Ridge Road, LLC
234 N. Westmonte Drive, Suite 3000
Altamonte Springs, FL 32714
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-01979
Debtor's Counsel: Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathamluna.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pradeep Matharoo as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/QTOBDDY/DMCC_7347_Ridge_Road_LLC__flmbke-23-01979__0001.0.pdf?mcid=tGE4TAMA
DMCC AMERICAS: Case Summary & Eight Unsecured Creditors
-------------------------------------------------------
Debtor: DMCC Americas, Inc.
234 N. Westmonte Drive, Suite 1040
Altamonte Springs, FL 32714
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-01978
Debtor's Counsel: Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathamluna.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pradeep Matharoo as president.
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/QL3OCNY/DMCC_Americas_Inc__flmbke-23-01978__0001.0.pdf?mcid=tGE4TAMA
DMCC MANAGEMENT: Case Summary & Four Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: DMCC Management 1, LLC
234 N. Westmonte Drive, Suite 1040
Altamonte Springs, FL 32714
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-01980
Debtor's Counsel: Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathluna.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pradeep Matharoo as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/Q3KYFLQ/DMCC_Management_1_LLC__flmbke-23-01980__0001.0.pdf?mcid=tGE4TAMA
DOLPHIN ENTERTAINMENT: Posts $2.97-Mil. Net Loss in First Quarter
-----------------------------------------------------------------
Dolphin Entertainment, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $2.97 million on $9.89 million of revenues for the
three months ended March 31, 2023, compared to a net loss of $1.72
million on $9.18 million of revenues for the three months ended
March 31, 2022.
As of March 31, 2023, the Company had $73.99 million in total
assets, $42.26 million in total liabilities, and $31.72 million in
total stockholders' equity.
Cash used in operating activities was $1.4 million for three months
ended March 31, 2023, a change of $2.2 million from cash provided
by operating activities of $0.8 million for three months ended
March 31, 2022. The decrease in cash flows from operations was
primarily as a result a $1.4 million net change in working capital
and $1.1 million of increased net loss for the period, offset by
$0.3 million non-cash items such as depreciation and amortization,
bad debt expense, share-based compensation, impairment of
capitalized production costs and other non-cash losses.
There were no cash flows used in investing activities for the three
months ended March 31, 2023. Net cash flows used in investing
activities for the three months ended March 31, 2022 were $1.2
million, and consisted primarily of issuances of notes receivable.
Cash flows provided by financing activities for the three months
ended March 31, 2023 were $3.2 million.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001282224/000107997323000727/dlpn_10q.htm
About Dolphin Entertainment
Headquartered in Coral Gables, Florida, Dolphin Entertainment, Inc.
-- http://www.dolphinentertainment.com-- is an independent
entertainment marketing and premium content development company.
Through its subsidiaries, 42West LLC, The Door Marketing Group LLC
and Shore Fire Media, Ltd, the Company provides expert strategic
marketing and publicity services to many of the top brands, both
individual and corporate, in the entertainment, hospitality and
music industries.
Dolphin Entertainment reported a net loss of $4.78 million in 2022,
a net loss of $6.46 million in 2021, a net loss of $1.94 million in
2020, and net loss of $2.33 million in 2019. As of Dec. 31, 2022,
the Company had $75.37 million in total assets, $41.28 million in
total liabilities, and $34.09 million in total stockholders'
equity.
ESJ TOWERS: Maria Sandra Roldos Out as Committee Member
-------------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that
María Sandra Roldos has been removed from the official committee
of unsecured creditors in the Chapter 11 case of ESJ Towers, Inc.
The remaining members of the committee are:
1. Homeowners Association of ESJ Towers
Chana Cohen, President, Board of Directors
P.O. Box 79878
Carolina, PR 00984
Tel: (787) 529-5539
Email: rentwithchana@yahoo.com
External Counsel: Monique Díaz Mayoral
Tel: (754) 755-5508
Email: m@diazmayorallaw.com
2. Frank Luccarelli
Deeded Timeshare Owner and Vacation Club Member
32 Lynncliff Road
Hampton Bays, NY 11946
Cell: (631) 745-1622
Tel: (631) 728-6735
Email: islandcl@yahoo.com
3. Steven Vega, Vacation Club Member
140 Donizetti Pl #13G
Bronx, NY 10475
Tel: (212) 942-8645
Email: steven_vega@live.com
4. Florence Paley-Cohen,1 Deeded Timeshare Owner
580 Cobblestone Lane
Buffalo Grove, IL 60089
Tel: (847) 894-8934
Email: Steven.cohen@aol.com
About ESJ Towers
ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury
apartments and condo units at ESJ Towers have direct access to Isla
Verde Beach, widely considered one of the best in Puerto Rico.
ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as
50 million in both assets and liabilities. ESJ President Keith St.
Clair signed the petition.
Judge Enrique S. Lamoutte Inclan oversees the case.
The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill,
PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at
RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as
special counsels; Dage Consulting CPAS, PSC as financial advisor;
CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and
De Angel & Compania, PA, LLC as auditor.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC
and Dage Consulting CPAS, PSC serve as the committee's legal
counsel and financial advisor, respectively.
EVOKE PHARMA: Posts $2.2 Million Net Loss in First Quarter
----------------------------------------------------------
Evoke Pharma, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.24 million on $810,408 of net product sales for the three
months ended March 31, 2023, compared to a net loss of $2.17
million on $418,380 of net product sales for the three months ended
March 31, 2022.
As of March 31, 2023, the Company had $10.04 million in total
assets, $7.91 million in total liabilities, and $2.13 million in
total stockholders' equity.
Evoke Pharma stated, "The Company has incurred recurring losses and
negative cash flows from operations since inception and expects to
continue to incur net losses for the foreseeable future until such
time, if ever, that it can generate significant revenues from the
sale of Gimoti. As of March 31, 2023, the Company had
approximately $8.2 million in cash and cash equivalents. The
Company anticipates that it will continue to incur losses from
operations due to commercialization activities, including
manufacturing Gimoti, conducting the post-marketing commitment
single-dose pharmacokinetics ("PK") clinical trial of Gimoti to
characterize dose proportionality of a lower dose strength of
Gimoti, and for other general and administrative costs to support
the Company's operations. As a result, the Company believes that
there is substantial doubt about its ability to continue as a going
concern for one year after the date these financial statements are
issued. The financial statements do not include any adjustments
that may result from the outcome of this uncertainty.
"The Company's net losses may fluctuate significantly from quarter
to quarter and year to year. The Company anticipates that it will
be required to raise additional funds through debt, equity or other
forms of financing, such as potential collaboration arrangements,
to fund future operations and 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/1403708/000095017023022182/evok-20230331.htm
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke Pharma, Inc. --
http://www.evokepharma.com-- is a specialty pharmaceutical company
focused primarily on the development of drugs to treat GI disorders
and diseases. The Company is developing Gimoti, a nasal spray
formulation of metoclopramide, for the relief of symptoms
associated with acute and recurrent diabetic gastroparesis in adult
women.
Evoke Pharma reported a net loss of $8.22 million for the year
ended Dec. 31, 2022, compared to a net loss of $8.54 million for
the year ended Dec. 31, 2021.
San Diego, California-based BDO USA, LLP, the Company's auditor
since 2014, issued a "going concern" qualification in its report
dated March 21, 2023, citing that the Company has suffered
recurring losses and negative cash flows from operations since
inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
FARMHOUSE CREATIVE: Reaches Agreement with Lender; Files Final Plan
-------------------------------------------------------------------
Farmhouse Creative, LLC, submitted a Final Subchapter V Plan of
Reorganization dated May 18, 2023.
Following submission of the original Plan, the Farmhouse and
Florida Business Development Corporation ("Lender") reached an
agreement on certain plan modifications, the full extent of which
are incorporated into this Final Plan.
Class 1 consists of the Allowed Secured Claim of Florida Business
Development Corporation ("FBC"). FBC's Class 1 Claim is secured by
a lien on substantially all of the Personal Property of Farmhouse
Creative, LLC (the "Farmhouse Collateral"). FBC shall retain its
lien on the Farmhouse Collateral, and shall receive payment of its
Allowed Class 1 Claim, minus any payments received after the
Petition Date (if any), in equal monthly payments commencing on
June 1, 2023 based upon the amortization schedule outlined herein
with a maturity date occurring on the last day of the 60th month
following the Effective Date (the "Maturity Date").
On the Effective Date, FBC will receive a cash flow note from the
Reorganized Debtor (the "Cash Flow Note"). The Cash Flow Note will
entitle FBC to receive payments (the "Cash Flow Payments") over a
period of 5 years equal to 50% of the surplus of the Reorganized
Debtor's actual cash balance above the ending cash balance
reflected on the Financial Projections. The maximum Distribution
under the Cash Flow Note shall be equal to the total amount of the
unpaid portion of the Class 1 Claim, with the Class 1 Claimholder
not receiving any amount greater than its Allowed Class 1 Claim.
On or before the Effective Date of the Plan, Jason & Dawn Farmer
will deposit $6,700.00 (the "Quarterly Payment Fund") into the
trust account of Latham Luna Eden & Beaudine, LLP (the "Trust
Account"), which amount represents each of the quarterly plan
payments for Year 1 of the Plan. To the extent the Reorganized
Debtor requires any portion of the Quarterly Payment Fund in Year 1
of the Plan to fund payments to the Class 1 Claimholder, the
required portion of the Quarterly Payment Fund shall be paid to FBC
from the Trust Account, and the Reorganized Debtor or Mr. and Mrs.
Farmer will replenish the Quarterly Payment Fund by the 30th day of
the first month of Year 2 of the Plan. To the extent the
Reorganized Debtor does not draw from the Quarterly Payment Fund in
Year 1, the $6,700.00 fund proceeds will be returned to the
Reorganized Debtor or Mr. and Mrs. Farmer as the case may be.
Like in the prior iteration of the Plan, Holders of Class 2 General
Unsecured Claims shall receive monthly pro rata distributions of
$390.24 over a term of 5 years from the Effective Date after
Administrative Claims, Priority Claims are satisfied in full.
The Plan contemplates the Debtor will continue to manage and
operate its business sin the ordinary course, but with restructured
debt obligations and reduced operating expenses. It is anticipated
that the revenue from ordinary course business and collection of
outstanding accounts receivable will be sufficient to make the Plan
Payments and satisfy all Allowed Claims in full.
A full-text copy of the Final Subchapter V Plan dated May 18, 2023
is available at https://urlcurt.com/u?l=iV9Tuj from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Daniel A. Velasquez, Esq.
Latham Luna Eden &Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: dvelasquez@lathamluna.com
About Farmhouse Creative
Farmhouse Creative, LLC is a closely held Florida limited liability
company formed in 2019 for the purpose of acquiring and operating
the KidzArt Orlando franchise. KidzArt Orlando offers a unique art
enrichment program where children can learn to draw, learn about
art, and enhance their creativity.
Farmhouse Creative sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00178) on Jan. 18,
2023. In the petition signed by its managing member, Dawn Farmer,
the Debtor disclosed up to $500,000 in both assets and
liabilities.
Judge Tiffany P. Geyer oversees the case.
Daniel A. Velasquez, Esq., at Latham Luna Eden and Beaudine LLP, is
the Debtor's legal counsel.
FREE FLOW: Incurs $19K Net Loss in First Quarter
------------------------------------------------
Free Flow Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $19,429 on $956 of sales for the three months ended March 31,
2023, compared to a net loss of $2.60 million on $60,731 of sales
for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $715,087 in total assets,
$1.73 million in total liabilities, $330,000 in series B redeemable
preferred stock, $470,935 in Series C redeemable preferred stock,
and a total stockholders' deficit of $1.81 million.
Free Flow said, "The Company's present revenues are marginally
sufficient to meet operating expenses. The financial statement of
the Company has been prepared assuming that the Company will
continue as a going concern, which contemplates, among other
things, the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has
incurred cumulative net losses of $1,814,285 since its inception
thus requires greater sales for its contemplated operational and
marketing activities to take place. Upon completion of the
transaction of sale of assets that are under contract, these
carried forward losses of $1,814,285 will be reduced by
approximately $1,100,000 (as a result of capital gain) and would
thus reduce the cumulative losses to approximately $700,000. The
Company's ability to increase additional sales in the future is
unknown. The obtainment of additional sales, 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.
The ability to successfully resolve these factors raise substantial
doubt about the Company's 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/1543652/000109690623001136/fflo-20230331.htm
About Free Flow
Free Flow, Inc. was incorporated on Oct. 28, 2011 under the laws of
State of Delaware to enter the green energy industry. The Company
began with the idea of developing swimming pool solar pump system
to create a blend of green energy harvesting while maintaining the
present system. Having received firm inquiries from overseas
farmers, Free Flow began with focus on the sale of solar panels to
the agriculture sector, providing alternate means of electricity to
operate pumps for water wells in India and Pakistan.
Free Flow reported a net loss of $2.76 million for the year ended
Dec. 31, 2022, compared to net income of $543,898 for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $732,327
in total assets, $1.73 million in total liabilities, $330,000 in
series B redeemable preferred stock, $470,935 in series C
redeemable preferred stock, and a total stockholders' deficit of
$1.79 million.
GAUCHO GROUP: Incurs $2.7 Million Net Loss in First Quarter
-----------------------------------------------------------
Gaucho Group Holdings, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $2.69 million on $447,767 of sales for the three months
ended March 31, 2023, compared to a net loss of $2.27 million on
$425,597 of sales for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $21.01 million in total
assets, $8.60 million in total liabilities, and $12.40 million in
total stockholders' equity.
Gaucho Group said, "The Company's operating needs include the
planned costs to operate its business, including amounts required
to fund working capital and capital expenditures. Based upon
projected revenues and expenses, the Company believes that it may
not have sufficient funds to operate for the next twelve months
from the date these financial statements are made available. Since
inception, the Company's operations have primarily been funded
through proceeds received from equity and debt financings. The
Company believes it has access to capital resources and continues
to evaluate additional financing opportunities. There is no
assurance that the Company will be able to obtain funds on
commercially acceptable terms, if at all. There is also no
assurance that the amount of funds the Company might raise will
enable the Company to complete its development initiatives or
attain profitable operations. The aforementioned factors raise
substantial doubt about the Company's 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/1559998/000149315223018420/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 $21.83 million for the year
ended Dec. 31, 2022, compared to a net loss of $2.39 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$18.69 million in total assets, $7.90 million in total liabilities,
and $10.79 million in total stockholders' equity.
New York, NY-based Marcum LLP, the Company's auditor since 2013,
issued a "going concern" qualification in its report dated April
17, 2023, citing that the Company has a significant working capital
deficiency, 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.
GLOBAL MEDICAL: Moody's Lowers CFR & First Lien Term Loan to Caa2
-----------------------------------------------------------------
Moody's Investors Service downgraded Global Medical Response,
Inc.'s ("GMR") ratings, including the Corporate Family Rating to
Caa2 from B3 and the Probability of Default Rating to Caa2-PD from
B3-PD. Moody's also downgraded the ratings of the company's senior
secured first lien term loan, term loan, and notes to Caa2 from B3.
The outlook remains negative.
The ratings downgrade reflects a further deterioration in operating
performance as a result of persistent inflationary cost pressures
and two separate fatal aviation accidents that have negatively
impacted the company's earnings. Moody's expects that inflationary
cost pressures, most notably from increased wages directed at
attracting and retaining human capital, specifically with pilots,
will continue and result in elevated operational expenses. Moody's
calculates GMR's pro forma debt-to-EBITDA in the low 10 times range
at March 31, 2023. Moody's expects leverage to remain elevated
above 8 times over the next 12 to 18 months, despite the company's
cost saving initiatives program. Additionally, Moody's anticipates
GMR to maintain adequate liquidity, albeit with lower free cash
flow generation as the company has exposure to higher interest
rates.
Governance and social risk considerations are material to the
rating action. With respect to social risks, GMR has experienced
two separate fatal aviation accidents in recent months that
negatively impacted the company's health and safety record of its
employees, in addition to disrupting operations. GMR's governance
risks are driven by the company's aggressive financial policies
vis-à-vis very high financial leverage, a recent track record of
missing forecasts and elevated refinancing risks.
Downgrades:
Issuer: Global Medical Response, Inc.
Corporate Family Rating, Downgraded to Caa2 from B3
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Senior Secured 1st Lien Term Loan, Downgraded to Caa2 from B3
Senior Secured Term Loan, Downgraded to Caa2 from B3
Senior Secured Notes, Downgraded to Caa2 from B3
Outlook Actions:
Issuer: Global Medical Response, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
GMR's Caa2 CFR is constrained by its very high financial leverage,
exposure to weather fluctuations in the air medical transport
business, labor pressures, and continued uncertainties surrounding
reimbursements under the No Surprises Act, which went into effect
on January 1, 2022. Moody's estimates that the company's pro forma
debt/EBITDA is in the low 10 times as of March 31, 2023. The rating
is also constrained by aggressive financial policies reflected in
high debt levels and a capital structure that is becoming
increasingly untenable.
GMR's rating benefits from the company's leading position as a
provider of end-to-end medical transportation services in the
United States. The company also benefits from a track record of
successful integration of past acquisitions, significant
diversification by geography, payor and services and growing
predictability of revenues from increasingly in-network commercial
payor sources.
Moody's expects GMR to have adequate liquidity over the next 12
months. The company had approximately $112 million in cash and
approximately $504 million of availability on its $700 million ABL
facility as of March 31, 2023. The ABL facility expires in 2027 and
is restricted by approximately $196 million of letters of credit.
That said, the maturity of the ABL springs forward to December 2024
if the term loan maturing in March 2025 is not refinanced. Moody's
expects GMR will generate negative free cash flow in 2023 before
paying approximately $40 million of mandatory term loan
amortization. These assumptions incorporate rising interest expense
as the company has exposure to higher interest rates despite
partial hedging. GMR has a minimum fixed charge covenant of 1.0x if
availability under the ABL drops below the greater of $49 million
and 10% of the line cap (defined as the lesser of the facility size
and borrowing base). Moody's expects adequate cushion should the
covenant be tested.
The Caa2 rating of the senior secured term loans and notes is the
same as the Caa2 CFR – reflecting the existence of sizeable
higher-ranked debt (ABL and promissory notes) as well as
lower-ranking secured debt which would provide the first loss
cushion in the event of bankruptcy. The senior secured debt has a
first lien security pledge on all assets (excluding aircraft),
capital stock and intercompany debt of the borrower and guarantors.
An exception to this are the assets securing the company's ABL
facility, on which it has a second lien pledge. The ABL collateral
includes cash, accounts receivable, inventory, spare parts, among
other items.
The outlook is negative. Moody's expects operational expenses to
remain high thus challenging GMR's earnings growth, profitability
and liquidity. Additionally, Moody's expects GMR's financial
leverage to remain over 8 times in the next 12 to 18 months and
that refinancing risks will remain elevated.
ESG CONSIDERATIONS
GMR's CIS-5 (previously CIS-4) indicates that the rating is lower
than it would have been if ESG risk exposures did not exist and
that the negative impact is more pronounced than for issuers scored
CIS-4. Primary drivers of the CIS-5 include governance risks (G-5),
driven by the company's aggressive financial policies vis-à-vis
very high financial leverage and poor management track record
following budget forecast misses. The score also reflects exposure
to social risks (S-4), most notably with human capital and the
company's susceptibility to labor shortages with pilots, EMTs,
paramedics, and nurses. GMR also has exposure to health and safety
risks, as the company must maintain a strong safety track record
with both its employees and patients while operating under
difficult conditions at times.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company materially improves
its earnings, debt-to-EBITDA, cash flows and interest coverage. The
ratings could also be upgraded if GMR significantly improves its
liquidity position and successfully refinances its capital
structure.
GMR's ratings could be downgraded if the company's liquidity
weakens, evident with sustained negative free cash flow. Ratings
could be downgraded if the company's operating performance further
deteriorates. Lastly, ratings could also be downgraded if the
prospects for a transaction that Moody's would deem a distressed
exchange or a default were to increase.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Global Medical Response, Inc. provides air, ground, specialty and
residential fire services, and managed medical transportation
through its wholly-owned subsidiaries -- Air Medical Group Holdings
LLC and AMR Holdco, Inc. The company is owned by investment funds
affiliated with investment firm Kohlberg Kravis Roberts & Co.
(KKR). Net revenues were approximately $5.1 billion for the last
twelve months ended March 31, 2023.
GULFSLOPE ENERGY: Incurs $396K Net Loss in Second Quarter
---------------------------------------------------------
Gulfslope Energy, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $396,066 on $0 of revenues for the three months ended March 31,
2023, compared to a net loss of $3.85 million on $0 of revenues for
the three months ended March 31, 2022.
For the six months ended March 31, 2023, the Company reported a net
loss of $760,433 on $0 of revenues compared to a net loss of $4.35
million on $0 of revenues for the six months ended March 31, 2022.
As of March 31, 2023, the Company had $5.39 million in total
assets, $14.67 million in total liabilities, and a total
stockholders' deficit of $9.28 million.
Gulslope said, "The Company has incurred accumulated losses as of
March 31, 2023 of $69.7 million, has negative working capital of
$14.6 million and for the six months ended March 31, 2023 generated
losses of $0.76 million. Further losses are anticipated in
developing our business. As a result, there exists substantial
doubt about our ability to continue as a going concern. As of
March 31, 2023, we had approximately $0.025 million of unrestricted
cash on hand. The Company estimates that it will need to raise a
minimum of $10.0 million to meet its obligations and planned
expenditures. The $10.0 million is comprised primarily of capital
project expenditures as well as general and administrative
expenses. It does not include any amounts due under outstanding
debt obligations, which amounted to $13.0 million of current
principal and accrued interest as of March 31, 2023. The Company
plans to finance operations and planned expenditures through the
issuance of equity securities, debt financings and farm-out
agreements, asset sales or mergers. The Company also plans to
extend the agreements associated with all loans, the accrued
interest payable on these loans, as well as the Company's accrued
liabilities. There are no assurances that financing will be
available with acceptable terms, if at all, or that obligations can
be extended. If the Company is not successful in obtaining
financing or extending obligations, operations would need to be
curtailed or ceased, or the Company would need to sell assets or
consider alternative plans up to and including restructuring. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1341726/000138713123006539/gspe-10q_033123.htm
About Gulfslope
Headquartered in Houston, Texas, Gulfslope Energy, Inc. --
http://www.gulfslope.com-- is an independent crude oil and natural
gas exploration and production company whose interests are
concentrated in the United States Gulf of Mexico federal waters.
GulfSlope Energy commenced commercial operations in March 2013.
Gulfslope Energy, Inc. reported a net loss of $8.70 million for the
year ended Sept. 30, 2022, compared to a net loss of $2.23 million
for the year ended Sept. 30, 2021. As of Sept. 30, 2022, the
Company had $5.47 million in total assets, $13.99 million in total
liabilities, and a total stockholders' deficit of $8.52 million.
Houston, Texas-based Pannell Kerr Forster of Texas, P.C., the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated Dec. 29, 2022, citing that the
Company has a net capital deficiency, and further losses are
anticipated in developing the Company's business, which raise
substantial doubt about its ability to continue as a going concern.
HUGHES CONTRACTING: Unsecureds Will Get 100% of Claims in Plan
--------------------------------------------------------------
Hughes Contracting Industries, Ltd., and Anthony Russo filed with
the U.S. Bankruptcy Court for the Southern District of New York a
Small Business Disclosure Statement for Amended Small Business Plan
dated May 18, 2023.
