Case 15-11663-LSS Doc 373 Filed 03/30/16 Page 1 of 12 15-11663-LSS Doc 373 Filed 03/30/16 Page 1 of 12 In re: Response Genetics, Inc. Case No,: 15-11663 (LSS) Reporting Period: February

UNITED STATES BANKR[TPTCY COURT

F012 THE DISTRICT OF DELAWARE

In rc: Response Genetics, Inc. Case Na.: 15-11663 (LSS)

Reporting Period: February 1 to February 29, 2016

MONTHLY OPERATING REPORT

File with Court and submit copy to United Stites Truafee within 20 days after ead of mootd.

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

Schedule of Cash i~ecci is end [)isbucsern~nts MOR-1 X

bank Reconciliation or ca ies of debtor's bank reconciliations MOR.Ia X

ScE~cttulc ~~f f'rnfva-sion~l Fees f~aid IviC)It-!l~ X

C:~~ ics c}f brink statementsX

Cash c9ist>w:~cments iou~•nelsX

Statement of f) cratians MOR-2 X

Balance Sheet MOR-3 X

Stah~s of i~os~ ctitiaii "faxes MOR•4 X

Cox ies of IRS Form 6123 or ~u ~ment rccci t

La ie, of tax returns filed Burin re Fortin eriod

Summar of Lk~ aiti fast etition llebt5 MOR-4 X

l..istin ~f a red accounts ~~ able MQR-4 X

Accounts KcccivF~ble Reconciliation and A yin MOR~S X

Debtor )uesiiAmieire MOR-5 X

I declare under penalty of perjury (28 U.S.C. Seotion 174b) that this report and the attached documents

are true and correct to the best of my knowledge and belief.

Signature of J~ebtor

Signature of Joint Debtor

`V u

Sig • e cif Auttiorizeci t i idua!'~

pate

Date

3 / 34 / ~. 12b._—.__.___........_._Date

„~Ren~amin J. MatzPrinted Name of Authorized Individual

...., Chief Restructuring Officer

Title of Authorized Individual

'" Authorized individual must be an offrcer, director ar shareholder if debtor is a corporation; a parWer if debtor

is a partnership; a manager or member if debtor is a limited liability company,

MOR(04/07)

Case 15-11663-LSS Doc 373 Filed 03/30/16 Page 1 of 12

In re: Response Genetics, Inc. Case No,: 15-11663 (LSS)

Reporting Period: February 1 to February 29, 2016

GENERAL NOTES AND ~IISCLtIiMER TO MUNTHL`~ 9PEl2A'TING 12EFt3RT

Tl~e financial statements and supplemental information contained herein are unaudited, preliminary, and may not comply with generally

accepted accounting principles ("GAAP") in all material respects. In addition, the financial statements nna supptenieneal inf~nrratinn

contained herein is provided to fulfill the requirements of the Office of the United States Trustee and have Ucen d4rivec! from Aic hooks and

records of the Debtor.

Ttie results of operations contained herein are not necessazily indicative of results that are expected from any other period or for the full year

and are not reflective of the results of operations, financial position, and cash flow of the Debtor in the fuh~re (and as more fully described

below).

An Order (AJ Approving Sale of SubstandaJly AlJ of the Debtor's Assets, and (BJ Approving the Assumption and Assignmen! of C.ertarn

Executory Contracts and Unexpired Leases was entered into on pctober 1, 2015 approving the sale of assets to Lancer Genetics, Inc, (the

"Sale"). The closing of the Sale occurred an or about Ocrober 9, 2(115.

At the closing ofthe Sale, the Debtor transferred substantially all of its assets and certain liabilities to Cancer Genetics, Inc. ("CCiI" or the

"Buyer"), which also assumes the Debtot's operations as marketer and provider of molecular profiling services of tumor tissues (the "Business

Operations"). 1'ha Debtor has, since the closing of toe Sale, been warkin~ to resolve remaining elairns of the Debtor's estate, monetizing the

receivt~bles retained, and pursuing an orderly wind down of the affairs of the Estate.