The Debtor is in the business primarily of steel fabrication with
its principal place of business at 391 Saw Mill River Road,
Yonkers, NY (the "Premises") which it leases from 931 Saw Mill
Realty an entity controlled by the late father of one of its
principals (the "Landlord").
The Debtor's sole shareholders Russo and Sherene Russo both serve
in senior roles as officers. Both receive salaries in the range of
$250,000.00 per year.
The Debtor's bankruptcy filing was the result of a decline in
revenue for several years. The decline was due to the general
setbacks in the economy, loss of business, and difficulties with
labor unions. Issues with labor unions and the terms of a
collective bargaining agreement precipitated the Chapter 11 filing.
Class 1 consists of Settled Claims. Settled Claims are those
liabilities that have been resolved pursuant to Order of this Court
dated October 19, 2020. The Debtor will abide by the terms of the
Stipulation. Class 1 Claim Holders are not impaired.
Class 2 consists of General Unsecured Claims. General Unsecured
Claims are not secured by any Assets of the Debtor and are not
entitled to priority under Section 507(a) of the Code. Unless the
holder of an Allowed Class 2 General Unsecured Claim agrees to less
favorable treatment, the Debtor shall pay holders of Allowed Class
2 Claims 100% of the amount of the Claim payable within 10 days of
the Effective Date.
Class 3 consists of Insider Claims. Insiders who hold a direct
Interest Claim against the Debtor shall not receive distribution
but shall continue to hold their respective claims pursuant to the
terms.
Class 4 consists of Equity Interests. Equity interest holders are
parties who hold an ownership interest in the Debtor. The only
holders of an equity interest in the Debtor are Russo and Sherene
Russo. Such Interests are classified as Class 4. The Plan provides
for Russo and Sherene Russo to retain their Interests in the
Debtor. The Class 4 Interest are unimpaired under the Plan.
Payments to creditors under the Plan will be made from (a) cash
contributed by Russo on the Effective Date and (b) funds realized
from the Debtor's business operations following the Effective
Date.
A full-text copy of the Disclosure Statement dated May 18, 2023 is
available at bit.ly/41X7wPj from PacerMonitor.com at no charge.
Counsel for the Debtor:
PENACHIO MALARA LLP
Anne Penachio, Esq
245 Main Street, Suite 450
White Plains, NY 10601
(914) 946-2889
About Hughes Contracting
Hughes Contracting Industries Ltd. is a New York corporation with
its principal place of business at 391 Saw Mill River Road,
Yonkers, New York, which it leases from 931 Saw Mill Realty, an
entity controlled by the father of one of its principals. The
Debtor is in the business primarily of steel fabrication.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 16-22463) on April 5, 2016,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Anne J. Penachio, Esq., at Penachio Malara
LLP.
Steven Gordon at Skwiersky, Alpert & Bressler LLP is the Debtor's
accountant.
The Debtor also hired Regina E. Faul, Esq., at Philip Nizer LLP as
special counsel.
IDEAL CARE: Seeks Extension to Confirm Plan to Sept. 25
-------------------------------------------------------
Ideal Care 4 U, Inc., filed a motion to extend the time to confirm
a Chapter 11 Small Business Plan of Reorganization and Disclosure
Statement.
The Debtor is a small business Debtor as defined in Sec. 101(51D)
of the Bankruptcy Code.
The Debtor requests an extension of the time by which a Plan of
Reorganization should be confirmed for an additional 90 days,
through and including September 25, 2023.
Throughout this bankruptcy case, the Debtor has worked diligently
and has complied with all administrative obligations during the
pendency of the case and has timely filed all Operating Reports and
paid Quarterly Fees.
This third request is not made for the purpose of delay. The third
requested extension of the time period for confirmation, is
necessary due to the fact, that the time to confirm a plan is set
to expire on June 26, 2023, but the Debtor needs an additional time
to obtain an approval of new Leases, and thereafter to proceed with
approval of disclosure statement and plan confirmation.
To date, the Debtor is waiting for new leases be executed by the
Landlords and thereafter the Debtor will file a motion for an
approval of these leases and will amend a plan and disclosure
statement.
Furthermore, in the event that the plan and disclosure statement
are needed to be amended or revised, the Debtor will need an
additional time in order to comply with the provisions of the
Bankruptcy Code.
Consequently, the second extension of the time period for
confirmation is vital for the Debtor, it will allow the Debtor to
amend and to confirm a Chapter 11 plan without violating the
Bankruptcy Code and to provide treatment to its Creditors.
Counsel for the Debtor:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel.: (718) 513-3145
Fax: (347)342-3156
E-mail: alla@kachanlaw.com
About Ideal Care
Jamaica, N.Y.-based Ideal Care 4 U, Inc., filed a petition for
Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41869) on July
21, 2021, listing $2,632,800 in assets and $190,252 in liabilities.
Olga Palankerina, president, signed the petition.
Judge Jil Mazer-Marino oversees the case.
The Debtor tapped The Law Offices of Alla Kachan, P.C. as legal
counsel and Wisdom Professional Services Inc. as accountant.
INMAR INC: S&P Alters Outlook to Stable, Affirms 'B-' ICR
---------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'B-' issuer credit rating on Inmar Inc. At the same
time, S&P assigned its 'B-' issue-level rating and '3' recovery
rating to the proposed senior secured credit facility, including a
$100 million revolving credit facility and $950 million first-lien
term loan.
The stable outlook reflects S&P's expectation that Inmar will
increase revenue and EBITDA in 2023 and sustain (FOCF) to debt in
the 2%-5% area.
The proposed transaction eliminates immediate refinancing risk.
Inmar's refinancing transaction extends maturities on its revolving
credit facility and first-lien term loan by two years to January
and May 2026 from January and May 2024, respectively. As part of
the transaction, the company will upsize its $75 million revolving
credit facility to $100 million. Additionally, the new capital
structure will include $485 million of payment-in-kind preferred
equity, which S&P treats as debt. The company will use proceeds
from the preferred equity to repay its $175 million second-lien
term and help refinance the first-lien term loan.
S&P said, "We believe Inmar will generate positive FOCF under the
pro forma debt capitalization. We forecast EBITDA growth and
reduced cash interest burden will sustain FOCF to debt in the 2%-5%
area in 2023 and 2024. The company's interest expense will likely
be lower because the term loan is reduced by $150 million, high
interest-bearing second-lien debt is repaid, and preferred equity
dividends are paid in kind. Despite our expectation for modestly
higher interest rates on the new debt, we estimate run-rate savings
of $15 million-$20 million cash interest costs per year under the
pro forma capitalization relative to the pre-transaction
structure.
"We believe Inmar's strong performance in the health care segment
and countercyclical demand for digital incentives products will
support organic revenue growth in 2023 and 2024. Inmar's health
care sales increased in the mid-to-high teen percents in 2022, and
we expect will continue to expand in at least the mid-single-digit
percents in 2023 and 2024 as pharmacies face more complex
regulatory compliance schemes for drug returns and disposal and the
company expands its subscription offerings. Our base case assumes
growth in the digital portion of Inmar's incentives and loyalty
business will hold up through a mild economic recession in the
second half of 2023 as grocery and retail clients use discounts and
promotions to secure sales volume. We forecast organic revenue
growth in the mid-single-digit percents and EBITDA margins
consistent with 2022.
"Macroeconomic factors and potential cost pressures in 2023 pose
risks to near-term EBITDA growth and free cash flow generation. We
believe the primary constraint of a mild macroeconomic recession on
Inmar's performance will be a pullback in corporate advertising
spending, which will temporarily stall the company's media segment
growth. While we expect some unfavorable labor and secondary resale
market dynamics affecting health care and Product Lifecycle
Solutions to ease, Inmar may face persistent elevated labor costs
that could dampen margin uplift in the near term. Unexpectedly high
one-time costs related to segment reorganization above our
base-case forecast could also hold back margins. As the U.S.
economy recovers in late 2023 or 2024, we believe competition to
regain consumer wallet share will drive consumer packaged goods and
retail customers uptake of Inmar's personalized, dynamic, and
targeted digital media products as strategic or complementary to ad
spending on incentives. We also expect a return to growth in the
media and incentives segments, supported by Inmar's cross-selling
strategy of digital media products across business lines."
ESG credit indicators: E-2, S-2, G-3
S&P said, "ESG factors have an overall negligible influence on our
ratings for Inmar. Governance factors are a moderately negative
consideration, as is the case for most rated entities owned by
private-equity sponsors. We believe the company's highly leveraged
financial risk profile points to corporate decision-making that
prioritizes the interests of controlling owners. This also reflects
the generally finite holding periods and a focus on maximizing
shareholder returns."
IYS VENTURES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: IYS Ventures, LLC
15416 South 70th Court
Orland Park, IL 60462
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 23-06782
Judge: Hon. David D. Cleary
Debtor's Counsel: Gregory K. Stern, Esq.
GREGORY K. STERN, P.C.
53 West Jackson Boulevard
Suite 1442
Chicago, IL 60604
Tel: (312) 427-1558
Fax: (312) 427-1289
Email: greg@gregstern.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Muwafak Rizek as manager, member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/42RCSXI/IYS_Ventures_LLC__ilnbke-23-06782__0001.0.pdf?mcid=tGE4TAMA
KEN FARRINGTON: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Ken Farrington Tractor & Landclearing, Inc. asks the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division, for authority to use cash collateral and provide adequate
protection to the United States Small Business Administration.
The Debtor requires the use of cash collateral to fund ordinary
business operations and necessary expenses.
Prior to the Petition Date, the Debtor obtained financing from the
SBA, which is purportedly secured by a lien on the Debtor's cash
and/or cash equivalents. The SBA may assert a first priority
security interest in the Debtor's cash and cash equivalents by
virtue of a UCC-1 Financing Statement filed with the State of
Florida on June 8, 2020. The outstanding balance owed to the SBA in
connection with a line of credit is approximately $150,000. In
addition, Fintegra, LLC may assert interest on the Debtor's cash
equivalents, which interests are inferior to the SBA.
The cash collateral the Debtor seeks to use is comprised of cash on
hand and funds to be received during normal operations which may be
encumbered by lien of the SBA.
As adequate protection for the use of cash collateral, the Debtor
proposes to grant the SBA a replacement lien on its post-petition
cash collateral to the same extent, priority, and validity as its
pre-petition liens, to the extent its use of cash collateral
results in a decrease in value of the SBA's interest in the cash
collateral.
The Debtor also requests the Court to set an expedited preliminary
hearing on the matter on or before Friday, May 26, 2023.
A copy of the Debtor's motion and the budget is available at
https://urlcurt.com/u?l=RCrqEP from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$9,452 for the week of May 22, 2023;
$9,452 for the week of May 29, 2023;
$9,452 for the week of June 5, 2023;
$9,452 for the week of June 12, 2023;
$9,452 for the week of June 19, 2023; and
$9,452 for the week of June 26, 2023.
About Ken Farrington Tractor & Landclearing, Inc.
Ken Farrington Tractor & Landclearing, Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Banker M.D. Fla. Case No.
23-01935) on May 22, 2023.
In the petition signed by Kenneth J. Farrington, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Daniel A. Velasquez, at the Latham Luna Eden and Beaudine, LLP,
represents the Debtor as legal counsel.
KEYSTONE GAS: Unsecureds Owed $1.18M Get 13% in Plan
----------------------------------------------------
Keystone Gas Corporation submitted a Second Amended Disclosure
Statement in support of the Plan of Reorganization.
The primary purpose of the Plan is to facilitate the resolution and
treatment of the Debtor's outstanding Claims, Liens and Equity
Interests. The Plan contemplates a number of restructuring
transactions, which will provide the basis and consideration for
claims against the Debtor.
Under the Plan, Class 8 Unsecured Claims of Producers total
$260,000. Each holder of an Allowed Producer Claim shall receive,
in full and final satisfaction of such claim, on or before the
one-year anniversary of the Effective Date, its Pro Rata share
(taking into account the total amount of Allowed Claims in Classes
8 and 9) of the GUC Cash. Creditors will recover 13% of their
claims. Class 8 is impaired.
Class 9 General Unsecured Claims total $1.18 Million. Each holder
of an Allowed General Unsecured Claim will receive in full and
final satisfaction of such claim, on or before the one-year
anniversary of the Effective Date, its Pro Rata share (taking into
account the total amount of Allowed Claims in Classes 8 and 9) of
the GUC Cash. Creditors will recover 13% of their claims. Class 9
is impaired.
On or before the Effective Date, the Debtor shall effect the
following restructuring transactions and execute all agreements,
instruments, and other documents necessary to complete such
transactions in the order specified:
1. On or prior to the Effective Date, Navitas and Southern
Kentucky shall form and capitalize Pipeline ParentCo. The capital
structure of Pipeline ParentCo shall include and require the
following:
a. Navitas shall contribute (i) the Navitas Prepetition Loan,
and (ii) $50,000.00 cash to Pipeline ParentCo in exchange for fifty
percent (50%) of the equity interests in Pipeline ParentCo; and
b. Southern Kentucky shall contribute $150,000.00 cash to the
Pipeline ParentCo in exchange for fifty percent (50%) of the equity
interests in Pipeline ParentCo.
2. On or prior to the Effective Date, Navitas and Southern
Kentucky shall form and capitalize ProcessingCo The capital
structure of ProcessingCo shall include and require the following:
a. Navitas shall contribute $300,000.00 cash to ProcessingCo
in exchange for 50% of the equity interests in ProcessingCo; and
b. Southern Kentucky shall contribute (i) the Post-Petition
DIP Loan and (ii) $200,000.00 cash to ProcessingCo in exchange 50%
of the equity interests in ProcessingCo.
3. On the Effective Date, Pipeline ParentCo shall purchase the
New Common Shares and the Octagon System in exchange for
forgiveness of the Navitas Prepetition Loan and the
Recapitalization Cash. The Debtor or Reorganized Debtor, as
applicable, is authorized to issue all Plan-related securities and
documents, including, without limitation, the New Common Shares,
without the need for any further corporate, partnership, or limited
liability action.
4. ProcessingCo shall purchase the Processing Assets from the
Debtor (the "Sale Transaction") in exchange for forgiveness of the
Post-Petition DIP Loan and the Sale Transaction Cash.
The Plan will be funded through (1) the Recapitalization Cash
received as partial consideration for the purchase of the New
Common Shares, (2) the Sale Transaction Cash received as partial
consideration for the purchase of the Processing Assets, (3) cash
on hand, and (4) payments over time from continued operations of
the Reorganized Debtor.
By order of the Bankruptcy Court, the "Voting Deadline" is 4:00
p.m. (CST), on June 23, 2023.
Counsel for the Debtor:
Megan F. Clontz, Esq.
SPENCER FANE LLP
5700 Granite Parkway, Suite 650
Plano, TX 75024
Telephone: (972) 324-0300
Facsimile: (972) 324-0301
E-mail: mclontz@spencerfane.com
- and -
Jason P. Kathman, Esq.
5700 Granite Parkway, Suite 650
Plano, TX 75024
Telephone: (972) 324-0300
Facsimile: (972) 324-0301
E-mail: jkathman@spencerfane.com
- and -
Courtney D. Powell, Esq.
9400 N. Broadway Extension, Suite 600
Oklahoma City, OK 73114
Telephone: (405) 844-9900
Facsimile: (405) 844-9958
E-mail: cpowell@spencerfane.com
A copy of the Disclosure Statement dated May 10, 2023, is available
at https://bit.ly/3LZRVbI from PacerMonitor.com.
About Keystone Gas Corporation
Keystone Gas Corporation, a utility service provider in Drumright,
Okla., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Okla. Case No. 22-12088) on Sept. 14, 2022. At
the time of the filing, the Debtor reported $1 million to $10
million in both assets and liabilities.
Judge Sarah A. Hall oversees the case.
The Debtor tapped Spencer Fane, LLP as legal counsel and HBC CPAs &
Advisors as accountant.
LANNETT COMPANY: U.S. Trustee Appoints Creditors' Committee
-----------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of Lannett Company, Inc. and its affiliates.
The committee members are:
1. Computershare Trust Company, N.A.
Attn: Megan Ford
9062 Old Annapolis Road
Columbia, MD 21045
Phone: (667) 786-1078
Email: megan.ford@computershare.com
2. Veranova, L.P.
Attn: Andres Gonzalez
435 Devon Park Drive, Suite 400
Wayne, PA 19807
Phone (484) 581-0152
Email: andres.gonzalez@veranova.com
3. Cediprof, Inc.
Attn: Marco Monrouzeau
99 Jardine Street
Caguas, PR 00725
Phone: (787) 286 -4309
Email: marco.monrouzeau@neolpharma.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Lannett Co. Inc.
Founded in 1942, Lannett Company, Inc. -- http://www.lannett.com/
-- develops, manufactures, packages, markets and distributes
generic pharmaceutical products for a wide range of medical
indications.
Lannett and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10559) on
May 3, 2023. Lannett disclosed total assets of $334,600,000 and
total debt of $708,940,000 as of March 31, 2023.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis International, LLP as
bankruptcy counsel; Fox Rothschild, LLP as local counsel; FTI
Consulting, Inc. as financial advisor; and Guggenheim Securities,
Inc. as investment banker; and Street Advisory Group as
communications advisor. Omni Agent Solutions is the claims agent.
Secured creditors are being advised by Sullivan & Cromwell LLP as
legal counsel and Houlihan Lokey Inc. as financial advisor.
LASERSHIP INC: S&P Lowers ICR to 'CCC+' on Constrained Liquidity
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on LaserShip
Inc. (doing business as OnTrac) to 'CCC+' from 'B-'.
S&P also lowered its issue-level ratings on the company's
first-lien term loan to 'CCC+' from 'B-' and second-lien term loan
to 'CCC-' from 'CCC'. The recovery ratings are unchanged at '3'
(rounded estimate: 50%) and '6' (rounded estimate: 0%),
respectively.
The negative outlook reflects S&P's expectation that liquidity
could deteriorate further if availability under the company's
revolving credit facility becomes restricted.
S&P said, "We expect OnTrac will face weaker macroeconomic
conditions in 2023. We continue to forecast a shallow recession in
2023 for the U.S. economy. We also anticipate lower consumer
spending growth, especially for goods, amid higher interest rates
and more normalized spending patterns (with greater share of
spending on services and in-person shopping). While we believe
OnTrac will grow volumes in 2023 due to the addition of new
customers and geographies, we expect overall lower demand may limit
this increase. OnTrac generally offers a lower-cost alternative to
larger parcel delivery companies, but some competitors utilize
volume-based pricing, which we believe may lead shippers to divert
some volumes. Competitors may also become more price competitive
due to the weaker demand environment. Therefore, we anticipate
volumes will grow around 10% in 2023, while pricing remains flat,
resulting in total revenue growth in the high-single-digit percent
area.
"We anticipate the company will continue to expand its service
offerings. Following the introduction of its transcontinental
service in 2022, OnTrac plans to introduce new services in Texas
this year. This will require some capital investment, primarily in
new sortation facilities. We view this initiative as central to
OnTrac's strategy of building a national delivery network, and we
believe it will allow the company to compete more effectively
against larger peers. Nonetheless, this strategy also introduces
more fixed costs via warehouses and additional linehaul truck
routes. We currently forecast EBITDA margins will improve to the
low-teens percent area in 2023, up from around 10%-12% in 2022,
supported by productivity initiatives and lower headcount. However,
given the added fixed costs with its expansion, margins could
weaken if volumes do not grow in line with our current
expectations.
"We forecast higher interest rates and continued capital spending
will weigh on cash flow and credit metrics. The majority of
OnTrac's debt is floating rate, and its interest rate hedges will
not become effective until November. As a result, we expect total
cash interest expense will continue to increase in 2023. Further,
we expect capital expenditures (capex) of about $45 million. While
this represents a decrease in capex from about $100 million in
2022, we do not believe the company has flexibility to reduce
spending further since it's mostly related to the company's
expansion strategy. This will result in continued negative free
operating cash flow (FOCF) this year of approximately negative $25
million-$35 million (on an S&P Global Rating-adjusted basis), down
from our previous expectation of around breakeven. In order to
finance this shortfall, our base-case scenario assumes the company
will fully utilize its receivables securitization facility, which
has a capacity of up to $250 million during peak season, and make
significant draws on its $125 million revolving credit facility. In
our view, this limits the company's liquidity as well as its
operational flexibility if demand declines further than we expect.
"We believe higher cash interest expense and incremental debt will
also delay an improvement in the company's credit metrics. We
expect OnTrac's funds from operations (FFO) to debt (which we
calculate as EBITDA less cash interest and cash taxes) will remain
in the low-single-digit percent area in 2023, consistent with 2022
levels. We also expect debt to EBITDA in the high-single-digit area
in 2023, down slightly from around 10x-11x in 2022 but still
elevated. This compares to our prior expectation for FFO to debt in
the mid-single-digit percent area and debt to EBITDA of around 7x
this year.
"The negative outlook reflects our view that OnTrac faces liquidity
constraints over the next 12 months. We estimate the company will
generate an FOCF deficit this year amid elevated cash interest
expense and capital spending. We anticipate this will require the
company to use a significant portion of its revolving credit and
receivables securitization facilities to fund its operations. In
our view, lower-than-expected volumes due to weaker macroeconomic
conditions could lead to a liquidity shortfall.
"We could lower our ratings if we come to believe OnTrac will
default or enter into a distressed exchange offer over the next 12
months in the absence of an unforeseen positive development, likely
due to a liquidity crisis." This could occur if:
-- Availability under its revolving credit facility becomes
restricted, either through a covenant violation or
larger-than-expected draw; or
-- Weaker consumer demand or unexpected operational issues lead to
lower volumes, resulting in a larger cash flow shortfall.
S&P said, "We could revise our outlook to stable over the next 12
months if the company's liquidity position improves beyond our
current expectations, sufficiently mitigating our concerns for a
potential liquidity crisis. In this scenario, we would expect
OnTrac to have greater access to its revolver, most likely from a
lower-than-expected cash flow deficit."
ESG credit indicators: E-2; S-2; G-3
S&P said, "Governance factors have a moderately negative influence
on our credit rating analysis of OnTrac. We view financial sponsor
owned companies with highly leveraged financial risk profiles as
demonstrating corporate decision making that prioritizes the
controlling owners' interests, typically with finite holding
periods and a focus on maximizing shareholder returns."
LINDEN CENTER: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Linden Center LLC
33-37 Farrington Street
Flushing, NY 11354
Business Description: The Debtor is the owner of a certain real
property located at 33-37 Farrington Street
(a/k/a 34-20 Linden Place), Flushing, New
York, 11354 (Block 4950 and Lot 18).
The Premises was acquired in 2017 for
approximately $21 million from a bankruptcy
estate. The Premises is a multi-story
commercial retail building that may
currently be occupied by multiple commercial
tenants, including dining establishments, a
day care, and a doctor's office.
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-41820
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Eric H. Horn, Esq.
A.Y. STRAUSS LLC
101 Eisenhower Parkway, Suite 412
Roseland, NJ 07068
Tel: 973-287-5006
Fax: 973-226-4104
Email: ehorn@aystrauss.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Howard Konicov 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/TDYT5TY/Linden_Center_LLC__nyebke-23-41820__0001.0.pdf?mcid=tGE4TAMA
LPI LLC: Taps Michael D. O'Brien & Associates as Legal Counsel
--------------------------------------------------------------
LPI, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Oregon to employ Michael D. O'Brien & Associates P.C.
as its counsel.
The firm's services include negotiating financing orders, seeking
authorization for use of cash collateral, reviewing and evaluating
the status and validity of secured claims, and formulating a
Chapter 11 plan of reorganization.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Michael O'Brien, Partner $450 per hour
Theodore Piteo, Partner $400 per hour
Hugo Zollman, Senior Paralegal $185 per hour
Lauren Gary, Paralegal $125 per hour
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor an advance payment of $25,000.
Michael O'Brien, Esq., a partner at Michael D. O'Brien &
Associates, disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Michael D. O'Brien, Esq.
Theodore J. Piteo, Esq.
Michael D. O'Brien & Associates, P.C.
12909 SW 68th Pkwy, Suite 160
Portland, OR 97223
Tel: (503) 786-3800
Email: enc@pdxlegal.com
About LPI LLC
LPI, LLC, a company in Albany, Ore., filed its voluntary petition
for Chapter 11 protection (Bankr. D. Ore. Case No. 23-60789) on May
10, 2023, with $2,064,118 in assets and $974,196 in liabilities.
Mahmood Almayah, a member of LPI, LLC, signed the petition.
Judge Thomas M. Renn oversees the case.
Michael D. O'Brien & Associates, P.C. is the Debtor's legal
counsel.
LURADIANT LLC: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Luradiant, LLC
942 S. 250 E.
Farmington UT 84025
Business Description: The Debtor is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
District of Utah
Case No.: 23-22098
Judge: Peggy Hunt
Debtor's Counsel: T. Edward Cundick, Esq.
WORKMAN NYDEGGER
60 E. South Temple St., Suite 1000
Salt Lake City Utah 84111
Tel: (801) 533-9800
Email: tcundick@wnlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Glade Jones as Glade Jones as Manager of
Imprint Builders, LLC, which is the controlling member of
Luradiant, LLC.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/BOOOA4A/Luradiant_LLC__utbke-23-22098__0001.0.pdf?mcid=tGE4TAMA
MACON-BIBB COUNTY URBAN: Moody's Cuts 2018A Housing Bonds to Ba2
----------------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Baa3 the
rating on Macon-Bibb County Urban Development Authority's (GA)
Multi-Family Housing Revenue Bonds (Dempsey Apartments Project),
Series 2018A bonds. The outlook is revised to negative from ratings
under review. The rating action concludes the review for downgrade
initiated on March 30, 2023.
RATINGS RATIONALE
The downgrade is based on the lower than expected (88%) project
occupancy for the 2023 fiscal year and increased expenses due to
continuing maintenance challenges which has resulted in a less than
adequate financial performance. Declines in occupancy at the
project are primarily due to unit turnover delays as demand for the
project remains strong. The project has enough money on hand to
cover the June 1, 2023 debt service payment. If project occupancy
does not materially increase in fiscal year 2024 there may be the
potential for the project to tap into surplus or operating reserve
funds to cover the December 1, 2023 debt service payment on the
bonds.
RATING OUTLOOK
The outlook is negative due to the project's declining liquidity
position and occupancy challenges that are expected to continue
over the outlook period. A further downgrade is likely should
occupancy not materially increase in the 2024 fiscal year.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Occupancy growth that could positively impact debt service
coverage
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Expectation of future taps to the debt service reserve in order
to pay debt service
-- Additional declines in occupancy that results in continuous
declines of debt service coverage
-- Continued increased expenses
LEGAL SECURITY
The Bonds are limited obligations of the Issuer, payable solely
from the net revenues of the property and secured by a first lien
leasehold mortgage, an assignment of rents and HAP contracts. Legal
covenants for the bonds include provisions for the borrower to
retain a consultant if debt service coverage falls below 1.20x.
PROFILE
The issuer, Macon-Bibb County Urban Development Authority, is the
sole member of, UDA Dempsey, LLC, a Georgia limited liability
company, the owner of the project and obligor of the Bonds.
METHODOLOGY
The principal methodology used in this rating was Global Housing
Projects published in June 2017.
MICROGEM US: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------
John Fitzgerald, III, Acting U.S. Trustee for Region 4, appointed
an official committee to represent unsecured creditors in the
Chapter 11 case of MicroGEM US, Inc.
The committee members are:
1. Maxtek Components Corp.
Attn: David Kang
2905 SW Hocken Ave.
Beaverton, OR 97005
Email: david.kang@tekrtonix.com
2. Marlow Industries, Inc.
Attn: Mark Alipaz
10451 Vista Park Road
Dallas, TX 75238
Email: mark.alipaz@coherent.com
3. Baron Machine Co., Inc.
Attn: Jeremy Baron
40 Primrose Dr. South
Laconia, NH 03246
Email: jeremyb@baronmachine.com
4. Team Technologies (Baril Corporation)
Attn: Ken Kovacs
5949 Commerce Blvd.
Morristown, TN 37814
Email: ken.kovacs@teamtech.com
5. Ceres Nanosciences, Inc.
Attn: Ross Dunlap
9760 Innovation Dr.
Manassas, VA 20110
Email: rdunlap@ceresnano.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About MicroGEM US Inc.
MicroGEM US Inc. offers scientific research and development
services. It is based in Charlottesville, Va.
MicroGEM US filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Va. Case No. 23-60528) on May 8, 2023.
In the petition filed by Mark Allen, as manager, the Debtor
reported assets between $1 million and $10 million and liabilities
between $50 million and $100 million.
The case is overseen by Honorable Bankruptcy Judge William J.
Fisher.
The Debtor is represented by Brandy M. Rapp, Esq., at Whiteford
Taylor & Preston, LLP.
NANO MAGIC: Incurs $653K Net Loss in First Quarter
--------------------------------------------------
Nano Magic Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $653,037 on $697,029 of net revenues for the three months ended
March 31, 2023, compared to a net loss of $1.06 million on $519,143
of net revenues for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $3.69 million in total
assets, $2.54 million in total liabilities, and $1.16 million in
total stockholders' equity.
The Company had losses from continuing operations and net cash used
by continuing operations of $653,037 and $303,024 for the three
months ended March 31, 2023, respectively, and a loss from
continuing operations of $1,077,997 and cash used by continuing
operations of $739,906 for the three months ended March 31, 2022.
"These factors raise substantial doubt about the Company's ability
to continue as a going concern within one year after the date that
these unaudited consolidated financial statements are issued.
Management cannot provide assurance that the Company will
ultimately achieve profitable operations, become cash flow positive
or raise additional capital."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/891417/000149315223017092/form10-q.htm
About Nano Magic
Headquartered in Madison Heights, Michigan, Nano Magic Inc., now
known as Nano Magic Holdings Inc. -- www.nanomagic.com -- develops,
commercializes and markets consumer and industrial products powered
by nanotechnology that solve everyday problems for customers in the
optical, transportation, military, sports and safety industries.
Nano Magic reported a net loss of $2.10 million for the year ended
Dec. 31, 2022, compared to a net loss of $1.57 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $4.09
million in total assets, $2.47 million in total liabilities, and
$1.62 million in total stockholders' equity.
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 11, 2023, citing that the Company has recurring losses
from operations, negative cash flow from operations, and an
accumulated deficit. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
NEUROEM THERAPEUTICS: Contributions & Future Income to Fund Plan
----------------------------------------------------------------
NeuroEM Therapeutics, Inc., filed with the U.S. Bankruptcy Court
for the Middle District of Florida a Plan of Reorganization dated
May 18, 2023.
The Debtor was incorporated in Delaware on July 1, 2013. The Debtor
is a medical device company committed to developing, clinically
testing, and marketing Transcranial Electromagnetic Treatment
("TEMT") as an effective treatment for Alzheimer's Disease and
other neurodegenerative diseases.
The Debtor is currently working on launching a consumer grade
device based on current research, in parallel to pursuing FDA
approval of the MemorEM device as a medical utilizing funding from
an NIH grant. The Debtor's primary research facilities operate out
of USF in Tampa, Florida.
The Plan under Chapter 11 of the Bankruptcy Code proposes to pay
creditors of the Debtor from the Debtor's current and future
earnings.
This Plan provides for one class of priority claims, one class of
executory contract claims, two classes of general unsecured claims,
and one class of equity security holder claims. All claimants will
be paid at least one hundred percent of their allowed claim as of
the Petition Date in either cash or equity in the reorganized
Debtor.
Class 3 consists of General unsecured claims allowed under Section
502 of the Bankruptcy Code which had the option to be converted to
equity in the Debtor prior to the filing of the Voluntary Petition.
All claims based on debt that included a provision in the
underlying loan documents allowing the claimant to convert the debt
to equity in the Debtor are treated in this class. Claimants in
this class may elect to have their claims treated pursuant to one
of the two following options:
* Option 1: Claimants will receive a 1.25X return on the
amount of their allowed claim as of the Petition Date (i.e., an
allowed claim of $100,000 would receive a total distribution of
$125,000), which the Debtor will pay in full, without post-petition
interest, on or before February 28, 2026. The Debtor, at its sole
discretion, may elect to pay these claims in a lump sum or over
time. There is no pre-payment penalty.
* Option 2: Claimants' allowed claims as of the Petition Date
will be converted to equity on February 28, 2026 (the "Conversion
Date") at the fair market value of the Debtor on the Conversion
Date at a 20% discount (i.e., an allowed claim of $100,000 would be
treated as an allowed claim of $120,000 for purposes of conversion
to equity).
On or before the thirtieth day following the entry of the
Confirmation Order, Claimants in this class must file a written
election with the Court stating which option they desire their
claim to be treated under, otherwise the claim will be treated
pursuant to Option 1. Claimants electing treatment under Option 1
shall be entitled to choose amongst themselves a single observer
who will have the authority to sit in on all meetings of the Board
of Directors, but will have no right to vote.
Class 4 consists of General unsecured claims allowed under Section
502 of the Bankruptcy Code which do not include an option to be
converted to equity. Claimants in this class will be paid 100% of
their allowed claims without post-petition interest on or before
February 28, 2026. The Debtor, at its sole discretion, may elect to
pay these claims in a lump sum or over time. There is no
pre-payment penalty.
Class 5 consists of Equity Security Holders of the Debtor. Current
equity will retain ownership in the Debtor post-confirmation,
subject to any dilution resulting from Class 3 claimants electing
to proceed under Option 2.
The Plan will be funded by capital contributions from its Chief
Science Officer, Dr. Gary Arendash, a venture capital investment to
launch a consumer device and the current and future income earned
by the Debtor through the sales of the consumer device. The
Debtor's plan will not be funded by any funds the Debtor receives
through NIH or NIA grants. Grant funds shall be used exclusively
for expenses related to research on the MemorEM device.
A full-text copy of the Plan of Reorganization dated May 18, 2023
is available at https://urlcurt.com/u?l=P64wQL from
PacerMonitor.com at no charge.
Attorney for Debtor:
Buddy D. Ford, Esq.
Jonathan A. Semach, Esq.
Heather M. Reel, Esq.
Buddy D. Ford, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Email: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
About NeuroEM Therapeutics
NeuroEM Therapeutics, Inc., is a Phoenix-based medical device
company committed to developing, clinically testing, and marketing
Transcranial Electromagnetic Treatment (TEMT) as treatment for
Alzheimer's disease and other neurodegenerative diseases.
NeuroEM Therapeutics filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
23-00425) on Feb. 3, 2023, with $100,000 to $500,000 in assets and
$1 million to $10 million in liabilities.
Judge Catherine Peek McEwen oversees the case.
Buddy D. Ford, Esq., at Buddy D. Ford, P.A., is the Debtor's
counsel.
NXT ENERGY: Posts C$1.6 Million Net Loss in First Quarter
---------------------------------------------------------
NXT Energy Solutions, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report disclosing a net loss and
comprehensive loss of C$1.61 million on C$0 of revenue for the
three months ended March 31, 2023, compared to a net loss and
comprehensive loss of C$1.84 million on C$0 of revenue for the
three months ended March 31, 2022.
As of March 31, 2023, the Company had C$15.24 million in total
assets, C$3.06 million in total liabilities, and C$12.18 million in
shareholders' equity.
NXT said, "The Company's current cash position is not expected to
be sufficient to meet the Company's obligations and planned
operations for a year beyond the date that these condensed
consolidated interim financial statements have been issued.
"The Company has deferred payment of operating costs, including
payroll and other general and administrative costs. Further
financing options that may or may not be available to the Company
include issuance of new equity, debentures or bank credit
facilities. The need for any of these options will be dependent on
the timing of securing new SFD related revenues and obtaining
financing on terms that are acceptable to both the Company and the
financier.
"NXT continues to develop its pipeline of opportunities to secure
new revenue contracts. However, the Company's longer-term success
remains dependent upon its ability to convert these opportunities
into successful contracts, to continue to attract new client
projects, expand its revenue base to a level sufficient to exceed
fixed operating costs, and generate consistent positive cash flow
from operations. The occurrence and timing of these events cannot
be predicted with sufficient certainty."
The Company said there is substantial doubt about its ability to
continue as a going concern within one year after the date that
these condensed consolidated interim financial statements have been
issued.
A full-text copy of the Quarterly Report is available for free at:
https://www.sec.gov/Archives/edgar/data/1009922/000165495423006876/nxt_ex991.htm
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
NXT Energy a net loss and comprehensive loss of C$6.73 million in
2022, a net loss and comprehensive loss of C$3.12 million in 2021,
a net loss and comprehensive loss of $6.03 million in 2020.
Calgary, Canada-based KPMG LLP, the Company's auditor since 2006,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company's current and forecasted cash and
cash equivalents and short-term investments position are not
expected to be sufficient to meet its obligations which raises
substantial doubt about its ability to continue as a going concern.
O'DAR GROUP: Gets OK to Hire Gleichenhaus as Legal Counsel
----------------------------------------------------------
O'Dar Group, LLC received approval from the U.S. Bankruptcy Court
for the Western District of New York to hire Gleichenhaus, Marchese
& Weishaar, P.C. as its legal counsel.
The Debtor requires legal counsel to:
(a) give advice with respect to the Debtor's powers and duties
in the continued operation of its business and in the management of
its assets;
(b) take necessary action to avoid liens against the Debtor's
property, remove restraints against the property and such other
actions to remove any encumbrances of liens which are avoidable,
which were placed against the property of the Debtor prior to its
bankruptcy filing, and at a time when the Debtor was insolvent;
(c) take necessary action to enjoin and stay until final
decree any attempts by secured creditors to enforce liens upon
property of the Debtor in which the Debtor has substantial equity;
(d) represent the Debtor in any proceedings which may be
instituted in this court by creditors or other parties during the
course of this proceeding;
(e) prepare legal papers; and
(f) perform all other legal services.
The firm will charge these hourly fees:
Michael A. Weishaar, Esq. $395
Scott Bogucki, Esq. $375
Other Attorneys $350
Paralegals $100
The firm received a retainer in the amount of $5,000.
As disclosed in court filings, Gleichenhaus is a "disinterested
person" pursuant to Bankruptcy Code Section 101(14).
The firm can be reached through:
Michael A. Weishaar, Esq.
Gleichenhaus, Marchese & Weishaar, P.C.
43 Court Street 930 Convention Tower
Buffalo, NY 14202
Phone: 716-845-6446
Email: rbg_gmf@hotmail.com
About O'Dar Group
O'Dar Group, LLC sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 23-10349) on April
18, 2023, with $100,001 to $500,000 in both assets and liabilities.
Judge Carl L. Bucki oversees the case.
Michael A. Weishaar, Esq., at Gleichenhaus, Marchese & Weishaar,
P.C., represents the Debtor as counsel.
OFFSHORE SPARS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Offshore Spars Co.
50200 E. Russell Schmidt Blvd.
New Baltimore, MI 48051
Business Description: Offshore Sparsin designs and manufactures
composite spars and structures for the
sailing and Superyacht industries.
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Eastern District of Michigan
Case No.: 23-44657
Judge: Hon. Thomas J. Tucker
Debtor's Counsel: Charles D. Bullock, Esq.
STEVENSON & BULLOCK, P.L.C.
26100 American Drive
Suite 500
Southfield, MI 48034
Tel: (248) 354-7906 Ext. 2224
Email: cbullock@sbplclaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Eric Graczyk as president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/MFX5SQQ/Offshore_Spars_Co__miebke-23-44657__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/P7KZFMQ/Offshore_Spars_Co__miebke-23-44657__0001.0.pdf?mcid=tGE4TAMA
OFFSHORE SPARS: Seeks Cash Collateral Access
--------------------------------------------
Offshore Spars Co. asks the U.S. Bankruptcy Court for the Eastern
District of Michigan in Detroit for authority to use cash
collateral.
The Debtor requires the use of cash collateral to pay employees,
pay necessary overhead expenses, and maintain its relationships
with customers.
In January 2022, the Debtor was acquired by Graczyk Holdings, LLC,
a Michigan limited liability company whose sole member is Eric
Graczyk. Not until after the purchase of the Debtor did Graczyk
discover numerous financial improprieties, breaches of warranties,
and general mismanagement that had befallen the Debtor under
previous ownership. Though Graczyk spent considerable time and
effort prior the Petition Date attempting to remedy such matters, a
reorganization of the business through a Subchapter V bankruptcy
became necessary.
On the Petition Date, the Debtor, without admission, believes the
cash collateral, as defined in 11 U.S.C. section 363, consists of:
* Collectible accounts receivable valued at approximately
$34,000; and
* Available Funds held in bank accounts valued at
approximately $52,594.
Before the Petition Date, Pathward, National Association filed a
UCC-1 financing statement against certain of the Debtor's assets,
including its cash collateral. The Debtor anticipates Pathward will
assert a security interest in the Debtor's Cash Collateral. The
Debtor further anticipates that Pathward will assert that its
security interest and liens have first priority over all other
security interests and liens asserted against the Debtor.
The Debtor believes no entities have an interest in its cash
collateral other than Pathward.
As adequate protection, the Debtor offers replacement liens on its
assets which are created, acquired, or arise after the Petition
Date, but limited to only those types and descriptions of
collateral in which Pathward held a pre-petition lien or security
interest. The Replacement Liens shall have the same priority and
validity as Pathward's pre-petition security interests and liens.
As additional adequate protection, the Debtor proposes to pay, or
cause to be paid, to Pathward $10,000 per month. The first payment
will be due by June 20, 2023 with subsequent monthly payments due
on the 20th day of each subsequent month.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=AkyXA0 from PacerMonitor.com.
The Debtor projects total disbursements, on a monthly basis, as
follows:
$25,500 for May 2023;
$247,040 for June 2023;
$228,725 for July 2023; and
$201,158 for August 2023.
About Offshore Spars Co.
Offshore Spars Co. was established in 1976 and its primary business
is designing and manufacturing carbon fiber and composite masts and
booms for the global superyacht market. Offshore Spars has
additional lines of business including replacement and service of
standing and running rigging for yachts, e-commerce, and carbon
fiber manufacturing for other industries, including the aerospace
and automotive industries.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-44657-tjt) on May
23, 2023. In the petition filed by Eric Graczyk, president, the
Debtor disclosed up to $50,000 in assets and up to $20 million in
liabilities.
Judge Thomas J Tucker oversees the case.
Charles D. Bullock, Esq., at Stevenson & Bullock, P.L.C.,
represents the Debtor as legal counsel.
OMNIQ CORP: Incurs $3.5 Million Net Loss in First Quarter
---------------------------------------------------------
Omniq Corp. has filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $3.51
million on $27.82 million of total revenues for the three months
ended March 31, 2023, compared to a net loss of $2.57 million on
$26.32 million of total revenues for the three months ended March
31, 2022.
As of March 31, 2023, the Company had $68.47 million in total
assets, $81.31 million in total liabilities, and a total
stockholders' deficit of $12.84 million.
The Company said the following are the principal conditions or
events which potentially raise substantial doubt about the
company's ability to continue as a going concern:
* Balancing the need for operational cash with the need to add
additional products
* Timely and cost-effective development of products
* Working capital deficit of $39.6 million as of March 31, 2023
* Accumulated deficit of $88 million as of March 31, 2023
* Multiple periods of losses from operations
* Noncompliance with certain debt covenants
The Company said its continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis, which the Company has successfully
accomplished to date.
Management Discussion
"Our team's focused efforts lead to another strong quarter
resulting in record-breaking revenues of $27.8 million," said Shai
Lustgarten, CEO of OmniQ. "Importantly, we saw a significant
rebound in margins from Q4 2022 to Q1 2023 of 21.8% vs 16%, a trend
which we feel confident will continue. Each of our verticals
experienced strong growth, with our AI sector seeing a sales
increase of 88% following last quarter's 100% increase. Our AI
margins continue to improve, as a result of strong execution and
driven by our proprietary parking and security solution.
"In addition, our Safe City division has seen a dramatic increase
in demand from both our currently deployed states as well as
expansion into new states. Our overall growth came from a wide
group of customers and variety of sectors including safe city,
supply chain, parking, hospitals, restaurant and retail. This
diversity continues to not only solidify our growth plans, it also
shows once again that our technology has demand and success from
multiple large verticals who depend on our technology and services
to improve their day-to-day operations.
"We are pleased to report that our company has maintained a strong
momentum, and we look forward to Q2 and beyond. Our growth
strategy is yielding positive results as we take proactive measures
to increase efficiency and drive profitability.
"I express my sincere gratitude to our dedicated employees for
their hard work, innovative thinking, and unwavering commitment to
excellence. It is through their collective efforts that we have
become the preferred supplier for some of the most demanding
customers in the world. I would also like to extend a special
thanks to our valued investors and partners for their continued
support, which enables us to pursue our growth strategy with
confidence."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/278165/000149315223017463/form10-q.htm
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic and parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq Corp reported a net loss of $13.61 million for the year ended
Dec. 31, 2022, compared to a net loss of $13.14 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$64.81 million in total assets, $75.34 million in total
liabilities, and a total deficit of $10.53 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
PECOS ENTERTAINMENT: Says New Lease to Fund Plan Payments
---------------------------------------------------------
Pecos Entertainment LLC submitted a Disclosure Statement pursuant
to Section 1125 of the Bankruptcy Code dated May 10, 2023.
The Debtor was formed in 2011 for the purpose of acquiring real
property located at 421 Oak Street, Pecos, Texas ("Property"). The
Property is a abandoned movie theater. The Debtor acquired the
Property with the intention of renovating the Property into a
multi-purpose entertainment space and then renting out the
Property. The Debtor set out to rehabilitate the Property but was
unable to complete renovations when it was unable to secure
additional funding for the renovations.
The Debtor's primary lender had posted the Property for foreclosure
in October 2022. This bankruptcy was filed to allow the Debtor
additional time to locate funds to complete the renovations.
Since the filing of the bankruptcy, the Debtor has worked on trying
to attract funding. The Debtor has not been able to secured
additional funding, however, the Debtor has been the reach an
agreement, subject to approval of this Plan, which will provide the
Debtor with funds necessary to pay the proposed Plan payments.
The Debtor's future business operations consist of the rental
income derived from the Property. The Debtor shall enter into a
lease with Seagram Group, Ltd.. The terms of the Lease will
provide the Debtor with monthly income in the amount of $6,500.
The Lease will be for 5 years with two 5 year options. Seagram
will be responsible for taxes and insurance on the Property.
Upon Confirmation of the Debtor's Plan, current ownership will
maintain its status.