Notes to MOR-1

In lieu of bank reconciliations, bank and book balances are provided.

Notes to MOR•2

`I'iie Debtor's Statement of Operations contain material estimates that are subjected to ongoing review and analysis. The Debtor will

tunend, if necessary, upon the completion of this review and analysis,

Notes to MOR-3

The Debtor's Balance Sheet contain. significant estimates that are subjected to ongoing review and analyses by the Buyer and the Debtor's

professionals. Included fn the balances are adjuskments the Debtor recorded in respect of gains and losses related to the Sale and the

dissolutiott of the Dabtor's unconsolidated foxeign subsidiary.

Notes to MOR-4

Pursua~rt to the terms of the Sale, tl~e Buyer assumed certain liabilities, including substantially all of the amounts related to the Business

Operations, The outstanding accounts payable balance as of February 29, 2016 consisted mostly of expenses incurred in connection with

the Estate's administrative activities.

Notes to MOR-5The Debtor retained certain accounts receivable in the Sale. Therefore, the Debtor has retained services of certain professiona

ls to collect

these accounts receivable for the benefit of the Estate's creditors.

MQR(G~/U7)


In re; Response Genetics, Inc. Cast No. 15-I 1663 (I,SS)

Debtor Reporting Period: February 1 ro February 29, 2014

MOR-1Receipts & Disbursements Report

_'~' ~;

zti.,.13.,171t1 xt ~ ~. hut?ws,%~;.43066a~..~.~.3 ,...~u..::ax?~a 3"'sa.r ~ 7b~, s.~n~ xers '3'ER~ ~ ~ . .

~~nnina Book Cash

Opening Book llalance 5 973,119 S S - S 6,01N1 S 979,128

RecciNs

Recelptr

Collection on Receivablex S 37,566 $ - S ~ S ~ S 33,566

Receipts-TransPerzedfrom Other DebtorAcc. 2•~Z~ ~ 2"121

Total Receipts and Adjustments $ 33,Sb6 S - S 2,121 5 •~ S 35,b87

Air6ursentents

Payroll and RelaleJ S (2,121) - (2,121)

SG&A 3 8831 3,583

Totnl Operating Gisbursementx ~~,8R~) (2,121) (6,~~)

Nnn-Opemling Dirburseutents

Aankruptcy Related Professional Feae (26,947) - (26,9A7)

USTrusrce (lQ,393) ~ - ~ (10,393)

'yule ltefarrd pisbursrmnnt ji~j 7 8751 (T,87i).

Dotal Nan•Operating Bisbursements (45,214} - ~ ~ (45,214)

Cash Flow before Debt Repayment and Tranafen s (ts,ssiy S - S - S - S (15,531)

Tra~isFcrtoCG[[b) Ql,ZlS) (11,215)

Transfer to SWIG [c) (406,020) (406,020)

Net Cash Flow (4J4,8R7) - - (434,&81)

Closing Hook Balance S 53&,241 S - 4 Y S b,000 S 544,241

Outst~nd~ny Checks I 1 311 - _ 1-~•~ ~ ~

Jsnding Cash T3aluncc (Annk) F 54 ,$52 S S F ------ b.QQO S 555,SS2

Total Operating Uiabursemenla (3,883) - (2,121) - (6,004)

NomOpereting Aisburscmantc (A5,2t4) - - (45,214)

'Cransfera to CGI on AR Collection (11,215) (11,215)

Transfers to SWK nn AK Co1lec~ian (4U6,p20) (406,020)

Intercompany Transfers (2 121) Z• ~ 2 ~

Total Aisbursementa 8 f4b8,453) S $ ~ ~ (a68 dS3)

Nolwv:

(aj Payment m¢de to counterparty of an assumed executory contract pursuant to the terms of the Sale

(b] (Jnder the terms oPtha Sule, CCrI acquired a portion of accounts receivable (the "Pham~a AR") for which the vendors cominued to remit peyments into the Aebtor's bank account,

7'ha Debtor transferred such remittances ro CG[ in Nebruary The Aebtor will make future hansfers if additional remittances are received in respect of the Pharma AR purchased by CGi.