Under the Plan, Class 6 Allowed Unsecured Claims are impaired. All
unsecured creditors of Debtor shall share pro rata in the unsecured
creditors pool. The Debtor shall make monthly payments commencing
30 days after the Effective Date of $1,000 into the unsecured
creditors' pool. The Debtor shall make 60 payments into the
unsecured creditors pool.
The Debtor anticipated the continued operations of the business and
the rental from the Property to fund the Plan.
Attorneys for the Debtor:
Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 850
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
A copy of the Disclosure Statement dated May 10, 2023, is available
at https://bit.ly/44QTIsl from PacerMonitor.com.
About Pecos Entertainment
Pecos Entertainment LLC is a single asset real estate (as defined
in 11 U.S.C. Sec. 101(51B)). It owns the property located at 421
Oak Street, Pecos, Texas.
Pecos Entertainment filed a petition for relief under Chapter 11 of
the Bankruptcy Code on Oct. 3, 2022, with between $500,000 and $1
million in assets and between $1 million and $10 million in
liabilities. Ram Kumwar, managing member, signed the petition.
The Debtor is represented by Eric A. Liepins, P.C.
PHINIA INC: Moody's Assigns First Time Ba1 Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to PHINIA
Inc., including a Ba1 corporate family rating and a Ba1-PD
probability of default rating. Moody's also assigned Ba1 ratings to
the company's proposed senior secured credit facility, consisting
of a revolving credit facility, Term Loan A and Term Loan B. The
outlook is stable. At the same time, Moody's assigned an SGL-2
Speculative Grade Liquidity rating.
The rating assignments follow PHINIA's announced financing plans in
conjunction with BorgWarner Inc.'s (BorgWarner) anticipated spinoff
of its Fuel Systems and Aftermarket segments, now known as PHINIA.
Proceeds from this financing will be used to make a payment to
BorgWarner. Concurrent with the initial borrowings, BorgWarner
will spin-off PHINIA into a new publicly traded company.
The ratings reflect strong margins from high-value add products
manufactured in lower cost locales, good geographic, customer and
end market diversity and stable and recurring revenue provided by
the automotive aftermarket segment. Moody's expects annual organic
revenue growth of at least 2%, an EBITA margin around 10% and
annual free cash flow near $150 million. Debt-to-EBITDA is
anticipated to remain below 2.5x even with occasional bolt-on
acquisitions. All metrics are inclusive of Moody's standard
adjustments.
PHINIA's credit impact score of CIS-4 reflects its significant
internal combustion engine exposure and risks associated with
balancing near-to-intermediate term growth in gasoline direct
injection technologies and emissions reduction with longer-term
alternative propulsion solutions such as hybrid and hydrogen. The
company's high exposure to carbon transition risk is also reflected
in the environmental issuer profile score (IPS) of E-4. Heavy
reliance on internal combustion engine revenue and a forward
strategy that does not include supplying parts to electric vehicle
platforms also creates high demographic & societal trends risk,
resulting in a social IPS of S-4. From a governance perspective,
PHINIA does not have a track record of a standalone financial
policy but is expected to maintain a similar, prudent strategy to
that previously demonstrated by BorgWarner. This is reflected in
the governance IPS of G-3. Moody's expects the company to focus on
bolt-on acquisitions versus larger, debt financed transformational
transactions.
Moody's took the following rating actions on PHINIA Inc.:
Assignments:
Issuer: PHINIA Inc.
Corporate Family Rating, Assigned Ba1
Probability of Default Rating, Assigned Ba1-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Senior Secured Revolving Credit Facility, Assigned Ba1
Senior Secured Term Loan A, Assigned Ba1
Senior Secured Term Loan B, Assigned Ba1
Outlook, Assigned Stable
RATINGS RATIONALE
The ratings reflect PHINIA's strong market position in gasoline
direct injection technologies with products that help original
equipment manufacturers manage the transition to alternative
propulsion vehicles. The pace towards electrification is
accelerating in the global light vehicle market. However, PHINIA's
commercial vehicle/off-highway and the aftermarket segments present
growth opportunities. Commercial vehicles have been slower to
adopt electrification due to the size and irregular activities of
the vehicles while the aftermarket segment provides stability to
revenue and earnings with a large and growing, global used car
parc.
The stable outlook reflects PHINIA's position as a leading supplier
of fuel injection technologies and key aftermarket products
supporting solid top-line growth at least through the intermediate
term. Recovering, but still choppy, new vehicle production, and a
large, global used car parc should provide opportunities to
steadily increase margins and cash flow despite a challenging
macroeconomic environment.
PHINIA's SGL-2 Speculative Grade Liquidity Rating is supported by
Moody's expectations for a sustained cash position of at least $300
million and annual free cash flow near $150 million. Additional
liquidity is provided by a largely available $500 million revolving
credit facility set to expire 2028. Quarterly maintenance
covenants for the revolving credit facility and Term Loan A are
expected to include a maximum total net leverage ratio and a
minimum interest coverage ratio. Moody's expects the company to
maintain ample headroom in complying with those requirements. The
Term Loan B is not expected to have financial maintenance
covenants.
The following are some of the preliminary terms in the marketing
term sheet that are subject to change during syndication. As
proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity shall not exceed the sum of A) the
greater of $400 million and 75% of consolidated EBITDA, plus B) the
amount of certain voluntary prepayments, open market purchases and
voluntary commitment reductions, and C) an unlimited amount subject
to 1.50x Secured Net Leverage Ratio (with $350 million cash netting
cap) (if pari passu secured).
No portion of the incremental may be incurred with an earlier
maturity than the initial term loans.
The credit agreement permits the transfer of assets to unrestricted
subsidiaries, up to the carve-out capacities, subject to "blocker"
provisions which prohibit (i) the designation of a restricted
subsidiary as an unrestricted subsidiary if at the time of the
designation it owns any intellectual property that is material to
the company and its subsidiaries, taken as a whole, and (ii) the
transfer of material intellectual property to an unrestricted
subsidiary.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees subject to
protective provisions, which prohibit guarantee releases if such
transfers (i) are made to an affiliate of the company or (ii) are
entered into primarily for the purpose of such subsidiary ceasing
to constitute a guarantor.
The credit agreement provides some limitations on up-tiering
transactions, including the requirement that 100% of the lenders
consent to (i) the subordination of, or any amendment that would
have the effect of subordinating, the obligations to any other
indebtedness or other obligation, and (vi) the subordination of, or
any amendment that would have the effect of subordinating, the lien
securing the obligations to any lien securing debt for borrowed
money other indebtedness or other obligation (other than as
permitted under the facilities documentation).
The proposed terms and the final terms of the credit agreement may
be materially different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with debt-to-EBITDA trending towards
2x, an EBITA margin in the low-teens and free cash flow-to-debt
approaching 15%. Movement to a capital structure that ensures
maximum flexibility would also be necessary for an upgrade.
Acceleration in new business awards for alternative fuels and a
path towards near-to-intermediate term profitability on these
platforms could also result in positive rating action.
The ratings could be downgraded due to an inability to generate at
least low-single digit organic revenue growth given the
acceleration of electric vehicle production targets or indications
of an aggressive financial policy such as large, debt financed
acquisitions versus bolt-on additions. An EBITA margin sustained
below 9%, debt-to-EBITDA approaching 3x, EBITA-to-interest falling
below 3.5x or deteriorating liquidity, including increased reliance
on the revolving credit facility, could also lead to negative
rating action.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
PHINIA Inc., through its Fuel Systems and Aftermarket segments, is
a global provider of combustion and hybrid propulsion technologies
for OEM and aftermarket customers in the light, commercial and
industrial vehicle markets. Competitive strengths stem from a
portfolio of advanced technologies that reduce emissions and
improve fuel economy, a history of proven innovation and strong
customer relationships. Revenue for the twelve months ended March
31, 2023 was approximately $3.3 billion.
PHUNWARE INC: Incurs $4.3 Million Net Loss in First Quarter
-----------------------------------------------------------
Phunware, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $4.27 million on $4.75 million of net revenues for the three
months ended March 31, 2023, compared to a net loss of $14.92
million on $6.78 million of net revenues for the three months ended
March 31, 2022.
As of March 31, 2023, the Company had $45.46 million in total
assets, $23.55 million in total liabilities, and $21.90 million in
total stockholders' equity.
"We have a history of net losses since our inception. For the
three months ended March 31, 2023, we incurred a net loss of
$4,269,000 used $7,382,000 in cash for operations and have a
working capital deficiency. The foregoing conditions raise
substantial doubt about our ability to meet our financial
obligations as they become due.
"Despite a history of successfully implementing similar plans,
these sources of working capital are not currently assured, and
consequently do not sufficiently mitigate the risks and
uncertainties disclosed above. There can be no assurance that we
will be able to obtain additional funding on satisfactory terms or
at all. In addition, no assurance can be given that any such
financing, if obtained, will be adequate to meet our capital needs
and support our growth. If additional funding cannot be obtained
on a timely basis and on satisfactory terms, our operations would
be materially negatively impacted. We have therefore concluded
there is substantial doubt about our ability to continue as a going
concern through one year from the issuance of these financial
statements."
Management Commentary
"This past quarter we expanded our breadth of reach and depth of
engagement with major brands for our market-leading Location Based
Platform," said Russ Buyse, CEO of Phunware. "We are thrilled to
add Siemens as a channel partner through their Siemens Connect
Ecosystem. Partners like Siemens are a prime example of the types
of relationships we intend to forge and will be a key accelerator
for bookings on our Platform in 2023 and beyond. I'm also
encouraged by the progress made by major brands moving deeper
through our sales pipeline. At the same time, our product team
made huge strides in realizing our vision for Contextual Engagement
on our Platform. Phunware gives brands the tools and reach to
enhance the consumer experience, increase customer satisfaction and
provide a strong return on investment. Looking ahead, we intend to
continue ramping our go-to-market efforts to capture as much market
share as possible."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1665300/000162828023017868/phun-20230331.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 $50.89 million for the year ended
Dec. 31, 2022, compared to a net loss of $53.52 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$54.83 million in total assets, $29.95 million in total
liabilities, and $24.88 million in total stockholders' equity.
Houston, Texas-based Marcum LLP, Phunware Inc.'s auditor since
2018, issued a "going concern" qualification in its report dated
March 31, 2023, citing that the Company has a significant working
capital deficiency, 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.
PLASKOLITE PPC: S&P Downgrades ICR to 'B-', On Watch Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Plaskolite
PPC Intermediate II LLC to 'B-' from 'B' and its issue-level rating
on its first-lien term loan to 'B-' from 'B'. S&P also placed all
its ratings on CreditWatch with negative implications.
The '3' recovery rating on the first-lien term loan is unchanged.
The CreditWatch listing reflects the likelihood of a downgrade if
the company were unable to successfully address the December
maturity date within the next 90 days.
S&P said, "We could downgrade Plaskolite if, within the next three
months, it were unable to successfully address its RCF's December
2023 maturity. The company's $100 million RCF ($34 million drawn at
the end of the first quarter of 2023) is current and will mature at
the end of 2023. We believe there is heightened refinancing risk
given the company's deteriorating credit metrics, current volatile
market conditions, and rising interest rates. Plaskolite's
refinancing risk will increase rapidly as we approach six months
before the Dec. 14, 2023, maturity date, which, if the company does
not successfully complete a refinancing, can further affect our
ratings. While the revolving credit facility represents a smaller
portion of the overall capital structure, we believe the company
still relies on this facility for liquidity to partly fund
operating needs.
"The downgrade reflects the company's elevated debt leverage and
our expectation for elevated debt leverage at the end of 2023 and
forecast in 2024. Increasing recession fears amid slowing economic
activity in the U.S. and Europe and continued geopolitical tensions
in Europe will likely keep Plaskolite's S&P Global Ratings-adjusted
debt leverage elevated and demand for its products below historical
levels. Plaskolite's revenue is sensitive to the broader economy
and S&P Global economists forecast a mild recession in 2023, before
measured growth in 2024. Consequently, we expect debt leverage to
remain above 8x in 2023 and 2024, even after incorporating
full-year contributions from recent acquisitions to bolster
capabilities in the company's traditional, higher-margin products.
Our forecast also incorporates a drop-off in earnings following the
growth the company experienced during the height of the COVID-19
pandemic. Further, we believe there to be execution risks in
expanding EBITDA while the company experiences
weaker-than-anticipated demand and increased pricing pressures as
economic activity slows."
Plaskolite has completed four acquisitions (three cash funded) in
the past two years, increasing its geographic footprint, as well as
strengthening its product offerings. Incorporating these
acquisitions, we expect expansion in the company's overall EBITDA
and improvements in its S&P Global Rating-adjusted-debt leverage
when demand for the company's products and solutions returns to
more normal levels, assumed in 2025.
CreditWatch
The CreditWatch listing reflects the potential for further ratings
downside if Plaskolite is unable to successfully address its RCF
maturity within the next 90 days. S&P expects to resolve the
CreditWatch upon disclosure of refinancing or extension terms
related to maturity, pricing, financial covenants, other terms and
conditions, and the overall size of the facility going forward. Our
resolution will also incorporate a forward view on the impact of
interest rates on free cash flow, particularly in the context of
the recent acquisitions and its impact on future operating trends
and debt leverage.
ESG credit indicators: E-2, S-2, G-3
PRECIPIO INC: Incurs $3 Million Net Loss in First Quarter
---------------------------------------------------------
Precipio, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.03 million on $2.82 million of net sales for the three months
ended March 31, 2023, compared to a net loss of $4.58 million on
$2.45 million of net sales for the three months ended March 31,
2022.
As of March 31, 2023, the Company had $19.42 million in total
assets, $5.20 million in total liabilities, and $14.22 million in
total stockholders' equity.
The Company has incurred substantial operating losses and has used
cash in its operating activities for the past several years. For
the three months ended March 31, 2023, the Company had a net cash
used in operating activities of $1.6 million. As of March 31,
2023, the Company had an accumulated deficit of $95.3 million and a
negative working capital of $0.5 million.
Precipio said, "The Company's ability to continue as a going
concern over the next twelve months from the date of issuance of
these condensed consolidated financial statements in this Quarterly
Report on Form 10-Q is dependent upon a combination of achieving
its
business plan, including generating additional revenue and avoiding
potential business disruption due to the novel coronavirus
("COVID-19") pandemic, and raising additional financing to meet its
debt obligations and paying liabilities arising from normal
business operations when they come due."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1043961/000155837023009597/prpo-20230331x10q.htm
About Precipio
Omaha, Nebraska-based Precipio, Inc., formerly known as
Transgenomic, Inc. -- http://www.precipiodx.com-- is a healthcare
solutions company focused on cancer diagnostics. Its business
mission is to address the pervasive problem of cancer misdiagnoses
by developing solutions to mitigate the root causes of this problem
in the form of diagnostic products, reagents and services.
Precipio reported a net loss of $12.18 million in 2022, a net loss
of $8.52 million in 2021. As of Dec. 31, 2022, the Company had
$21.50 million in total assets, $5.14 million in total liabilities,
and $16.37 million in total stockholders' equity.
New Haven, CT-based Marcum LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
30, 2023, 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.
PSG MORTGAGE: Seeks to Hire Belvedere Legal as Counsel
------------------------------------------------------
PSG Mortgage Lending Corp. seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to employ Belvedere
Legal as counsel.
The firm's services include:
a. advising and representing the Debtor in all matters and
proceedings within this Chapter 11 case other than those particular
areas that may be assigned to special counsel;
b. assisting the Debtor in any manner relevant to a review of
its debts, obligations, maximization of its assets and, where
appropriate, disposition thereof;
c. assisting the Debtor in the operation, reorganization or
liquidation of its business, if appropriate;
d. assisting the Debtor in the performance of its duties and
powers under the Bankruptcy Code and Bankruptcy Rules; and
e. assisting the Debtor in dealing with its creditors and
other constituencies, analyzing the claims in this case and
formulating and seeking approval of a Chapter 11 plan of
reorganization.
Belvedere will be paid at the rate of $595 per hour and will be
reimbursed for out-of-pocket expenses incurred.
The firm received an advanced retainer in the amount of $30,000.
Matthew Metzger, Esq., a partner at Belvedere, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Matthew D. Metzger, Esq.
Belvedere Legal
1777 Borel Place, Suite 314,
San Mateo, CA 94402
Tel: (415) 513-5980
Fax: (415) 513-5985
Email: info@belvederelegal.com
About PSG Mortgage Lending Corp
PSG Mortgage Lending Corp., in Irvine, Calif., filed its voluntary
petition for Chapter 11 protection (Bankr. N.D. Calif. Case No.
23-30281) on May 3, 2023, with as much as $10 million to $50
million in both assets and liabilities. Philip Fusco, chief
executive
officer, signed the petition.
Judge Dennis Montali oversees the case.
Matthew D. Metzger, Esq., at Belvedere Legal serves as the Debtor's
bankruptcy counsel.
QUEST PATENT: Incurs $939K Net Loss in First Quarter
----------------------------------------------------
Quest Patent Research Corporation has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $939,365 on $202,500 of revenues for the three months
ended March 31, 2023, compared to a net loss of $162,640 on
$122,000 of revenues for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $4.42 million in total
assets, $13.90 million in total liabilities, and a total
stockholders' deficit of $9.48 million.
Quest Patent said, "The Company has an accumulated deficit of
approximately $27,129,000 and negative working capital of
approximately $13,552,000 as of March 31, 2023. Because of the
Company's continuing losses, its working capital deficiency, the
uncertainty of future revenue, the Company's obligations to
Intelligent Partners, and QPRC Finance LLC ("QFL"), the Company's
low stock price and the absence of an active trading market in its
common stock, the ability of the Company to raise funds in the
equity market or from lenders is severely impaired. These
conditions, together with the effects of the COVID-19 pandemic and
the steps taken by the states to slow the spread of the virus and
its continuing effect on its business as well as any adverse
consequences which would result from our failure to meet the
continued listing requirements of the OTCQB...raise substantial
doubt as to the Company's ability to continue as a going concern.
The Company's revenue is generated exclusively from license fees
generated from litigation seeking damages for infringement of the
Company's intellectual property rights. Although the Company may
seek to raise funds and to obtain third-party funding for
litigation to enforce its intellectual property rights, the
availability of such funds is uncertain."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/824416/000121390023039835/f10q0323_questpatent.htm
About Quest Patent
Rye, New York-based Quest Patent Research Corporation --
http://www.qprc.com-- is an intellectual property asset management
company. The Company's principal operations include the
development, acquisition, licensing and enforcement of intellectual
property rights that are either owned or controlled by the Company
or one of its wholly owned subsidiaries. The Company currently
owns, controls or manages eleven intellectual property portfolios,
which principally consist of patent rights.
Quest Patent reported a net loss of $753,516 for the year ended
Dec. 31, 2022, compared to a net loss of $4.15 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $1.23
million in total assets, $9.79 million in total liabilities, and a
total stockholders' deficit of $8.56 million.
Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the
Company's auditor since 2021, issued a "going concern"
qualification in its report dated March 31, 2023, 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.
RENNOVA HEALTH: Posts $805,560 Net Income in First Quarter
----------------------------------------------------------
Rennova Health, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $805,560 on $4.91 million of net revenues for the three months
ended March 31, 2023, compared to a net loss of $2.27 million on
$1.14 million of net revenues for the three months ended March 31,
2022.
As of March 31, 2023, the Company had $20.57 million in total
assets, $48.86 million in total liabilities, and a total
stockholders' deficit of $28.29 million.
Rennova said, "At March 31, 2023, the Company had a working capital
deficit and a stockholders’ deficit of $42.2 million and $28.3
million, respectively. While we generated $0.8 million of income
in the three months ended March 31, 2023, we incurred losses of
$2.3 million and $3.3 million in the three months ended March 31,
2022 and the year ended December 31, 2022, respectively. As of the
date of this report, our cash is deficient and payments for our
operations in the ordinary course are not being made. The losses
in prior periods and other related factors, including past due
accounts payable and payroll taxes, as well as payment defaults
under the terms of outstanding notes payable and debentures, raise
substantial doubt about the Company's ability to continue as a
going concern for 12 months from the filing date of this report."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/931059/000149315223017256/form10-q.htm
About Rennova Health
Rennova Health, Inc. -- http://www.rennovahealth.com-- is a
provider of health care services. The Company owns one operating
hospital in Oneida, Tennessee, a hospital located in Jamestown,
Tennessee that it plans to reopen and operate and a rural health
clinic in Kentucky. The Company's operations consist of only one
segment.
Rennova Health reported a net loss available to common stockholders
of $334.17 million for the year ended Dec. 31, 2022, compared to a
net loss available to common stockholders of $500.87 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$20.57 million in total assets, $49.67 million in total
liabilities, and a total stockholders' deficit of $29.09 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated April 17, 2023, citing that the Company has recognized
recurring losses and negative cash flows from operations. This
raises substantial doubt about the Company's ability to continue as
a going concern.
RESHAPE LIFESCIENCES: Incurs $2.7 Million Net Loss in First Quarter
-------------------------------------------------------------------
Reshape Lifesciences Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $2.66 million on $2.28 million of revenue for the three
months ended March 31, 2023, compared to a net loss of $8.11
million on $2.44 million of revenue for the three months ended
March 31, 2022.
As of March 31, 2023, the Company had $16.35 million in total
assets, $8.59 million in total liabilities, and $7.76 million in
total stockholders' equity.
Reshape said, "The Company currently does not generate revenue
sufficient to offset operating costs and anticipates such
shortfalls to continue as the Company has modified its strategy to
a metrics-driven approach through a sustainable and scalable
business model, via a digital lead generation and re-engagement
strategy. As of March 31, 2023, the Company had net working
capital of approximately $7.6 million, primarily due to cash and
cash equivalents and restricted cash of $9.1 million, and $2.1
million of accounts receivable. On February 8, 2023, the Company
completed a public offering, which the Company received
approximately $9.4 million in cash and cash equivalents after
deducting underwriting expenses, commissions and offering expenses.
Based on its available cash resources, the Company may not have
sufficient cash on hand to fund its current operations for more
than twelve months from the date of filing this Quarterly Report on
Form 10-Q. This condition raises substantial doubt about the
Company's 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/1427570/000155837023009920/rsls-20230331x10q.htm
About ReShape Lifesciences
ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight
loss and metabolic health-solutions company, offering an integrated
portfolio of proven products and services that manage and treat
obesity and metabolic disease.
Reshape Lifesciences reported a net loss of $46.21 million for the
year ended Dec. 31, 2022, compared to a net loss of $63.15 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $11.14 million in total assets, $7.48 million in total
liabilities, and $3.66 million in total stockholders' equity.
Irvine, California-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has suffered recurring
losses and negative cash flows. The Company currently does not
generate revenue sufficient to offset operating costs and
anticipates such shortfalls to continue. This raises substantial
doubt about the Company's ability to continue as a going concern.
ROOSEVELT INN: Unsecureds Owed $43K to Get 95% in Plan
------------------------------------------------------
Roosevelt Inn, LLC, and Roosevelt Motor Inn, Inc., submitted a
Second Amended Disclosure Statement with respect to the Second
Amended Joint Plan of Reorganization.
Since the commencement of the Chapter 11 cases, the Debtors have
advocated for a global resolution of the Tort Claims and the
insurance coverage disputes. Without a determination of the extent
of insurance coverage available to the Debtors to fund a defense of
the Tort Claims, and should the holders of Tort Claims prevail,
indemnification coverage available for any awards entered in favor
of the holders of Tort Claims, it is cost prohibitive for the
Debtors to address the 15 Tort Claims on a case-by-case basis
without jeopardizing their limited assets and their ability to
continue to operate their hotel. The prior efforts to mediate a
global resolution among the Debtors, the holders of Tort Claims and
the Insurance Companies did not result in a settlement. After the
global mediation was suspended, negotiations continued between the
Debtors and the holders of Tort Claims which has resulted in a
settlement embodied in the Plan.
The comprehensive settlement embodied in the Plan (the
"Settlement") provides the mechanism by which the universe of Tort
Claims shall be permanently resolved, released and enjoined. The
Settlement is explained in more detail in Article IV.H.2 herein. In
summary the Tort Claims include and are treated as follows:
(A) Direct Tort Claims: means a Tort Claim that is not an
Indirect Tort Related Claim. For the avoidance of doubt, Direct
Tort Claims include the fifteen (15) Proofs of Claim filed with the
Bankruptcy Court before the Bar Date for Tort Claims by each of the
following Direct Tort Claimants: A.H., B.H., C.A., K.R., M.B.,
B.S., D.P., D.W., E.B., J.H., L.E., S.M., S.W., T.H., and T.S. and
shall be (a) permanently channeled to the Settlement Trust and
administered in accordance with the Trust Distribution Procedures
in full satisfaction and release of any and all such Tort Claims
against the Released Parties, and (b) permanently enjoined and
released against the Released Parties pursuant to the Injunctions
and Releases set forth in the Plan and the Plan Support Agreement.
The process to establish allowance and valuation of these Direct
Tort Claims is summarized herein and fully set forth in the Trust
Distribution Procedures.
(B) Indirect Tort Related Claims: means a liquidated or
unliquidated claim for contribution, indemnity, subrogation, or
reimbursement whether contractual or implied by law (as those terms
are defined by applicable non-bankruptcy law of the relevant
jurisdiction), and any other derivative Tort Claim of any kind
whatsoever whether in the nature of or sounding in contract, tort,
warranty or any other theory of law or equity whatsoever, including
any indemnification, reimbursement, hold-harmless or other payment
obligation provided for under any prepetition insurance policy or
contract; provided, however, that any retrospective premiums,
deductibles, and self-insured retentions arising out of any Tort
Claims under the Tort Insurance Policies shall not constitute an
Indirect Tort Related Claim and shall be treated in accordance with
Article IV.D.1 of the Plan. These Indirect Tort Related Claims
shall be (a) permanently channeled to the Settlement Trust and
administered in accordance with the Trust Distribution Procedures
in full satisfaction and release of any and all such Indirect Tort
Related Claims, and (b) permanently enjoined and released against
the Released Parties pursuant to the Injunctions and Releases set
forth in the Plan. The process to establish allowance and valuation
of these Indirect Tort Related Claims is summarized below and fully
set forth in the Trust Distribution Procedures.
The Released Parties means, collectively, the following Persons, in
each case in its or their respective capacities as such: (a) the
Debtors; (b) the Reorganized RI; (c) the Reorganized RMI; (d) UFVS;
(e) Patel; (f) the Equity Security Holders; (g) any Settling
Insurance Company, and (h) all of such Persons' Representatives,
provided, however, that Alpha Centurion is not a Released Party.
To effectuate the foregoing Plan, the Plan and Plan Support
Agreement provide for contributions from the Released Parties and
Reorganized Debtors (as set forth in Article V.B of the Plan and
Section 1 of the Plan Support Agreement) for, inter alia, the
establishment of (a) the Settlement Trust for the payment and
satisfaction of the Tort Claims, (b) the Professional Fee Reserve
for the payment and satisfaction of the Allowed Professional Fee
Claims, (c) the GUC Fund for the payment and satisfaction of the
Allowed General Unsecured Claims, and (d) payment of and
satisfaction of any other Allowed Claims in accordance with the
provisions of the Plan. The Plan proponents will seek to confirm
the Plan pursuant to section 105(a) and other sections of the
Bankruptcy Code to consummate the comprehensive Settlement embodied
herein, including through the Settlement Trust. The Plan proponents
will only seek confirmation of the Plan if the Holders of Direct
Tort Claims (Class 5) vote to accept the Plan in accordance with
section 1126(c) of the Bankruptcy Code, and notwithstanding the
Plan proponents' rights under section 1129(a) and 1129(b) of the
Bankruptcy Code, the Plan proponents will not seek confirmation of
the Plan if the Holders of Tort Claims (Class 5) vote to reject the
Plan in accordance with section 1126(c) of the Bankruptcy Code.
Section 105(a) of the Bankruptcy Code and other sections of the
Bankruptcy Code authorize the Bankruptcy Court to enter a
"channeling injunction" pursuant to which the Tort Claims are
forever channeled to the Settlement Trust. Following the issuance
of the Channeling Injunction in accordance with the Confirmation
Order, any and all Holders of Tort Claims shall be permanently
enjoined from seeking satisfaction of their Tort Claims against the
Debtors or any other Released Party or the property of any such
Released Party. The contributions of the Released Parties, directly
or indirectly, to the Settlement are expressly conditioned upon
entry of the Confirmation Order approving the Channeling Injunction
and the Plan Support Agreement, and confirming the Plan.
Generally, the features of the Plan provide that on the Effective
Date, as follows:
* The Reorganized Debtors will contribute to the Settlement
Trust (a) the amount of $1,587,500; (b) the Insurance Assignment,
and (c) the Settlement Trust Causes of Action. Thereafter, the
Settlement Trust shall fund distributions on account of and satisfy
compensable Tort Claims in accordance with the Trust Distribution
Procedures from the Settlement Trust Assets;
* The Equity Security Holders will make a cash contribution of
$1,100,000 to the Reorganized Debtors in consideration of the
Channeling Injunction and Releases being provided under the Plan;
.* UFVS Management Company, LLC ("UFVS") will make a cash
contribution of $30,000 to the Reorganized Debtors in consideration
of the Channeling Injunction and Releases being provided under the
Plan;
* Yagna Patel ("Patel") will make a cash contribution of $10,000
to the Reorganized Debtors in consideration of the Channeling
Injunction and Releases being provided under the Plan.
* The Reorganized Debtors will procure Exit Financing from the
Exit Lender in an amount no less than $2,100,000.00, to pay the
balance of $447,500.00 on account of the Settlement Amount and to
pay the Reorganized Debtors' other obligations due under the Plan;
and • The Reorganized Debtors shall fund the Professional Fee
Reserve, the GUC Fund, and make the other Distributions on account
of the Allowed Class 1 and Allowed Class 2 Claims.
Within 2 Business Days of the Effective Date, the Reorganized RI
shall file a notice of occurrence of the Effective Date,
identifying the Effective Date and that it has occurred.
After the Effective Date, the general features of the Plan provide
for distributions as follows:
* the Reorganized Debtors shall fund Distributions on account of
holders of Allowed Class 1 Claims (Secured Claims) and Allowed
Class 2 (Priority Non-Tax Claims) which are estimated to be paid in
full;
* the Reorganized Debtors shall fund Distributions on account of
and satisfy Allowed Class 3 (General Unsecured Claims) exclusively
from the GUC Fund with an estimated recovery of 95%;
* holders of Allowed Class 4 Claims (Non-Tort Litigation Claims)
will be paid in accordance with the terms of the Plan and
Confirmation Order;
* the Reorganized Debtors shall fund Distributions on account of
and satisfy all other Allowed Claims with Cash on hand on or after
the Effective Date in accordance with the terms of the Plan and the
Confirmation Order; and
* As set forth above, the Settlement Trust shall fund
distributions on account of and satisfy compensable Tort Claims
(holders of Allowed Class 5 (Direct Tort Claims) and holders of
Allowed Class 6 (Indirect Tort Claims) in accordance with the Trust
Distribution Procedures from the Settlement Trust Assets.
Under the Plan, Class 3 General Unsecured Claims total $43,000.
Each holder of an Allowed General Unsecured Claim shall receive its
Pro Rata Share of the GUC Fund up to the full amount of such
Allowed General Unsecured Claim. Creditors will recover 95% of
their claims. Class 3 is impaired.
Distributions under the Plan shall be funded from the following
sources:
* the Reorganized Debtors shall fund (a) the Professional Fee
Reserve on account of and satisfy Allowed Professional Fee Claims,
(b) the Settlement Trust Contribution and (c) the GUC Fund, from
the proceeds of any or all of the following sources: (i) the Exit
Financing, (ii) the Equity Security Holders Contribution, (iii) the
UFVS Contribution, (iv) the Patel Contribution, and (v) Cash on
hand on or after the Effective Date in accordance with the terms of
the Plan and Confirmation Order;
* the Reorganized Debtors shall fund Distributions on account of
and satisfy Allowed General Unsecured Claims exclusively from the
GUC Fund;
* the Settlement Trust shall fund distributions on account of
and satisfy compensable Tort Claims (holders of Allowed Class 5
(Direct Tort Claims) and holders of Allowed Class 6 (Indirect Tort
Claims)) in accordance with the Trust Distribution Procedures from
the Settlement Trust Assets; and
* the Reorganized Debtors shall fund Distributions on account of
and satisfy all other Allowed Claims with Cash on hand on or after
the Effective Date in accordance with the terms of the Plan and the
Confirmation Order.
Attorneys for the Debtors:
Aris J. Karalis, Esq.
Robert W. Seitzer, Esq.
Robert M. Greenbaum, Esq.
KARALIS PC
1900 Spruce Street
Philadelphia, PA 19103
Tel: (215) 546-4500
A copy of the Disclosure Statement dated May 10, 2023, is available
at https://bit.ly/3O3Pjw9 from PacerMonitor.com.
About Roosevelt Inn
Roosevelt Inn, LLC is a Philadelphia-based company that operates in
the traveler accommodation industry.
Roosevelt Inn and its affiliate, Roosevelt Motor Inn, Inc., filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Pa. Lead Case No. 21-11697) on June 16, 2021,
listing as much as $10 million in both assets and liabilities.
Anthony Uzzo, manager, signed the petitions.
Judge Ashely M. Chan presides over the cases.
The Debtors tapped Karalis, PC as bankruptcy counsel; Asterion,
Inc. as financial advisor; A. Uzzo & Company, CPA's PC as
bookkeeper; and Blank Rome, LLP and Reed Smith, LLP as special
counsel.
ROYALE ENERGY: Incurs $146K Net Loss in 2022
--------------------------------------------
Royale Energy, Inc. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$145,594 on $2.64 million of total revenues for the year ended Dec.
31, 2022, compared to a net loss of $3.60 million on $1.72 million
of total revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $11.78 million in total
assets, $21.30 million in total liabilities, $23.61 million in
mezzanine equity, and a total stockholders' deficit of $33.14
million.
Ridgeland, Mississippi-based HORNE LLP, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
May 19, 2023, citing that the Company has suffered recurring losses
from operations and its total liabilities exceed its total assets.
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/ix?doc=/Archives/edgar/data/1694617/000118518523000564/royaleinc20221231_10k.htm
About Royale
El Cajon, CA-based Royale Energy, Inc. -- http://www.royl.com-- is
an independent oil and natural gas producer. Royale's principal
lines of business are the production and sale of oil and natural
gas, acquisition of oil and gas lease interests and proved
reserves, drilling of both exploratory and development wells, and
sales of fractional working interests in wells to be drilled by
Royale. Since 1993, Royale has primarily acquired and developed
producing and non-producing natural gas properties in California.
In December 2018, Royale became the operator of a newly acquired
field in Texas. The most significant factors affecting the results
of operations are (i) changes in oil and natural gas prices,
production levels and reserves, (ii) turnkey drilling activities,
and (iii) the increase in future cost associated with abandonment
of wells.
SAN JORGE CHILDREN'S: Plan Filing Deadline Extended to May 31
-------------------------------------------------------------
San Jorge Children's Hospital, Inc., filed a motion seeking a
21-day extension of the May 10, 2023 deadline to file a Disclosure
Statement and Plan of Reorganization. At the behest of the Debtor,
the Court has extended the deadline to May 31, 2023.
In seeking an extension, the Debtor has said it has identified what
appears to be the best offer received at the moment. As such,
efforts are being focused on advancing the development of a
conditional asset purchase agreement ("CAPA") and bidding
procedures that are intended to be submitted to the Court and
parties in interest. Also, the Debtor is significantly advanced in
the drafts of the Disclosure Statement and the Plan of
Reorganization.
However, the Debtor is still gathering relevant information and
making critical investigations related to the assets of the estate
and the means for reorganization. Completing this ongoing analysis
will allow the Debtor to fully disclose matters related to the
estate, and how that translates to the reorganization strategy and
treatment to be proposed to each creditor.
On the same token, although the draft of the CAPA is also in an
advance stage, critical details, attachment and components of the
intended transaction are still being reviewed, analyzed and
negotiated.
In sum, additional time is required to complete these tasks and
steer the case towards the intended filing, settlement and
confirmation.
Meanwhile, and parallel to the efforts detailed above, the debtor
continues conversations with its secured creditor and unsecured
creditors committee about these matters and all other required to
preserve the operations of the debtor uninterrupted.
Further, the Debtor continues to entertain additional interested
parties in the potential acquisition of debtor's assets and
operations. In the event that such efforts lead a public bidding,
debtor will move the Court accordingly, aiming to acquire the best
outcome for the debtor and parties in interest.
Attorney for the Debtor:
Wigberto Lugo Mender, Esq.
Alexis A. Betancourt Vincenty, Esq.
Lugo Mender Group, LLC
100 Carr 165 Suite 501
Guaynabo, P.R. 00968-8052
Tel: (787) 707-0404
Fax: (787) 707-0412
E-mail: wlugo@lugomender.com
a_betancourt@lugomender.com
About San Jorge Children's Hospital
San Jorge Children's Hospital, Inc. operates a hospital
specializing in pediatrics in San Juan, P.R.
San Jorge Children's Hospital filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case
No. 22-02630) on Sept. 1, 2022, with between $10 million and $50
million in both assets and liabilities. Edward P. Smith, chief
operating officer, signed the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group,
LLC as bankruptcy counsel and Galindez, LLC as external auditor.
Cardona Jimenez Law Offices, P.S.C. represents the official
committee of unsecured creditors appointed in the Debtor's case.
* * *
The Debtor's exclusive period to propose a Chapter 11 Plan expired
on March 21, 2023.
SIGYN THERAPEUTICS: Incurs $1.3 Million Net Loss in First Quarter
-----------------------------------------------------------------
Sigyn Therapeutics, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.34 million on $0 of net revenues for the three months ended
March 31, 2023, compared to a net loss of $678,046 on $0 of net
revenues for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $660,447 in total assets,
$3.01 million in total liabilities, and a total stockholders'
deficit of $2.35 million.
Sigyn said, "The Company had an accumulated deficit of $8,536,612
at March 31, 2023, had a working capital deficit of approximately
$2,420,960 at March 31, 2023, had net losses of $1,341,036 and
$678,046 for the three months ended March 31, 2023 and 2022,
respectively, and net cash used in operating activities of $562,573
and $459,571 for the three months ended March 31, 2023 and 2022,
respectively, with no revenue earned since inception, and a lack of
operational history. These matters raise substantial doubt about
the Company's ability to continue as a going concern.
"While the Company is attempting to expand operations and increase
revenues, the Company's cash position may not be significant enough
to support the Company's daily operations. Management intends to
raise additional funds by way of a public offering or an asset sale
transaction. Management believes that the actions presently being
taken to further implement its business plan and generate revenues
provide the opportunity for the Company to continue as a going
concern. While management believes in the viability of its
strategy to generate revenues and in its ability to raise
additional funds or transact an asset sale, there can be no
assurances to that effect or on terms acceptable to the Company.
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 revenues."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1642159/000149315223017569/form10-q.htm
About Sigyn
Sigyn Therapeutics, Inc. is a development-stage company focused on
the creation of therapeutic solutions that address unmet needs in
global health. Sigyn Therapy, the Company's lead product candidate,
is a broad-spectrum blood purification technology designed to treat
pathogen-associated inflammatory disorders that are not addressed
with approved drug therapies.
Sigyn Therapeutics reported a net loss of $2.93 million for the
year ended Dec. 31, 2022, compared to a net loss of $3 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$332,879 in total assets, $2.24 million in total liabilities, and a
total stockholders' deficit of $1.90 million.
New York, NY-based Kreit & Chiu CPA LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 31, 2023, citing that the Company has suffered
recurring losses from operations, has a net capital deficiency, and
negative cash flows from operating activities, therefore, the
Company has stated that substantial doubt exists about its ability
to continue as a going concern.
SINTX TECHNOLOGIES: Incurs $293K Net Loss in First Quarter
----------------------------------------------------------
SINTX Technologies, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $293,000 on $539,000 of total revenue for the three months ended
March 31, 2023, compared to a net loss of $2.84 million on $129,000
of total revenue for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $22.65 million in total
assets, $6.71 million in total liabilities, and $15.94 million in
total stockholders' equity.
SINTX said, "To date, the Company's operations have been
principally financed from proceeds from the issuance of preferred
and common stock and, to a lesser extent, cash generated from
product sales. It is anticipated that the Company will continue to
generate operating losses and use cash in operating activities.
The Company's continuation as a going concern is dependent upon its
ability to increase sales, and/or raise additional funds through
the capital markets. Whether and when the Company can attain
profitability and positive cash flows from operations or obtain
additional financing is uncertain."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1269026/000149315223017158/form10-q.htm
About SINTX Technologies
Headquartered in Salt Lake City, Utah, SINTX Technologies, Inc. --
https://ir.sintx.com -- is an advanced ceramics company that
develops and commercializes materials, components, and technologies
for medical and technical applications. SINTX is engaged in the
research, development, and manufacturing of silicon nitride, and
its products have been implanted in humans since 2008.
SINTX reported net loss of $12.04 million in 2022, a net loss of
$9.31 million in 2021, a net loss of $7.03 million in 2020, and a
net loss of $4.79 million in 2019. As of Dec. 31, 2022, the
Company had $15.77 million in total assets, $10.07 million in total
liabilities, and $5.70 million in total stockholders' equity.
SIO2 MEDICAL: U.S. Trustee Says Disclosures Inadequate
------------------------------------------------------
Andrew R. Vara, the United States Trustee for Region 3, filed its
objection to the SIO2 Medical Products, Inc., et al.'s Motion for
Approval of Disclosure Statement and Related Solicitation
Procedures.
The U.S. Trustee points out that the Debtors' proposed Disclosure
Statement should not be approved because it fails to provide
adequate and accurate disclosures and because the Debtors' Plan is
patently unconfirmable. The Debtors are unable to meet these
statutory requirements because they themselves do not know at this
early juncture in these cases what will occur with respect to the
estates' assets. Bids are not due until after the Disclosure
Statement hearing and after the proposed Plan vote deadline.
Investigations into possible causes of action and possible
challenges to at least portions of secured lender claims are still
in their infancy. These events may have a significant impact on
creditor recoveries, and they are not adequately explained in the
Disclosure Statement.
The U.S. Trustee further points out that the proposed Plan is also
patently unconfirmable due to the scope of the third-party
releases, the Debtor Releases and the parties receiving
exculpation. The Plan imposes non-consensual third-party releases
("Third-Party Releases") on numerous non-debtor parties, and a
related-parties clause expands the universe of those who will be
stripped of their claims against non-debtors by way of a labyrinth
of terms and definitions. The Disclosure Statement fails to provide
adequate information as to who is giving Third-Party Releases, who
will receive such releases, and what claims are being released.
There is also a myriad of parties being forced to grant Third-Party
Releases through application of the related-parties clause, the
vast majority of whom will not even receive an opt out form, or
notice, because they are not creditors or equity holders of the
Debtors. They include, by way of example, all current and former
employees of all creditors who are Releasing Parties, and all
current and former employees of all affiliates of all creditors who
are Releasing Parties. The opt-out mechanism in this case provides
nothing but an illusion of consent, and there is no basis in this
case for the approval of such non-consensual third-party releases
under the Bankruptcy Code.
The U.S. Trustee asserts that for these reasons, neither the
Disclosure Statement nor the Debtors' proposed Solicitation
Procedures should be approved, and the Motion should be denied.
About SiO2 Medical Products
SiO2 Medical Products, Inc. is a material life sciences company
that is at the precipice of mass-commercialization of its
breakthrough materials science technology that is poised to
revolutionize the pharmaceutical industry. Major pharmaceutical
players are testing the company's vials, syringes, tubes, and other
offerings, and the Company anticipates large-scale adoption in the
relative near term.
SiO2 Medical Products and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10366) on March 29, 2023. In the petition signed by its
chief executive officer, Yves Steffen, SiO2 Medical Products
disclosed $100 million to $500 million in assets and $500 million
to $1 billion in liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Kirkland Ellis, LLP and Kirkland & Ellis
International, LLP as general bankruptcy counsels; Cole Schotz P.C.
as local bankruptcy counsel; Alvarez & Marshal North America, LLC,
as financial and restructuring advisor; and Lazard as investment
banker. Donlin, Recano and Co., Inc., is the claims, noticing,
solicitation and administrative agent.
SKYVIEW ACADEMY: S&P Affirms 'BB' Rating on Charter School Bonds
----------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from stable and
affirmed its 'BB' long-term rating on the Colorado Educational &
Cultural Facilities Authority's series 2014 charter school revenue
and refunding bonds, supported by SkyView Building Corp. and issued
for SkyView Academy (SVA).
"The outlook revision to positive reflects our view that
improvements to enrollment and operating performance, as well as to
cash levels, if sustained or improved, would result in an upgrade,"
said S&P Global Ratings credit analyst Alexander Enriquez. The
improved outlook also reflects S&P's expectation that operating
performance will maintain improvements in fiscal years 2023 and
2024 through increases in per-pupil funding, and that SVA will
maintain a good relationship with its authorizer.
S&P said, "The positive outlook reflects our expectation that over
the one- to two-year outlook period, SVA will at least maintain
enrollment levels, providing the school opportunity to manage
operations in such a way that growth in maximum annual debt service
(MADS) coverage levels and liquidity could be sustained without the
injection of one-time funds.
"We could return the outlook to stable if enrollment decreases
significantly, operations produce deficits due to budgetary
pressures or additional debt, lease-adjusted MADS coverage weakens,
or days' cash on hand decreases significantly.
"We could raise the rating during the outlook period should days'
cash on hand increase while operations sustain themselves such that
MADS coverage remains above 1.5x. We would also expect to see
enrollment stay at least level."
SM ENERGY: S&P Raises ICR to 'BB-' on Debt Paydown, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Denver-based
oil and gas exploration and production company SM Energy Co. to
'BB-' from 'B+'.
S&P said, "At the same time, we affirmed our 'BB-' issue-level
rating on the company's unsecured debt. We also revised our
recovery rating to '3' from '2', indicating our expectation for
meaningful (50%-70%; rounded estimate: capped at 65%) recovery in
the event of a payment default.
"Our stable outlook reflects our view that SM Energy's credit
metrics will remain strong over the next two years, including funds
to operations (FFO) to debt of well over 100%, supported by our
expectation that the company will continue generating significant
discretionary cash flow (DCF) and maintain a disciplined capital
spending and shareholder returns framework.
"Our upgrade reflects the company's recent debt repayment and our
expectation of significant free cash flow and strong credit
measures over the next two years.