[cj Araom~t represent portion of die net proceeds from Gee Sata that is required to ba remitted to SWK Funding, LI,C pursua~ri to Urder Apptriving Slipularron Aulhurizing Use OJ

Cash Cnlinlerul Aenveen ~ebJnr Rarpansa C,anetias, lac. And SiYK Ptmding, (,/,C,' [Docket No. 247J

MOR(Ob/0~


In rc: Respopse Genetics, Inc. Case No, 15-11663 (LSS)

Debtor Reporting Periad: February 1 to February 29, 2016

MOR • 1 Continuation 36eetSchedule of Bank Account Balances

I~:ntit Bank hccount NnmLnr tvamcll't c Book $alance Bank f3»inare

Response Genetics, Inc. Stlicatr Vn11ey ~3ank Acct No. XXXO14; Operating Acct. ~ 538,241 ~ .SA9,552

Response Genetics, inc. Silicon Valley Bank Acct No. XXX0177 Payroll Acct. 0

Response Genetics, Inc. Silicon Valley Bank Acct No. XXX0919 Flex Spending Acct, - -

Responsc Genatics, Inc. Silicon Valley Bank Acct Na 7CxX3066 Depository Acct. 6,000 G,000

~ saa,zai s sss,ss2

Schedule of Disbursements

Current Month Cumulative

Disbursements by Aisburaemeuts for

Case # Debtor's Nnroe Eatity lat QTR ZQ16

tS-11663 (LSS) Response Genetics, Inc. 46&,453 $ 513,873

MOR~oaron


In re: Response Genetics, Inc.Chapter 11

Debtor Case No.: 15-11663 (LSS)

NiOR - 1 Continuation Sheet

Declaration Regarding the Cash Disburser eat Schedule

For period February 1 to February 29, 2016

Benjamin J. Matz hereby declares under penalty ofperjury:

1. Tam the Chief Restructuring Officer for Response Genetics, Inc., the above-captioned debtor and debtor-in-

possession (the "Debtor").

2. The Debtor submits this Declaration regarding cash disbursements in lieu of providing copies of the cash

disbursement schedule.

3. All statements in the Declaration are based on my personal knowledge, my review of the relevant

documents, or my discussions with Debtor`s employees. I am authorized to submit this Declaration on behalf of

the Debtor.

4. The Debtor has, on a timely basis, disbursed approximately $468,453 for post-petition and allowable pre-

petition amounts for the period February 1, 2Q 16 to February 29, 2016. Copies of the cash disbursement

schedules are available for inspection upon request by the Office of the United States Trustee.

Dated: 3/30f2016 Benjamin J. Matz, Chief Restructuring Officer

C

MOR

(04/07)


In re: Response Genetics, Inc.Chapter 1 I

Debtor CaseNo.: IS-11663 (I,SS)

MOR -1 a

Declaration Regarding the Bank Reconciliations

For period February 1 to February 29, 2016

Benjamin J. Matz hereby declares under penalty of perjury:

1. I am the Chief Restructuring Officer for Response Genetics, Inc., the above-captioned debtor and debtor-in-

possession (the "Debtor"). I am familiar with the Debtor's day-to-day operations, business affairs and books

and records,


documents, or my discussions with Debtor's employees. I am authorized to submit this Declaration on behalf of

the Debtor.

3. To the best of my knowledge, all of the Debtor's bank balances are reconciled in an accurate and timely

manner.

Dated: 3/3/2016 Benjamin J. Matz, Chief Restructuring Officer

MOR~oaio~>


Ia re: Response Genetics, Iac.