"SM Energy repaid about $551 million of its long-term debt in 2022,
bringing total debt to about $1.6 billion. Based on the debt
reduction and incorporating our current oil and natural gas price
deck assumptions, we now expect FFO to debt of well above 100%,
with debt to EBITDA below 1x over the next two years. At the same
time, we expect the company to generate positive DCF over the next
two years."
SM Energy's scale is comparable with its 'BB-' rated peers.
SM Energy ended 2022 with about 537.4 million barrels of oil
equivalent (mmboe) of proved reserves (about 59% developed, 38%
oil), which is in line with 'BB-' rated peers such as Matador
Resources and Chord Energy. In addition, the company's production
compares favorably with its peers, with daily production averaging
about 146,400 boe in the first quarter of 2023. S&P expects the
company's 2023 capital program of about $1.1 billion to be focused
on both Midland Basin (about 54% of total program) and South Texas
(about 36%), bringing daily production to about 146,000-147,000 boe
per day (43% oil).
The Austin Chalk development program continues to perform well.
Despite a history of mixed results in the play, the company's
development program in the Austin Chalk continues to perform well,
with 40 wells drilled since the beginning of 2022. SM Energy
brought online seven wells in the first quarter of 2023, with a
30-day average initial production of nearly 2,000 boe/d with 73%
liquids and benefited from its enhanced completion design. The
company expects to maintain a two-rig drilling program and one
completion crew, focused primarily on developing the Austin Chalk
formation. In addition, SM Energy's remaining Austin Chalk
inventory is nearly 400 locations.
Following its debt-reduction efforts, the company has turned its
focus to increasing shareholder rewards.
Announced in September 2022, the company's shareholder return
framework includes a fixed annual dividend of 60 cents per share
($70 million-$75 million in 2023) and share repurchase
authorization of up to $500 million through year-end 2024. The
company has returned about $134 million of capital to its
shareholders since the program's inception, inclusive of dividends
and stock repurchases. S&P expects the company to keep
distributions and share repurchases within cash flows over the next
two years.
S&P said, "Our stable outlook reflects our view that SM Energy's
credit metrics will remain strong over the next two years,
including FFO to debt of well over 100%, supported by our
expectation that the company will continue generating significant
DCF and maintain a disciplined capital spending and shareholder
returns framework.
"We could lower the rating if we expected the company's FFO to debt
to fall to below 60% on a sustained basis, which would most likely
follow a decline in commodity prices below our current assumptions
with no offsetting reduction to SM Energy's capital spending plans
or if the company pursued a more aggressive shareholder return
policy.
"We could upgrade SM Energy if it increased its scale to levels
more comparable with those of its higher-rated peers while
maintaining FFO to debt comfortably above 60% and generating
positive DCF."
ESG credit indicators: E-4, S-2, G-2
S&P said, "Environmental factors are a negative consideration in
our rating analysis on SM Energy as the exploration and production
industry contends with an accelerating energy transition and
adoption of renewable energy sources. We believe falling demand for
fossil fuels will lead to lower profitability and returns for the
industry as it fights to retain and regain investors that seek
higher return investments."
SNOW MASS: Case Summary & One Unsecured Creditor
------------------------------------------------
Debtor: Snow Mass Property, LLC
12090 Metro Parkway
Fort Myers, FL 33966
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-00575
Debtor's Counsel: Jonathan Bierfeld, Esq.
MARTIN LAW FIRM
3701 Del Prado Blvd. S.
Cape Coral, FL 33904
Email: jonathan.bierfeld@martinlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Al Mueller as managing member.
The Debtor lists Regions Bank as its sole unsecured creditor
holding an unknown amount of claim.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/UHAVG5A/Snow_Mass_Property_LLC__flmbke-23-00575__0001.0.pdf?mcid=tGE4TAMA
SP STAR: Debtor Has Failed to Comply with The Court's Order
-----------------------------------------------------------
LA Club Management, LLC, the holder of a general, unsecured Proof
of Claim in the amount of $671,932.21 ("LA Club Management"), filed
a second supplemental objection to confirmation of the SP Star
Enterprise, Inc.'s Proposed First Amended Chapter 11 Plan.
LA Club Management requests the Court deny confirmation of the
Debtor's First Amended Chapter 11 Plan.
LA Club Management points out that the Debtor Has Failed to Comply
with The Court's Order and File an Amended Plan By April 24, 2023.
At the prior, continued plan confirmation hearing on March 23,
2023, the Court ordered the Debtor to file an amended plan by April
24, 2023. The Debtor did not comply with the Court's Order and file
an amended plan.
LA Club Management asserts that the Debtor's Filed MORS Indicate
the Debtor Cannot Propose A Feasible Plan. The Debtor's most
recently filed MOR for the month of March, 2023 shows the Debtor
incurred a loss of $2,871.11. In the aggregate, the Debtor's filed
Monthly Operating Reports show that except for the month it filed
its bankruptcy petition and the month of February of 2023, the
Debtor has incurred a loss for every month it has been operating in
this Chapter 11 case. The Debtor's Monthly Operating Reports are
strong evidence the Debtor has not and cannot propose a feasible
plan of reorganization.
LA Club Management complains that the Debtor's First Amended Plan
Is Not Feasible on its Face:
* Exhibit 3 to the Debtor's First Amended Plan states a
"proposed, allowed amount" of zero for insider Makkar. Despite the
request of LA Club Management, the Debtor has failed to provide any
evidence Makkar agrees his alleged claim should be allowed in a
zero amount.
* Exhibit 4 to the Debtor's First Amended Plan at page 34 states
the Debtor's financial projections and includes a line for
"Projected Capital Contributions" of $4,500 to $7,000 per month.
The feasibility of the Plan rests on the financial wherewithal of
the alleged contributor to make these high monthly contributions
each month. Despite the requests of LA Club Management, the Debtor
has failed to provide the name of the alleged contributor and the
financial ability of the alleged contributor to make the very high
monthly payments required under the Plan.
* The Debtor's existing lease requires payments of $34,000 per
month, but the Plan provides for monthly lease payments in the
reduced amount of $30,000 per month. Despite the requests of LA
Club Management, the Debtor has failed to provide a written lease
showing reduced monthly lease payments of $30,000 per month instead
of $34,000 per month.
* The Debtor's Plan at Exhibit 4 states financial projections
through to the end of December of 2022 rather than financial
projections first grounded on recent financial data and then
projected through the life of the plan. As a result, Exhibit 4
attached to the Debtor's First Amended Plan has almost no
evidentiary, probative value.
Attorneys for Creditor LA Club Management, LLC:
Thomas H. Casey, Esq.
THE LAW OFFICES OF THOMAS H. CASEY, INC.
26400 La Alameda, Suite 210
Mission Viejo, CA 92691
Tel: (949) 766-8787
Fax: (949) 766-9896
E-mail: tomcasey@tomcaseylaw.com
- and -
Michael J. FitzGerald, Esq.
FITZGERALD KREDITOR BOLDUC RISBROUGH LLP
2 Park Plaza, Suite 850
Irvine, CA 92614
Telephone: (949) 788-8900
Facsimile: (949) 788-8980
E-mail: mfitzgerald@fkbrlegal.com
About SP Star Enterprise
Located in Los Angeles, California, Platinum Showgirls LA provides
an after-hours hangout with sexy dancers entertaining all night.
SP Star Enterprise Inc., doing business as Platinum Showgirls LA,
filed a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. Case No. 22-14502) on Aug. 18, 2022. In the
petition filed by Mohan S. Makkar, as president, the Debtor
disclosed at least $1 million in liabilities against assets of less
than $100,000.
Judge Deborah J. Saltzman oversees the case.
Gregory Kent Jones has been appointed as Subchapter V trustee.
The Debtor is represented by W. Derek May, Esq., at the Law Office
of W. Derek May.
SUN PACIFIC: Incurs $106K Net Loss in First Quarter
---------------------------------------------------
Sun Pacific Holding Corp has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $106,496 on $22,735 of revenues for the three months ended March
31, 2023, compared to a net loss of $41,023 on $98,452 of revenues
for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $139,380 in total assets,
$3.34 million in total liabilities, and a total stockholders'
deficit of $3.20 million.
For the three months ended March 31, 2023 and 2022, the Company
incurred losses from operations of $90,971 and $28,370,
respectively. The Company had a working capital deficit of
$3,227,085 as of March 31, 2023. The Company said these
circumstances raise substantial doubt about the Company's ability
to continue as a going concern.
Sun Pacific said, "The Company's ability to continue as a going
concern is dependent on its ability to raise the additional capital
to meet short and long-term operating requirements. Management is
continuing to pursue external financing alternatives to improve the
Company's working capital position however additional financing may
not be available upon acceptable terms, or at all. If the Company
is unable to obtain the necessary capital, the Company may have to
cease operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1343465/000149315223017426/form10-q.htm
About Sun Pacific
Headquartered in Manalapan NJ, Sun Pacific Holding Corp. --
http://www.sunpacificholding.com-- is a diversified publicly
traded holding company encompassing the following subsidiaries: Sun
Pacific Power Corp, Street Smart Outdoor Corp, and National
Mechanical Corp. Its focus is protecting the environment by
adapting new green technologies and developing synergy across its
subsidiaries.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated April 17, 2023, citing that the Company has suffered
recurring losses from operations since inception and has a
significant working capital deficiency, both of which raise
substantial doubt about its ability to continue as a going concern.
SUNRISE REAL: Delays Filing of March 31 Quarterly Report
--------------------------------------------------------
Sunrise Real Estate Group, Inc. filed a Form 12b-25 with the
Securities and Exchange Commission with respect to its Quarterly
Report on Form 10-Q for the period ended March 31, 2023. The
Company will be delayed in the filing of its 10-Q due to a delay in
the preparation of its financial statements.
The net revenue in the first quarter of 2023 was $5,733,763, which
decreased by 47% from $10,822,398 in the first quarter of 2022.
The decrease in net revenue in the first quarter of 2023 was mainly
due to less recognition of house sales revenue of the HATX project
in this quarter.
About Sunrise Real
The principal activities of Sunrise Real Estate Group, Inc. and its
subsidiaries offer real estate development and property brokerage
services, including real estate marketing services, property
leasing services; and property management services in the People's
Republic of China.
Sunrise Real Estate reported a net loss of $9.39 million for the
year ended Dec. 31, 2022, compared to net income of $46.28 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $274.09 million in total assets, $129.35 million in total
liabilities, and $144.74 million in total stockholders' equity.
TAAT INTERNATIONAL: Disposable Income to Fund Plan Payments
-----------------------------------------------------------
TAAT International LLC filed with the U.S. Bankruptcy Court for the
District of Nevada a Plan of Reorganization for Small Business
dated May 18, 2023.
The Debtor is a Nevada corporation that is wholly owned by TAAT
Global Alternatives, Inc. The purpose of Debtor's business is to
process and manufacture hemp material into sellable completed units
of inventory using the brand name TAAT for private label
customers.
Debtor intends to address its liabilities and obtain the necessary
relief in order to continue operating its business. As a result, on
February 17, 2023, Debtor filed a voluntary petition seeking relief
under Chapter 11 Subchapter V of the Bankruptcy Code. Under
Sections 1107(a) and 1108, Debtor has and continues to operate its
business.
The Plan proponent's financial projections show that the Debtor
will have projected disposable income of $35,455.
The final Plan payment is expected to be paid under this thirty
six-month Plan in November 2026 or such other date approved by the
Bankruptcy Court after notice and a hearing.
This Plan of Reorganization proposes to pay creditors of Debtor
from the surplus cash flow to be generated by TAAT during the
thirty-six-month life of the Plan.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately less than .1 cents on the dollar (assuming an
estimated $15,995,408.67 of allowed general unsecured claims, and
$35,455 total distribution to that class; provided, however, these
numbers may change given the final amount of Allowed general
unsecured claims and other factors and is only an estimate). This
Plan also provides for the payment of administrative and priority
claims.
Class 3 consists of non-priority unsecured creditors. After payment
of all unclassified claims and Class 1 and Class 2 claims, each
holder of an Allowed Class 3 unsecured claim shall participate pro
rata with each other holder of an Allowed unsecured claim and shall
receive, its pro rata share of quarterly disposable income of the
Debtor after payments of unclassified claims and Class 1 and Class
2 claims. Creditors in Class 3 are Impaired under this Plan.
Class 4 consists of Equity security holders of the Debtor. Except
to the extent that the Holders of Class 4 Equity Interests agree to
less favorable treatment, they shall retain their equity interests,
subject to the terms and conditions of this Plan. Interest holders
in Class 4 are Unimpaired under this Plan.
This Plan will be funded with the disposable income of the Debtor.
To the extent any claim is a secured claim, Debtor may surrender
collateral to the secured creditor, in Debtor's discretion.
A full-text copy of the Plan of Reorganization dated May 18, 2023
is available at bit.ly/45toFmo from PacerMonitor.com at no charge.
Counsel for the Debtor:
Ryan A. Andersen, Esq.
Valerie Y. Zaidenberg, Esq.
Andersen & Beede
3199 E Warm Springs Rd, Ste 400
Las Vegas, NV 89120
Tel: (702) 522-1992
Fax: (702) 825-2824
Email: ryan@aandblaw.com
valerie@aandblaw.com
About Taat International
TAAT International, LLC -- https://trytaat.com/ -- is a Las
Vegas-based company, which develops, manufactures and distributes
alternative products in categories such as tobacco and hemp.
TAAT International filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
23-10592) on Feb. 18, 2023, with $1 million to $10 million in
assets and $10 million to $50 million in liabilities. Edward Burr
has been appointed as Subchapter V trustee.
Judge August B. Landis oversees the case.
The Debtor is represented by Ryan A. Andersen, Esq., at Andersen &
Beede.
THB CONSTRUCTION: Unsecureds Will Get 10% of Claims in 36 Months
----------------------------------------------------------------
THB Construction, LLC, filed with the U.S. Bankruptcy Court for the
Northern District of Texas a Plan of Reorganization under
Subchapter V dated May 18, 2023.
The Debtor owns and operates a construction business. The Debtor
was unable to maintain operations without bankruptcy protection due
to the negative cash flow caused by payment of mounting debt
obligations and a state court receiver appointment, which
ultimately lead to the filing of this case.
The Debtor scheduled the following Assets owned as of the Petition
Date in the total amount of $2,289,372.88.
According to the Debtor's Schedules filed in this Case, the
Debtor's liabilities (excluding Administrative Expense Claims)
totaled $2,294,778.00 as of the Petition Date. The Debtor scheduled
total non-priority Unsecured Claims of $2,294,778.00.
Under this Plan, all Secured Creditors will receive payment of 100%
of their Allowed Claims, and Unsecured Creditors will receive 10%
of their Claims. Therefore, pursuant to the liquidation analysis
all Creditors will receive at least as much under this Plan as they
would in a Chapter 7 liquidation.
Class 5 consists of Allowed General Unsecured Claims. Class 5
Claimants shall be paid 10% of their Claims over 36 months from the
Effective Date, without interest. These Claims will be paid in
equal monthly installments commencing on the first day of the first
month following the Effective Date and continuing on the first day
of each month thereafter. These Claims are Impaired, and the
holders of these Claims are entitled to vote to accept or reject
the Plan.
Class 6 Equity Interests shall be retained.
The Debtor intends to make all payments required under the Plan
from available cash and income from the business operations of the
Debtor.
A full-text copy of the Plan of Reorganization dated May 18, 2023
is available at https://urlcurt.com/u?l=fpJV16 from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About THB Construction
THB Construction, LLC, operates in the residential building
construction industry. The company is based in Colleyville Texas.
THB Construction filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
23-40460) on Feb. 17, 2023, with $1 million to $10 million in both
assets and liabilities. James M. Boney, designated corporate
representative for THB Construction, signed the petition.
Judge Edward L. Morris oversees the case.
Joyce W. Lindauer Attorney, PLLC, is the Debtor's legal counsel.
TIGA ADVERTISING: Unsecureds Will Get 50.4% of Claims in 3 Years
----------------------------------------------------------------
Tiga Advertising, Inc., filed with the U.S. Bankruptcy Court for
the District of Colorado a Subchapter V Plan of Reorganization
dated May 18, 2023.
The Debtor sells ads to customers and those ads are placed
primarily in buses in ski resorts. The Debtor is located in Vail,
Colorado and owned 100% by Gregory Moffet who purchased the Debtor
in 1994.
On May 21, 2014, the Debtor entered into the most recent Tiga
Advertising Inc. Agreement (the "Agreement"), with the Town of
Vail, Colorado (the "Town"). The Town initiated an action on
February 12, 2021, against the Debtor and Mr. Moffet in the
District Court for Eagle County, Colorado, case no. 21CV30034 (the
"State Court Action") seeking damages in the amount of $167,838.95.
The Town brought claims for breach of contract, conversion, and
breach of fiduciary duty against the Debtor, as well as a claim of
aiding and abetting breach of fiduciary duty against Mr. Moffet.
The state court entered judgment in the Town’s favor in the
amount of $88,000.00 but failed to credit the $8,787.50 that the
court found that the Debtor had paid to the Town. Further Debtor
may have colorable claims against the Town of Vail for Bad Faith
and Malicious Prosecution, and a potential Colorado Administrative
Procedures Act §106 claim (which entitles it to recover attorney's
fees) against the Town of Vail for misconduct of a quasi-judicial
procedure. A three-day jury trial in the State Court Action was set
to commence on February 27, 2023. The Debtor could no longer afford
to pay legal fees in the State Court Action and thus, filed
bankruptcy.
The Class 1 Secured Claims are secured by a lien on substantially
all of the Debtor's assets. The Class 1 Claims are unimpaired by
the Plan, and will be treated and paid in accordance with the loan
documents, and will continue to retain all liens securing the Claim
as of the Petition Date. Pursuant to the Note (Secured Disaster
Loans), the monthly payment on account of the Class 1 Claim will be
$74.00 per month on the loan represented by Claim No. 2 and $326.00
per month on the loan represented by Claim No. 1.
Class 2 consists of those unsecured creditors of the Debtor who
hold Allowed Claims that were either scheduled by the Debtor as
undisputed, or subject to timely filed proofs of claim to which the
Debtor does not successfully object. The Class 2 Claimants are
impaired. Class 2 shall receive a pro-rata distribution of a
variable amount during the 3 years following the Effective Date of
the Plan ("Repayment Term") in an amount equal to 100% of the
Debtor's projected disposable income ("Class 2 Distribution").
Total distributions to Class 2 over three years are estimated to be
approximately $55,137.72; an approximate 50.4% return.
In the event the Plan is confirmed as a consensual Plan under
Section 1191(a) of the Bankruptcy Code, Distributions will be made
by the Debtor. In the event the Plan is confirmed as a
nonconsensual Plan under Section 1191(b) of the Bankruptcy Code,
the Debtor will pay the Class 2 Distributions to the Trustee and
the Trustee will make the pro-rata distributions to the holders of
allowed Class 2 Claims. Distributions to Class 2 shall be made by
the 5th of the month following the end of a quarter to the Trustee
in the event of a non-consensual Plan or directly to Class 2 in the
event of a consensual Plan.
Class 3 includes Interests in the Debtor held by the
pre-confirmation shareholders. Class 3 is unimpaired by this Plan.
On the Effective Date of the Plan, Class 3 shall retain its
Interests in the properties which it owned prior to the
Confirmation Date, subject to the terms of the Plan.
As provided for in the Projections, the Debtor is paying all of its
projected disposable income to its creditors. The Debtor has
established a monthly reserve of $1,000.00 each month of the Plan.
At the end of each January, the Debtor will distribute to its
creditors any amount of unused reserve.
A full-text copy of the Subchapter V Plan dated May 18, 2023 is
available at https://urlcurt.com/u?l=TM4kdj from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Steven T. Mulligan, Esq.
Coan, Payton & Payne, LLC
999 18th Street, Suite S 3100
Denver, CO 80202
Telephone: 303-861-8888
Email: smulligan@cp2law.com
About Tiga Advertising
Tiga Advertising, Inc. sells ads to customers and those ads are
placed primarily in buses in ski resorts. The Debtor sought relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No.
23-10553) on Feb. 17, 2023, listing $100,001 to $500,000 in both
assets and liabilities. Steven T Mulligan, Esq. at Coan, Payton &
Payne, LLC represents the Debtor as counsel.
TREES CORP: Delays Filing of March 31 Quarterly Report
------------------------------------------------------
TREES Corporation filed a Form 12b-25 with the Securities and
Exchange Commission with respect to its Quarterly Report on Form
10-Q for the period ended March 31, 2023.
The Company has experienced a significantly increased workload in
fiscal year 2023 as a result of recent acquisitions, and
accordingly, will not be able to timely complete the Form 10-Q
absent unreasonable effort or expense.
Results of operations for the first fiscal quarter of 2022
reflected an operating loss of $417,043. Results of operations for
the first fiscal quarter of 2023 are expected to reflect an
operating loss of approximately $1.17 million. The principal
reason for the increased operating loss in the first fiscal quarter
of 2023 as compared with the corresponding period in 2022 is
increased expense related to cultivation operations and reduction
in wholesale pricing.
About Trees Corp
Headquartered in Denver, Colorado, Trees Corporation (formerly
known as General Cannabis Corp) -- is a cannabis retailer and
cultivator in the States of Colorado and Oregon.
Trees Corp reported a net loss of $9.47 million for the year ended
Dec. 31, 2022, compared to a net loss of $8.87 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $31.69
million in total assets, $25.29 million in total liabilities, and a
total stockholders' equity of $6.41 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated April 17, 2023, citing that the Company has suffered
recurring losses from operations and has a negative working capital
that raise substantial doubt about its ability to continue as a
going concern.
UKG INC: Moody's Affirms 'B2' CFR, Outlook Remains Negative
-----------------------------------------------------------
Moody's Investors Service affirmed UKG Inc.'s existing ratings,
including its B2 Corporate Family Rating and the B1 and Caa1
ratings for its 1st lien and 2nd lien credit facilities,
respectively. The ratings outlook remains negative. UKG plans to
raise $400 million of add-on 1st lien term loans and use proceeds
to refinance outstanding revolver borrowings and replenish its cash
position in anticipation of an acquisition.
Affirmations:
Issuer: UKG Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Backed Senior Secured First Lien Bank Credit Facility, Affirmed
B1
Backed Senior Secured Second Lien Bank Credit Facility, Affirmed
Caa1
Outlook Actions:
Issuer: UKG Inc.
Outlook, Remains Negative
RATINGS RATIONALE
The proposed financing transaction will modestly increase UKG's
leverage and improve its liquidity position. UKG plans to make a
tuck-in acquisition that will be financed with cash and UKG's
stock, and expect the acquisition to be accretive to its organic
revenue growth. The affirmation of the B2 CFR reflects UKG's strong
business profile resulting from its large operating scale, high
proportion of recurring revenues, strong growth prospects, and
Moody's expectations for growing profitability. The negative
ratings outlook reflects UKG's weak financial profile over the next
12 months. Moody's expects UKG's strong EBITDA growth to drive
rapid deleveraging but the company's financial leverage will remain
very high over this period and free cash flow (after the exercise
of restricted stock awards) is expected to be negative in the next
few quarters. The company's software bookings growth remains
strong. But UKG's projected deleveraging and improvements in free
cash flow will be susceptible to slowing software bookings if US
economic growth deteriorates.