Debtor

Case No. 15-11663 (LSS)

Reporting Period; February 1 to February 29, 2016

MOR - lb

SCHEDULE OF PRQFESSCONAL FEES APtD EXPENSES PAID

This schedule is to include all retained professional payments from case inception to current month.

Amount Paid This Cumulative Amount

Period Paid

Professionals Fees and Expenses Fees and Expenses

Canaccord Genunity

Chipman Brown Cicero &Gale, LLP

Conway MacKenzie_

Epiq Bankruptcy Solutions, LLC

D, Gottlieb &Associates LLC

I Ialland &Knight

Levy, Small & L,allasPachulski Stang Ziehl &Jones LLPRust Qmni GroupSheppard, Mullins, Richter &Hampton LLP

Lal[a]

[a]I.al[a]

$ 579,065

11,092

31,219

19,998

15,000

20Q,005

38,908

650,000

23,000

175,000

$ 2,103,286

[a] $

21,947

5,000

$ 26,947

Note:

[a] Pursuant to a Court order authorizing the Debtor to obtain post-petition financing and authorizing the use of cash collateral [Docket No.

26], the Debtor transferred funds to a Pachulski Stang Ziehl &Jones Client 'Trust Account, an a weekly basis, the amount that the

professionals may be paid pursuant to a budget agreed to with the post-petition financing lender for such week. Such funds are being held

for the benefit of the profcssianals and applied to the fees and expenses of such professionals pursuant to one or more orders of the Court.

The amounts shown. reflect portions ofthe transferred funds attributed to the respective professionals.

MOR(04/07)


In rc: Response Genetics, Tnc. Case No. 15-11663 (LSS)

Debtor Reporting Period: February 1 to February 29, 2016

MOR - 2

STATEMENT (JF OPERATIONS [a]

~'or the Period February 1 to February 29, 2016

Operating expenses

General and administrative $ 6,004

Total operating expenses 6,004

Qperating loss (6,004)

Other income (expenses)

Reorganization expenses (17,993)

Other

Net income / (loss) $ (23,997)

Note:[a] As detailed in the General Notes, the Debtor closed an asset sale transaction with Cancer Genetics, Inc, in October 2015.

7'he Debtor

is in the process of finalizing the amount of gains or losses to be recognized in the sale, including amounts of income from

cancellation of indebtedness; the currently reported results are subject to material adjustrnants.

MQR(OA/07)


In re: Response Gegetics, Inc. Case No. IS-11663 (LSS)

Debtor Reporting Period: February 1 to February 29, 2016

MOR-3BALANCE SHEET [a]

As ~f February 29, 2U16

ASSETSCurrent assetsCash and cash equivalents $ 544,241

Accounts receivable, net 995,571

Total current assets 1,539,812

Other assetsTotat assets $ 1,539,812

LIABILITIES AND STQCKHOLDERS' DEFICIT

Current liabilitiesAccounts payable $ 7,455

Accrued expenses 12,350

Total current liabilities 19,805

Liabilities subject to compromiseAccounts payable 2,2Q8,596

Total liabilities subject to compromise 2,208,596

'I'otalliabilities $ 2,228>hp~

Stockholders' deficit:Common stock $ 3&g~~~~Additional paid-in clpital 78,G78,425

Accumulated deficit (79,755,023)

Total stockholders' defleit ~ ~~H$~5$8)

'Total liabilities and stockholders' deficit $ 1,539,812

Note:[a] Pursuant to tUe Sale, as more fully described in the General Notes, certain assets and liabilities have been sold to snd assumed by the Buyer.

F-Iowever, the Debtor and the Suyer are continuing to reconcile these assets and liabilities amounts aid will adjust accordingly.

Mt~R(04/p7)


Ip re: Response Genetics, Inc.