UKG is a large provider of Human Capital Management (HCM) software
with strong market positions in the Workforce Management (WFM),
Human Resources software, and Payroll processing categories of the
HCM software market. The HCM software market is large and growing
with the increasing adoption of technology to drive efficiencies
and automation. If economic conditions remain favorable, Moody's
expects UKG's organic revenue growth in mid-teens percentages over
the next 2 to 3 years, and its EBITDA growth to outpace its revenue
growth over this period from operating leverage. The company's
approximately $3.6 billion of annualized recurring software
revenues provide high revenue visibility over the next 12 to 18
months.
Moody's expects UKG's strong growth in operating EBITDA (as
reported by the company) to be largely offset by the large increase
in interest expense in the near term, and free cash flow to be
pressured by the expenses related to the integration of back office
operations of Kronos and Ultimate Software and other business
transformation initiatives. UKG generated negative free cash flow
in the twelve months ended March '23, and Moody's expects free cash
flow to fall short of covering outlays for employee stock
compensation liability and mandatory term loan amortization in
fiscal year ending September 2023. At the same time, UKG's strong
bookings growth from new customers and conversions of its legacy
software customers to higher-value subscription services, and its
high revenue retention rates demonstrate the strength of its
product offerings. If debt does not increase, Moody's expects free
cash flow (after RSU settlements) to improve to the low single
digit percentages of total adjusted debt in FY '24, and total debt
to EBITDA (Moody's adjusted, and after adding back stock-based
compensation expense) to decline from about mid 8x at F2Q '23, to
approximately 6x by the end of FY '24. UKG's large stock-based
compensation liability weighs on its credit profile. Although the
company can limit the number of restricted stock awards that can be
exercised by the holders in biannual offering windows, Moody's
expects that redemption of restricted stock awards will be a
meaningful drag on UKG's operating cash flow over the next several
years as the company will be required to redeem a portion of vested
awards to retain talent in a competitive market.
UKG will have good liquidity comprising $300 million of cash
balances and $545 million of availability under its revolving
credit facility pro forma for the refinancing transaction. Moody's
further expects free cash flow (after RSU payouts) to turn positive
in FY '24.
The Credit Impact Score of CIS-4 primarily reflects governance
considerations, specifically the company's high financial risk
tolerance under the ownership of financial sponsors and its history
of debt-funded dividends and acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given UKG's very high leverage, a rating upgrade is not expected in
the intermediate term. Over time, the ratings could be upgraded if
the company commits to and demonstrates a track record of more
conservative financial policies and sustains free cash flow in the
high single digit percentages of adjusted debt. Conversely, the
ratings could be downgraded if organic revenue growth decelerates
to below high single digits, liquidity weakens, or Moody's expects
free cash flow to remain below 2% of total adjusted debt for an
extended period of time.
UKG was formerly known as The Ultimate Software Group, Inc. The
company is a leading provider of workforce management, human
resources and payroll software applications. Affiliates of Hellman
& Friedman have controlling equity interest in the company. Funds
affiliated with Blackstone, GIC, Canada Pension Plan Investment
Board, and JMI Equity own minority interests in UKG.
The principal methodology used in these ratings was Software
published in June 2022.
V&K JACKSON INC: Future Disposable Income be Use to Fund Plan
-------------------------------------------------------------
V&K Jackson, Inc., submitted a First Amended Chapter 11, Subchapter
V Plan of Reorganization.
The Debtor submits all of its future disposable income to the
extent necessary to consummate this Chapter 11, Subchapter V Plan
by paying priority, secured and unsecured claims pursuant to the
terms set out herein. The Debtor specifically reserves all future
income necessary for living and operating expenses and for direct,
long-term payment of secured claims.
Under the Plan, Class 2 Unsecured claims, pursuant to 11 U.S.C.
sec. 1222(b)(2), the Debtor elects to modify the rights of the
holder of unsecured claims as follows:
1. Unsecured claimants shall receive fixed payments prorated
under the Plan. This payment will be made through the Subchapter V
Trustee.
2. Annual payments will be distributed pro rata to Allowed
Unsecured Claims. The Debtor contends this represents the entire
disposable income of the Debtor.
3. No interest accrued after the date of filing of the Petition
shall be allowed on any unsecured claim, and interest unmatured as
of that date shall be disallowed, as provided for in 11 U.S.C. Sec.
502(b)(2).
4. Pursuant to 11 U.S.C. sec. 1191, the value of the property as
of the effective date of the Plan to be distributed under the Plan
on account of each unsecured claim is described above, equals or
exceeds the amount that would be paid on such claim in a
liquidation clam under Chapter 7.
The Debtor proposes to initially pay 90 percent of "Net Plan
Profit" of Debtor's business operations, which would be Gross
Income of Debtor, less costs of business operations, and secured
and priority Plan payments, annually for 5 years. The remaining 10
percent will be used to pay taxes and the capital needs of the
business.
Any surplus from the remaining 10% of Net Plan Profits shall be
paid as a "True Up" payment annually. These will be yearly
installments made by February of the following year, beginning
February 1, 2024. "True Up" payments, if any, shall be made by
October of the following year, beginning October 1, 2024.
It is anticipated that the annual payment to Allowed Unsecured
Claims will be as follows: Year 1: $16,966.00; Year-2: $21,691.00;
Year3: $26,557.75; Year 4: $31,570.50; Year.5: $36,733.64; Year 6:
$42, 051.67.
In no event shall the total of all annual and "True Up" payments be
less than a cumulative $100,000.00 pot. The Debtor will be able to
make all payments under this Plan pursuant to 11 U.S.C. sec. 1191.
Attorney for the Debtor:
Stuart M. Maples, Esq.
MAPLES LAW FIRM, PC
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
Tel: (256) 489-9779
Fax: (256) 489-9720
E-mail: smaples@mapleslawfirmpc.com
A copy of the Disclosure Statement dated May 10, 2023, is available
at https://bit.ly/41z8Es7 from PacerMonitor.com.
About V&K Jackson
V&K Jackson, Inc. filed a Chapter 11 bankruptcy petition (Bankr.
N.D. Ala. Case No. 22-82237) on Dec. 29, 2022, with as much as $1
million in both assets and liabilities. Judge Clifton R. Jessup,
Jr. oversees the case.
The Debtor is represented by Stuart M. Maples, Esq., at Maples Law
Firm, P.C.
VENUS CONCEPT: Incurs $9.6 Million Net Loss in First Quarter
------------------------------------------------------------
Venus Concept Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $9.62 million on $20.53 million of revenue for the three months
ended March 31, 2023, compared to a net loss of $8.64 million on
$26.41 million of revenue for the three months ended March 31,
2022.
As of March 31, 2023, the Company had $112.81 million in total
assets, $113.02 million in total liabilities, and a total
stockholders' deficit of $886,000.
"The Company has had recurring net operating losses and negative
cash flows from operations. As of March 31, 2023 and December 31,
2022, the Company had an accumulated deficit of $234,310,000 and
$224,105,000 respectively, though, the Company was in compliance
with all required covenants as of March 31, 2023, and December 31,
2022. The Company's recurring losses from operations and negative
cash flows raise substantial doubt about the Company's ability to
continue as a going concern within 12 months from the date that the
unaudited condensed consolidated financial statements are issued.
As of March 31, 2023, and for the three months then ended
management believes the impact of COVID-19 on our business has
largely subsided, but we continue to closely monitor all COVID-19
developments including its impact on our customers, employees,
suppliers, vendors, business partners, and distribution channels.
In addition, the global economy, including the financial and credit
markets, has recently experienced extreme volatility and
disruptions, including increasing inflation rates, rising interest
rates, foreign currency impacts, declines in consumer confidence,
and declines in economic growth. All these factors point to
uncertainty about economic stability, and the severity and duration
of these conditions on our business cannot be predicted, and the
Company cannot assure that it will remain in compliance with the
financial covenants contained within its credit facilities."
Management Commentary:
"Our first quarter revenue results exceeded the high-end of the
Company's expectations," said Rajiv De Silva, chief executive
officer of Venus Concept. "2023 is a year of re-focusing the
business and repositioning Venus Concept to enhance the cash flow
profile of the business and to accelerate the path to long-term,
sustainable, profitability and growth. To that end, we are
encouraged by the early progress towards our restructuring
activities designed to improve our operations and cost structure,
and our continued strategic shift to prioritize cash system sales
which together drove a 53% year-over-year reduction in cash used in
operations in Q1."
Mr. De Silva continued: "We were pleased to announce a new equity
financing agreement with our largest shareholder EW Healthcare
Partners. We appreciate their continued confidence in the Company.
We are evaluating a series of incremental initiatives to accelerate
our path to cash flow breakeven - without impacting our 2023
objectives. We remain highly focused on maximizing our capital
resources as we work to manage our near-to-intermediate-term debt
obligations and to further enhance the Company's foundation for
achieving our longer-term goals."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1409269/000143774923014313/vero20230331d_10q.htm
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $43.58 million in 2022
compared to a net loss of $22.14 million in 2021. As of Dec. 31,
2022, the Company had $125.38 million in total assets, $116.64
million in total liabilities, and $8.74 million in stockholders'
equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
27, 2023, citing that the Company has reported recurring net losses
and negative cash flows from operations, that raise substantial
doubt about its ability to continue as a going concern.
VENUS CONCEPT: Signs $9M Stock Purchase Deal With EW Healthcare
---------------------------------------------------------------
Venus Concept Inc. has entered into a stock purchase agreement with
funds affiliated with EW Healthcare Partners. Pursuant to the
Stock Purchase Agreement, the Company may issue and sell to the
Investors up to $9,000,000, before offering expenses, in shares of
senior convertible preferred stock, in multiple tranches from time
to time until Dec. 31, 2025. Offering proceeds will be used for
working capital and general corporate purposes.
At the initial closing, the Investors will purchase 280,899 Senor
Preferred Stock at a price of $7.12 per share for total gross
proceeds to the Company of $2.0 million. Following the initial
closing, each subsequent tranche request submitted by the Company
to the Investors is subject to acceptance by the Investors.
The purchase price for each share of Senior Preferred Stock
purchased in each tranche floats at a price equal to the product of
(a) the lower of (i) the closing price of the Company's common
stock on the trading day immediately preceding the applicable
tranche closing date and (ii) the average closing price of the
Company's common stock for the five trading days immediately
preceding the applicable closing date, multiplied by (b) two. Each
share of Senior Preferred Stock is convertible into common shares
on a 1-for-2.6667 basis at the option of (i) the Investors at any
time or (ii) the Company within 30 days following the occurrence of
specified trigger events.
"We appreciate the continued support from EW Healthcare Partners, a
longstanding investor in the Company," said Rajiv De Silva, chief
executive officer of Venus Concept. "This financing provides Venus
Concept with valuable capital to execute our near-to-intermediate
term strategic objectives. We look forward to working with EW
Healthcare Partners to access funding from this multi-tranche
private placement as needs arise."
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $43.58 million in 2022
compared to a net loss of $22.14 million in 2021. As of Dec. 31,
2022, the Company had $125.38 million in total assets, $116.64
million in total liabilities, and $8.74 million in stockholders'
equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
27, 2023, citing that the Company has reported recurring net losses
and negative cash flows from operations, that raise substantial
doubt about its ability to continue as a going concern.
VIDEO RIVER: Posts $282K Net Income in First Quarter
----------------------------------------------------
Video River Networks, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
net income of $281,911 on $380,932 of total revenue for the three
months ended March 31, 2023, compared to net income of $599,264 on
$1.04 million of total revenue for the three months ended March 31,
2022.
As of March 31, 2023, the Company had $3.75 million in total
assets, $470,004 in total liabilities, and $3.27 million in total
stockholders' equity.
For the period ended March 31, 2023, the Company reported revenue
of $380,932 and an accumulated deficit of $16,112,498 as of March
31, 2023. The Company said these conditions raise substantial
doubt about its ability to continue as a going concern.
"Our ability to continue as a going concern is dependent upon our
ability to raise debt or equity funding to meet our ongoing
operating expenses and ultimately in merging with another entity
with experienced management and profitable operations. No
assurances can be given that we will be successful in achieving
these objectives."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1084475/000149315223018066/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 15, 2023, citing that the
Company has an accumulated deficit of $16,394,409 for the year
ended Dec. 31, 2022. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
VMR CONTRACTORS: Court OKs Cash Collateral Access Thru June 26
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized VMR Contractors Inc. to use cash
collateral through June 26, 2023, on an interim basis in accordance
with the terms of the order dated March 1, 2023.
The Court said the Debtor will make an adequate protection payment
of $1,500 to the IRS by June 26, 2023. The debtor will make an
adequate protection payment of $1,471 to Old National Bank by June
26, 2023.
As previously reported by the Troubled Company Reporter, several
entities may claim an interest in the Debtor's cash collateral.
Those potential claimants are:
1. The State of Illinois, which recorded state tax liens on
April 28 and June 14, 2022, in the total amount of $32,346.
2. The Internal Revenue Service, which recorded federal tax
liens with the Illinois Secretary of State, including a lien dated
November 16, 2016, in the amount of $424,956. Other tax liens also
have been recorded; the IRS has asserted it is owed $819,234. The
Debtor disputes a large portion of this amount, including an
obligation from 2015 of $560,027, which appears to be clearly
erroneous because it is wholly disproportionate to the Debtor's
operations.
3. Old National Bank, whose predecessor, Bridgeview Bank
Group, filed on August 1, 2018, a financing statement with the
Illinois Secretary of State as document number 023614561. The
amount owed to Old National is approximately $160,633 in London,
England.
A further hearing on the matter is set for June 26 at 10 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=AMzEOg from PacerMonitor.com.
The Debtor projects $53,033 in total income and $51,630 in total
expenses for the two-week period ending June 26, 2023.
About VMR Contractors
VMR Contractors supplies and installs rebar for road construction
projects. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14211) on December 8,
2022. In the petition signed by Vincent Roberson, its president,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Benjamin Goldgar oversees the case.
William J. Factor, Esq., at Factor Law, is the Debtor's legal
counsel.
VYERA PHARMACEUTICALS: Taps Epiq as Claims and Noticing Agent
-------------------------------------------------------------
Vyera Pharmaceuticals, LLC and its affiliates received approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
Epiq Corporate Restructuring, LLC as their claims and noticing
agent.
Epiq will oversee the distribution of notices and will assist in
the maintenance, processing and docketing of proofs of claim filed
in the Chapter 11 case of the Debtor.
The hourly rates of Epiq's professionals are as follows:
IT/Programming $55 - $75
Case Managers/Consultants/
Directors/Vice Presidents $75 - $180
Solicitation Consultant $180
Executive Vice President, Solicitation $190
In addition, Epiq will seek reimbursement for expenses incurred.
As of the petition date, Epiq held a retainer in the amount of
$25,000.
Brian Hunt, consulting director at Epiq, disclosed in a court
filing that she is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Brian Hunt
Epiq Corporate Restructuring, LLC
777 Third Avenue, 12th Floor
New York, NY 10017
Phone: +1 646 282 2532
Email: bhunt@epiqglobal.com
About Vyera Pharmaceuticals
Vyera Pharmaceuticals, LLC is a New York-based biopharmaceutical
company. It focuses on developing and commercializing innovative
treatments for patients with unmet medical needs.
Vyera and its affiliates filed petitions under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
23-10605) on May 9, 2023. In its petition, Vyera reported between
$10 million and $50 million in assets and between $1 million and
$10 million in liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped DLA Piper, LLP as bankruptcy counsel; Sierra
Constellation Partners, LLC as financial advisor; and Alvarez &
Marsal Securities, LLC as investment banker. Epiq Corporate
Restructuring, LLC is the claims and noticing agent.
WARHORSE GAMING: Moody's Assigns First Time B3 Corp. Family Rating
------------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
B3-PD Probability of Default Rating to WarHorse Gaming, LLC. A Ba3
rating was assigned to the company's proposed $20 million super
priority senior secured revolving credit facility and a B3 rating
to the proposed $300 million secured term loan. The outlook is
stable.
Proceeds from the 5-year revolving credit facility, term loan,
along with other cash sources will be used to fund the construction
of two casino properties, fund a contingency, interest reserve,
provide excess cash, and pay related fees and expenses. The company
is developing two casino properties in Nebraska – one in Omaha
(brand new) and the other in Lincoln (an expansion). Management
expects WarHorse Omaha to open its initial phase in Q4 2024, with
925 gaming positions. This will be followed by a second phase which
will include an additional 440 gaming positions by Q3 2025,
resulting in a total of 1,365 gaming positions. The WarHorse
Lincoln casino, which opened in late September 2022, already has
425 gaming positions. The expansion of Lincoln will result in an
incremental 475 gaming positions by Q4 2024 for a total of 900
gaming positions. The fully funded project includes a $33 million
contingency and a fully funded term loan interest reserve of over
$75 million.
Governance risk considerations are material to the rating action.
Governance risk considerations include the company's 100% private
ownership by Ho-Chunk, Inc. which is a wholly-owned subsidiary of
the Winnebago Tribe of Nebraska (the "Tribe"). Additionally,
Moody's views this project as having moderate leverage of over 3.5x
on a pro-forma basis for the first full year of both casino
operations (including Moody's adjustments). It should be noted that
the casino lands are zoned as commercial use and are not on Tribal
land.
Assignments:
Issuer: WarHorse Gaming, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured 1st Lien Term Loan, Assigned B3
Senior Secured Super Priority Revolving Credit Facility, Assigned
Ba3
Outlook Actions:
Issuer: WarHorse Gaming, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
WarHorse's B3 Corporate Family Rating reflects the ground-up,
debt-financed nature of the two casino development projects,
ramp-up risk associated with most new casino projects, and limited
diversification. In the B3 rating Moody's also takes into
consideration the competitive market in which WarHorse will be
operating, which includes three commercial casinos in Council
Bluffs, Iowa. Moody's expects leverage of about 3.5x debt/EBITDA at
the end of its first full year of operations (June 2026). Risks
regarding general economic conditions, particularly as it relates
to sectors such as gaming that are heavily reliant on consumer
discretionary spending, remain a constraint.
Positive rating considerations include WarHorse's position which
will include two new casinos in Nebraska, with central locations in
Omaha and Lincoln. Management expects the facilities to draw
patrons from the surrounding Omaha and Lincoln markets that travel
to markets such as Council Bluffs, Iowa to gamble. The Lincoln
casino that is currently open (to be expanded as part of this
transaction) will also provide cash flow to support both expansion
projects. Nebraska's 20% gaming tax is lower than many regional
markets. Moody's also note that as WarHorse Gaming is 100% owned by
Ho-Chunk, Inc., a component unit of the Winnebago Tribe of
Nebraska, it is exempt from federal income tax and Nebraska state
income taxes.
The Ba3 rating assigned to WarHorse's revolver reflects the fact
that under certain situations – such as license revocation,
payment default, or bankruptcy, among others – revolver lenders
will be repaid first prior to payment of term loan lenders. In
these circumstances, term loan lenders would be subordinate in
right of repayment to loans made under the revolver. This creates a
material loss-given-default benefit to loans made under the
revolver, relative to those made under the term loan, and hence
explains the three notch rating differential. The B3 rating
assigned to WarHorse's term loan, in line with the Corporate Family
Rating, reflects that it comprises the preponderance of the
company's debt capital structure.
The stable rating outlook reflects Moody's expectation that
WarHorse will have sufficient funds to complete construction and
commence operations, with the appropriate level of contingency
reserves typically provided for this type of development project.
This includes a fully funded interest reserve and completion
guarantee from Ho-Chunk, Inc.
ESG CONSIDERATIONS
WarHorse's rating is impacted by governance considerations.
Governance risk linked primarily to private ownership and the
potential for elevated leverage is a concern, given the uncertainty
of the properties achieving full ramp up, as there is limited
operating history. The company is also exposed to social risk,
particularly with respect to the risk associated with changing
demographic and consumer preferences that may not favor traditional
casino gaming in the future. WarHorse's environmental risk
exposure, however, is neutral to low.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's does not expect a ratings upgrade during the construction
period. However, once construction is complete, WarHorse's ratings
could be upgraded if the project successfully ramps up and
debt/EBITDA falls below 4.0x.
Ratings could be downgraded if the project experiences significant
cost over-runs or construction delays, Moody's expectations about
the general economy and consumer spending materially worsen,
competition unexpectedly increases, or liquidity weakens.
Additionally, beyond the construction period, ratings could be
downgraded if the ramp-up performance is slower than expected, or
for any reason results in debt/EBITDA above 6.0x.
The principal methodology used in these ratings was Gaming
published in June 2021.
WarHorse Gaming, LLC is a Nebraska based casino company which is
developing a new property in Omaha, and expanding an existing
property in Lincoln. WarHorse is 100% owned by Ho-Chunk, Inc.,
which is an economic development corporation owned by the Winnebago
Tribe of Nebraska. Moody's expects the projects to generate over
$300 million in annual revenue in the first full year of
operations.
WARHORSE GAMING: S&P Assigns 'B-' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
WarHorse Gaming LLC. In addition, S&P assigned its 'B+' issue-level
rating and '1' recovery rating to the proposed super-priority
revolver and a 'B-' issue-level rating and '3' recovery rating to
the proposed term loan.
The stable outlook reflects S&P's forecast for WarHorse to maintain
sufficient liquidity through the approximately two-year
construction period and that the properties will generate
sufficient EBITDA in its first year of full operations to
comfortably support fixed charges and generate positive
discretionary cash flow (DCF) that it may use for debt reduction.
WarHorse plans to issue a new senior secured credit facility,
consisting of a $20 million super-priority revolving credit
facility and a $300 million term loan B due in 2028. The company
intends to use the proceeds to finance the construction of an
expansion project of its interim casino in Lincoln, a new casino in
Omaha, fund an interest reserve, and for transaction expenses.
The 'B-' issuer credit rating on WarHorse reflects the risks
associated with developing and ramping-up new gaming operations.
These include the uncertainty over the breadth and depth of the
target gaming market, the need to build a customer database from
scratch, some construction risk, future economic uncertainty, and
the need to service relatively high-interest construction loans.
The interim facility in Lincoln, the phased opening of the Omaha
casino and the approximately 21-month interest reserve to include
six months of the post-construction period reduces some of the
risks inherent in greenfield projects. Greenfield projects are
subject to high ramp-up risks that can strain liquidity in the
first months of operations. New properties can take a year or more
to fully ramp up and attract the right mix of customers. Therefore,
revenue to meet projected initial post-opening costs may not
immediately materialize. Moreover, macroeconomic headwinds from
inflation pressure and higher interest rates could weaken
discretionary spending from the gaming consumer given S&P's
base-case expectation for a shallow recession. Depending on the
depth and length of a recession, it could translate to visitation,
revenues, and cash flow being lower than expected from the interim
casino, as gaming relies on consumer discretionary spending and is
highly sensitive to economic conditions.
S&P said, "WarHorse's interim casino in Lincoln has been operating
since the end of September 2022 and we expect the interim facility
in Omaha to open at the end of 2024. The first seven months of
performance at the Lincoln facility gives us some indication of the
expected interim performance and cash flow generation. This gradual
introduction of its offerings and amenities to the market may
enable it to understand market dynamics prior to opening of the
permanent facility, which could reduce the ramp-up period that
greenfield projects typically face. The temporary facility will
also generate modest cash flow that it can use to support
constructions costs and service its debt. Assuming WarHorse opens
the Omaha interim casino without any significant delay, we view the
phased opening of the property, its operations in a limited license
jurisdiction, and close geographic proximity to its primary target
markets in dense population centers as risk mitigants."
WarHorse's liquidity risks are largely mitigated.
Construction-related risks such as cost overruns or delays,
possibly due to lingering supply chain issues or labor shortages,
can strain a project's liquidity. However, the company's
contingency budget includes $33 million of funded project
contingencies (representing about 18% of casino hard costs), which
is in line with other gaming projects. WarHorse's parent, Ho-Chunk
Inc., is providing an unfunded completion guaranty. Together, these
help to mitigate some of the risk of cost overruns and delays.
Additionally, the company has guaranteed maximum-price contracts
with its contractors for the construction of the Lincoln and Omaha
facilities, both of which are backed by performance bonds.
S&P said, "Because we expect the funded interest reserve to cover
the full construction period and six months post opening and the
company will benefit from operations at the interim facilities
prior to the completion of the full project, we do not expect
liquidity constraints during construction. WarHorse opened its
Lincoln interim casino in September 2022 with 425 gaming positions
and plans to open its Omaha Phase 1 with 925 gaming positions in
the fourth quarter of 2024. Omaha's first phase will be operational
for about nine months before the facility is complete. The fully
operational casinos are designed to be expansions of the first
phase interim casinos at both locations. We expect that the fully
operational Lincoln casino and the interim casino in Omaha will
begin to generate sufficient cash flow to fund principal and
interest payments in the second half of 2025.
"In addition, we expect that WarHorse will mitigate the floating
rate risk with an interest rate hedge on least 50% of the principal
loan amount."
Barriers to entry limiting competition in Nebraska and proximity to
target market are competitive advantages. WarHorse operates in a
limited license jurisdiction. Both casino properties are centrally
located to their respective markets. Additionally, only six horse
racing tracks in the state qualify for casino development. WarHorse
owns one additional racetrack, in addition to Lincoln and Omaha.
All three Nebraska casino operators that WarHorse will compete with
are located between 80 to 100 miles away from any of WarHorse's
locations in the western part of the state. The Grand Island casino
opened in January 2023 and thus far has not had a material impact
on the Lincoln interim casino. Furthermore, there is a
quasi-moratorium on new racetracks until an impact study can be
done by the Nebraska Racing and Gaming Commission by 2025. So, S&P
expects minimal competition over the next few years.
Notwithstanding, both casinos will compete against three existing
casinos in the Council Bluff area, which are owned by larger
regional gaming operators--Ameristar Casino Hotel Council Bluffs
(operated by PENN Entertainment Inc.), Horseshoe Council Bluffs,
and Harrah's Council Bluffs (both operated by Caesars Entertainment
Inc.), which are all with in a 15-mile radius of WarHorse Omaha and
70 miles of WarHorse Lincoln. Comparatively, these operators have
greater resources to invest in their marketing and promotions to
defend market share and have sizable player databases and
coordinated player loyalty programs designed to cross-promote their
other properties. Nevertheless, these specific properties are a
small proportion of the overall revenue and EBITDA contribution of
the wider regional operating enterprises, and therefore, S&P
believes those operators are unlikely to engage in destructive
marketing which could significantly deteriorate margins and
operating results to retain visitation and market share.
S&P said, "WarHorse should benefit from its proximity to the
densely populated cities of Omaha and Lincoln and some location
advantage to its Council Bluff competition as the Council Bluffs
market draws significant visitation from the Omaha and Lincoln
areas. We believe that underinvestment in the Council Bluff
properties may make them less attractive experiences to Warhorse's
brand new facilities. Additionally, these areas have higher
household incomes than the Iowa sector of the market. Although, we
expect WarHorse to be able to ramp up its operations fairly quickly
when compared with most rated new gaming projects, both facilities
are in new gaming markets which will require marketing outreach to
attract the right gaming customers.
"The stable outlook reflects our forecast for WarHorse to maintain
sufficient liquidity through the approximately 2 year construction
period and initial ramp-up periods because of interest reserves and
modest cash flow from the interim operations. We assume that the
fully operational Lincoln facility and phase 1 of the Omaha
facility will be sufficient to cover debt service after a six-month
ramp-up period.
"We could lower the rating if we no longer believed the company had
sufficient liquidity sources to cover construction costs or
operating expenses when the facilities are ramping up in 2025. This
would likely occur if the project ran meaningfully over budget, was
significantly delayed, if the interim casinos weren't generating
enough cash flow to support the construction budget, or if the
casino underperformed our base-case EBITDA forecast meaningfully in
the first few months of full operations. We could also revise the
outlook to negative or lower the rating if we no longer believed
economic conditions would support our base-case forecast.
"We consider an upgrade unlikely until the full casinos open and we
can observe operating performance. We could raise the rating one
notch if the casino opens on time and meets our operating
expectations such that debt to EBITDA declines to under 5x and
EBITDA coverage of total interest is above 2x, incorporating future
growth investments and potential additional expansion."
ESG credit indicators: E-2, S-3, G-3
S&P said, "Social factors are a moderately negative consideration
in our analysis of Warhorse, which is planning to construct two
casino properties in Nebraska over the next two years. Although the
pandemic was a rare and extreme disruption for gaming operators,
safety and health scares and the possibility of restrictions as a
result are an ongoing risk. Warhorse also faces regulatory risks,
as it is subject to high regulation in its sole operating market,
Nebraska. Governance factors are a moderately negative
consideration because WarHorse's parent, Ho-Chunk Inc., is
controlled by the Winnebago Tribe of Nebraska, which relies on
distributions for its operating budget."
WERNER FINCO: Moody's Affirms Caa2 CFR & Rates New Sec. Debt Caa1
-----------------------------------------------------------------
Moody's Investors Service affirmed Werner FinCo LP's corporate
family rating at Caa2 and probability of default rating at Caa2-PD.
Moody's downgraded the company's existing unsecured notes from Caa3
to Ca. Moody's also assigned a Caa1 to the new secured debt due
2028 and Caa3 to the new junior lien debt due 2028. The outlook
remains negative.
The rating action follows Werner's proposed up-tiering transaction
of its existing $265 million unsecured notes due July 2025. The
company intends to convert at least 85% of its existing unsecured
notes to new junior lien exchange notes due 2028 in a par for par
exchange. Any existing unsecured notes that are not exchanged will
remain in place with a subordinated position relative to the new
junior lien exchange notes. The company has the option to pay a
portion of pay-in-kind interest on the new junior lien exchange
notes.
Concurrently, Werner launched $400 million of new senior secured
notes that will be used to refinance the first lien term loan
maturing in July 2024 and repay some outstanding borrowings on the
company's asset-based revolving credit facility. Moody's will
withdraw the rating on the term loan maturing in 2024 when the
transaction closes.
Moody's considers the up-tiering transaction a distressed exchange
and a limited default. As such, following the closing of the
exchange offer, Moody's would append the /LD designation to
Werner's Caa2-PD probability of default rating. Moody's will remove
the "/LD" designation from the company's PDR in approximately three
business days after appending.
"Extending maturities provides additional time to execute on the
company's strategic pricing and operational initiatives - and for
end markets to recover. Volume has declined sharply in North
America Retail in recent quarters, where consumer demand has
weakened considerably," said Justin Remsen AVP-analyst. "Werner
needs to grow earnings meaningfully to generate positive free cash
flow and reduce default risk given the higher interest burden,"
added Remsen.
The rating outlook is likely to remain negative following the close
of the transaction. Despite addressing near term maturities and
increasing revolver availability, Werner's liquidity remains weak.
Moody's estimates free cash flow will be negative $10 million in
both 2023 and 2024. Liquidity is supported by an estimated $12
million of cash at closing and $100 million availability under the
company's asset-based lending (ABL) revolver. That said, the
company's interest expense will increase materially including a
step-up in July 2025 when the remaining unsecured notes mature.
Werner will maintain limited cushion under the ABL's fixed charge
coverage ratio over the next 12 months.
Affirmations:
Issuer: Werner FinCo LP
Corporate Family Rating, Affirmed Caa2
Probability of Default Rating, Affirmed Caa2-PD
Assignments:
Issuer: Werner FinCo LP
Senior Secured Global Notes, Assigned Caa1
Senior Secured Junior Lien Notes, Assigned Caa3
Downgrades:
Issuer: Werner FinCo LP
Senior Unsecured Regular Bond/Debenture, Downgraded to Ca from
Caa3
Outlook Actions:
Issuer: Werner FinCo LP
Outlook, Remains Negative
RATINGS RATIONALE
Werner's Caa2 CFR reflects the company's unsustainably high
leverage, weak free cash flow, and low margins. Moody's forward
view assumes the company's leverage will decline from near 10x for
the twelve months ending March 31, 2023 to low 9x by calendar year
2023 through margin improvement as pricing initiatives and
manufacturing efficiencies offset volume declines. Moody's
anticipates further declines in leverage to near 8x by calendar
year 2024 as the residential construction market stabilizes and
volume returns.
The rating also reflects cyclical end markets, where the
residential construction market can contract quickly and have an
acute impact on the company's financial profile. Werner's
profitability is also vulnerable to volatile raw material costs
including steel and aluminum. The company has customer
concentration with The Home Depot, Inc. (A2 stable) and Lowe's
Companies, Inc. (Baa1 stable) representing a material portion of
sales. These retailers are high-volume purchasers with strong
bargaining power. Strengths include the company's leading market
position for its products, especially Werner-branded ladders. The
company also has a track record of developing innovative products
that fulfill needs in the marketplace.
The Caa1 rating on Werner's new senior secured note, one notch
above the Caa2 CFR, results from its subordination to the company's
asset based revolving credit facility but priority of payment
relative to the company's company's other debt and non-debt claims.
The company's sponsor debt is subordinate to the new junior lien
notes. The secured rating also reflects a one-notch downward
override to the LGD indicated outcome reflecting Moody's view of
non-debt claims as a more volatile debt cushion. The Caa3 rating
on the company's new junior lien notes, one notch below the CFR,
results from their subordination to the company's considerable
amount of secured debt.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
Werner's ESG CIS-5 reflects the G-5 governance score associated
with concentrated decision making and aggressive financial strategy
and risk management under private equity ownership. The governance
score also considers the distressed exchange to address Werner's
near term maturities and elevated leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook continues to reflect the elevated risk of a
default over the next 12-18 months due to weak operating trends,
high leverage, and negative free cash flow. Redemption of debt at a
discount or conversion of debt for equity could be considered a
distressed exchange and a default per Moody's methodology.
The ratings could be downgraded if Werner's profitability does not
improve as a result of pricing initiatives and manufacturing
efficiencies. A deterioration in liquidity could also lead to a
downgrade.
Before Moody's would consider an upgrade, Werner would need to
materially improve its operating performance, restore positive free
cash flow, and maintain at least adequate liquidity.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
WERNER FINCO: S&P Places 'CCC+' ICR on CreditWatch Positive
-----------------------------------------------------------
S&P Global Ratings placed all ratings, including its 'CCC+' issuer
credit rating on Itasca, Ill.-based Werner FinCo L.P. on
CreditWatch with positive implications.
S&P said, "At the same time, we assigned our preliminary 'B-'
issue-level rating and '3' recovery rating to the company's
proposed $400 million senior secured notes due 2028 and our
preliminary 'CCC' issue-level rating and '6' recovery rating to the
proposed $265 million junior-lien exchange notes due 2028.
"The CreditWatch placement indicates that we will likely raise our
issuer credit rating on Werner by one notch to 'B-' if it
successfully completes the proposed refinancing.
"We expect the proposed refinancing will alleviate the company's
liquidity pressure."
Werner is planning to issue $400 million of senior secured notes
due 2028 to repay the $355 million outstanding on its term loan B
due 2024. The company is also planning to issue up to $265 million
of new junior-lien exchange notes due 2028, which it will exchange
for all or a portion of its existing $265 million senior unsecured
notes due 2025 on a par for par basis. The exchange note placement
is subject to 85% minimum participation by Werner's noteholders.
S&P said, "We view the terms of the proposed junior-lien exchange
notes, including the exchange at par, the incremental interest, and
the granting of a junior lien, as providing adequate compensation
for the unsecured notes. In addition, the company is repaying $60
million of revolver borrowings (before transaction fees and
expenses),which will increase its liquidity cushion. We also
forecast Werner will remain in compliance with its springing
financial covenants and meet our requirements for adequate
liquidity over the next 12 months, including maintaining liquidity
sources of more than 1.2x its uses."
S&P expects Werner's credit measures will remain elevated,
including debt leverage of more than 8x in 2023.
S&P said, "We believe that soft demand, exacerbated by
macroeconomic factors, will constrain the company's sales and limit
the expansion of its earnings across most of its operating regions
in fiscal year 2023. Therefore, we forecast Werner's S&P Global
Ratings-adjusted leverage will remain above 8x in 2023, which
exceeds our 7x-8x expected range for a stable outlook. In addition,
the higher coupon rates associated with the company's refinancing
will pressure its EBITDA coverage ratios. We believe Werner's
credit metrics will be in the weaker end of our expected range for
the rating upon the completion of its refinancing.
"We expect to resolve the CreditWatch placement when the
refinancing closes and we have reviewed the final terms of the new
debt. We will likely raise our issuer credit rating on the company
by one notch to 'B-' if the transactions closes on the proposed
terms. Alternatively, we would reassess our ratings on Werner if
the transactions doesn't close, which would most likely lead us to
maintain or lower our current ratings and withdraw the preliminary
ratings."
YAK TIMBER: Lender Seeks to Prohibit Cash Collateral Access
-----------------------------------------------------------
AgWest Farm Credit Services, PCA, formerly known as Northwest Farm
Credit Services, PCA, asks the U.S. Bankruptcy Court for the
District of Alaska to prohibit Yak Timber Inc. from using cash
collateral.
The Chapter 11 proceeding was filed on the eve of the hearing
scheduled for Farm Credit's Motion for Preliminary Injunction in
the in rem and in personam District Court proceedings filed against
the Debtor, and a Tug and Barge securing Farm Credit's $13+ million
in loans, all of which have been accelerated. The Preliminary
Injunction sought to maintain the location of the Vessels due to
serious lapses in insurance, resolve vessel certification issues,
and survey and inspect the Vessels to ascertain their condition,
which Farm Credit is entitled to do under its loan documents.
Before the Preliminary Injunction motion, Farm Credit had requested
resolution of these items for many weeks. In short, the Preliminary
Injunction motion was filed due to Yak Timber's lack of cooperation
in allowing Farm Credit to protect its security interest in the
Vessels.
Following the Chapter 11 filing, the District Court proceedings
were stayed, including the Preliminary Injunction motion. Farm
Credit continued to request cooperation from the Debtor in
maintaining and disclosing the location of the Vessels to reduce
the risk of loss until the insurance issues were resolved, and
making the Vessels available for inspection. Farm Credit also
anticipated that the Debtor would immediately file a motion for use
of cash collateral. Farm Credit has informed the Debtor's counsel
on multiple occasions that it does not consent to the use of its
cash collateral.
Nearly two weeks have passed since the Petition Date and the Debtor
still has not obtained Court authorization to use cash collateral.
Moreover, while the Debtor has remained in communication with Farm
Credit in coordinating inspection of the Vessels, it has not been
forthcoming regarding its intent to use or move the Vessels. As of
the time of the Motion, the Vessels have not been inspected;
however, the Debtor has agreed to allow surveys to proceed on May
27, 2023.
Farm Credit has serious concerns about whether the Debtor is paying
any post-petition expenses, or what funds the Debtor is using to
pay for essential operating expenses such as insurance premium
financing, tugboat crew and other payroll, dockage/moorage fees,
supplies, fuel and other necessities. If the Debtor is operating
without paying for these expenses this only increases the risk to
Farm Credit's Vessel collateral.
In addition to the Vessel collateral, Farm Credit has other
collateral which is either unprotected or unaccounted for. This
includes logging machinery, equipment, logs, accounts receivable,
cash on hand and vehicles, the amounts, whereabouts and condition
of which are unknown.
Starting in the Summer of 2020, Farm Credit made a series of loans
to Yak Timber. Yak Timber is the wholly owned subsidiary of Yak-Tat
Kwaan, Inc., an Alaska Native Village Corporation. The loans were
made to assist Yak Timber with financing the purchase of logging
equipment and to provide a line of credit and to pay fees and costs
in connection with the Loans and to fund operations.
Beginning in early 2022, Yak Timber began to fall out of compliance
with its reporting requirements. In the Fall of 2022, Yak Timber
failed to make loan payments when due. Since then, Farm Credit
issued several notices of default, but continued to stay in
communication with Yak Timber about the status of its Loans. As of
March 21, 2023, the balance on the Loans exceeded $13 million. The
Loans are secured by most of Yak Timber's assets, including the Tug
and Barge, logging machinery and equipment, vehicles, and certain
timber rights.
Farm Credit has not received a single payment towards its Loans
since November of 2022 (and the payment received then was only a
partial one). With the uncertainty of the location of the marine
assets and much of the heavy equipment, lack of information
regarding intended operations and uncertainty regarding value and
status of its collateral, Farm Credit is at risk of the rapid
diminution in the value of cash collateral, log inventory and
personal property.
A copy of the motion is available at https://urlcurt.com/u?l=xvFtMw
from PacerMonitor.com.
Attorneys for AgWest Farm Credit, PCA:
BINAH B. YEUNG, Esq.
JOHN R. RIZZARDI, Esq.
Cairncross & Hempelmann, P.S.
524 Second Avenue, Suite 500
Seattle, WA 98104-2323
Tel: (206) 587-0700
Email: byeung@cairncross.com
Email: jrizzardi@cairncross.com
About Yak Timber Inc.
Yak Timber Inc. is a timber company in Yakutat, Alaska.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bakr. D. Alaska Case No. 23-00080) on May 11,
2023. In the petition signed by Marvin Adams, chief executive
officer, the Debtor disclosed up to $50 million in both assets and
liabilities.
Terry P. Draeger, Esq., at Beaty & Draeger, Ltd., represents the
Debtor as legal counsel.
ZHALILOV INC: Case Summary & Nine Unsecured Creditors
-----------------------------------------------------
Debtor: Zhalilov Inc.
DBA Zipper Freight
6100 North Talman Avenue
Apt. A2
Chicago, IL 60659
Chapter 11 Petition Date: May 23, 2023
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 23-06799
Judge: Hon. Deborah L. Thorne
Debtor's Counsel: Joel A. Schechter, Esq.
LAW OFFICES OF JOEL A. SCHECHTER
53 West Jackson Blvd
Suite 1522
Chicago, IL 60604
Tel: 312-332-0267
Fax: 312-939-4714
Email: joel@jasbklaw.com
Total Assets: $397,114
Estimated Liabilities: $1,285,103
The petition was signed by Erlan Zhalilov as president.
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/RNTGXMY/Zhalilov_Inc__ilnbke-23-06799__0001.0.pdf?mcid=tGE4TAMA
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Chapter 11 Petition filed May 18, 2023
represented by: Andres Diaz, Esq.
In re Glendale Investment Alliance, LLC
Bankr. C.D. Cal. Case No. 23-13125
Chapter 11 Petition filed May 19, 2023
See
https://www.pacermonitor.com/view/CUKN43A/Glendale_Investment_Alliance_LLC__cacbke-23-13125__0001.0.pdf?mcid=tGE4TAMA
represented by: Giovanni Orantes, Esq.
THE ORANTES LAW FIRM, A.P.C.
E-mail: go@gobklaw.com
In re Monica L. Columbia
Bankr. C.D. Cal. Case No. 23-10696
Chapter 11 Petition filed May 19, 2023
represented by: Robert Yaspan, Esq.
In re FCT-SM, LLC
Bankr. D. Nev. Case No. 23-12049
Chapter 11 Petition filed May 19, 2023
See
https://www.pacermonitor.com/view/Y6LHPPA/FCT-SM_LLC__nvbke-23-12049__0001.0.pdf?mcid=tGE4TAMA
represented by: Matthew L. Johnson, Esq.
JOHNSON & GUBLER, P.C.
E-mail: mjohnson@mjohnsonlaw.com
In re KPG Revenue Cycle Management, Inc.
Bankr. D. Nev. Case No. 23-12013
Chapter 11 Petition filed May 19, 2023
See
https://www.pacermonitor.com/view/5TFWJCY/KPG_REVENUE_CYCLE_MANAGEMENT_INC__nvbke-23-12013__0001.0.pdf?mcid=tGE4TAMA
represented by: Seth D. Ballstaedt, Esq.
FAIR FEE LEGAL SERVICES
E-mail: help@bkvegas.com
In re RCM-TO GO, LLC
Bankr. D. Nev. Case No. 23-12014
Chapter 11 Petition filed May 19, 2023
See
https://www.pacermonitor.com/view/CEOLSQY/RCM-TO_GO_LLC__nvbke-23-12014__0001.0.pdf?mcid=tGE4TAMA
represented by: Seth D. Ballstaedt, Esq.
FAIR FEE LEGAL SERVICES
E-mail: help@bkvegas.com
In re Irina Kontorovich
Bankr. E.D.N.Y. Case No. 23-41769
Chapter 11 Petition filed May 19, 2023
represented by: Alla Kachan, Esq.
In re 463 Classon Ave HDFC Block 1985/Lot 05
Bankr. E.D.N.Y. Case No. 23-41767
Chapter 11 Petition filed May 19, 2023
See
https://www.pacermonitor.com/view/3AJNQIY/463_Classon_Ave_HDFC_Block_1985Lot__nyebke-23-41767__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Golesis Properties, LLC
Bankr. D. Utah Case No. 23-22042
Chapter 11 Petition filed May 19, 2023
See
https://www.pacermonitor.com/view/RIJF4KQ/Golesis_Properties_LLC__utbke-23-22042__0001.0.pdf?mcid=tGE4TAMA
represented by: Andres Diaz, Esq.
DIAZ & LARSEN
E-mail: courtmail@adexpresslaw.com
In re Jason Paul Reynolds
Bankr. C.D. Cal. Case No. 23-11033
Chapter 11 Petition filed May 21, 2023
represented by: Anerio Altman, Esq.
In re Ken Farrington Tractor & Landclearing, Inc.
Bankr. M.D. Fla. Case No. 23-01935
Chapter 11 Petition filed May 22, 2023
See
https://www.pacermonitor.com/view/LFWJ6ZA/Ken_Farrington_Tractor__Landclearing__flmbke-23-01935__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re Novus Structures, Inc.
Bankr. N.D. Ill. Case No. 23-06723
Chapter 11 Petition filed May 22, 2023
See
https://www.pacermonitor.com/view/MLP77PQ/Novus_Structures_Inc__ilnbke-23-06723__0001.0.pdf?mcid=tGE4TAMA
represented by: Gregory K. Stern, Esq.
GREGORY K. STERN, P.C.
E-mail: greg@gregstern.com
In re World Security Services Inc.
Bankr. D.P.R. Case No. 23-01542
Chapter 11 Petition filed May 22, 2023
See
https://www.pacermonitor.com/view/2XCB47A/WORLD_SECURITY_SERVICES_INC__prbke-23-01542__0001.0.pdf?mcid=tGE4TAMA
represented by: Carlos Alberto Ruiz, Esq.
LCDO. CARLOS ALBERTO RUIZ, CSP
E-mail:
carlosalbertoruizquiebras@gmail.com
*********
Monday's edition of the TCR delivers a list of indicative prices
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obtained by TCR editors from a variety of outside sources during
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Troubled Company Reporter is a daily newsletter co-published
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Peter A. Chapman, Editors.
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