Debtor

Case No. 15.11663 (I.SS}

Reporting Period. February 1 to February 29, 2016

MOR - 4

SUMMARY QF UNPAID POSTPETITION DEBTS

Amount

Current

Past Due 1-30

Past Due 31-b0

Past Due 61-90

Past Due Over 90

$ 7,455

Total Gross Accounts Payable $ 7,455

M08{04/Q7)


In re: Response Genetics, Inc.Chapter 11

Debtor Case No.: 15-11663 (LSS)

MOR - 4

Declaration Regarding Status of Postpetition Taxes

For the Period February 1 to February 29, 2016

Benjamin J. Matz hereby declares under penalty of perjury:

l . I am the Chief Restructuring Officer for Response Genetics, Inc, the above-captioned debtor and debtor-

in-possession (the "Debtor"). I am familiar with tha Debtor's day-to-day operations, business affairs and

books and records.


documents, or my discussions with Debtor's employees. I am authorized to submit this Declaration on behalf

of the Debtor.

3, To the best of my knowledge, the Debtor has filed all necessary federal, state and local tax returns and

made all required past-petition tax payments in connection. therewith on a timely basis or have promptly

remedied any late filing or payments that may have occurred due to unintentional oversight.

Dated: ~/3(~/2t}l6 Benjamin J. Matz, Chief Restructuring Officer

t'`"" C.

MOR~oaio~~


In re. Response Genetics, Inc. Case No, 15-11663 (LSS)

Debtor Reporting Period: Febroary I to February 29, 2016

MOR-5

ACCOUNTS RECEIVABLE AGING

Currant$

1 - 3Q t{~4~s ~t due

31-fi0 tit~1's itst dt~e

61-90 dik fs rest due

Ovvt ~JO d;~~~s ~>a4t due4,A99,362

Tousi Gross Accounts Receivable

Less: allowance for doubtful accounts, reserves, and returns

~ 4,499,3C>2

{3,503,791

Accounts Recciw3b3e (ls~t)~ 995,571

DEBTOR QUESTIONNAIRE

i, Have any assets been sold or transferred outside the normal course o~businessX

this ra{x,rting periad? If yns, pr~viela ati uKpisna1ian below.

2. Have any fwids been disbursed from any account other than a debtor in possession X

account this rC~x3rting Gfctiod? !f yes, provide. an cxplanutian below.

.3. Have all postpefition tax returns been timely filed? If no, provide an explanationX

below.

A, Are workers compensation, general liability and othor necessary iusutanceX

coverages io ~ffact? If'ao, provide An explanation below;

S, Ftas any bank account been opened during the reporting period9 Tf yes, provide

documentation identifying the opened account(s). ]f an inveFtment account has been opened X

provide the required documentation pursuant to the Delaware Locnt Rute 4001-3.

MORtnaio~


1N THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

Chapter 11In re:

Case No. 15-11663 (LSS)RESPONSE GENETICS, INC., ~

Debtor,

AFFIDAVIT OF SERVICE

STATE OF DELAWARE )ss:

COUNTY OF NEW CASTLE )

Kathleen Forte Finlayson, being duly sworn according to law, deposes and says that she

is employed by the law firm of Pachulski Stang Ziehl &Jones LLP attorneys for the Debtor in

the above-captioned action, and that on the30th day of March 2016 she caused a copy of the

following documents) to be served upon the parties on the attached service lists in the manner

indicated:

Monthly Operating Report for Response Genetics, Inc. for February 2016

G~~~,~~-1 a° ~IK Teen Forte Finla on

o to aril Subscribed beforeone s ~3C1~" ~iay o~ March 2016

~~~N BOWER

ota~-y'P~~l:z PUBLIC

Cc~mmassiai~'~xp.: STATE OF DELAWAREOctober 1Q, 2016

ROCS Dl::'105545.1 73845/002

' The last four digits of the Debtor's tax identification number are: (5548). The location of theDebtor's headquarters and service address is 1640 Marengo St., 7th Floor, Los Angeles, CA 90033.

Case 15-11663-LSS Doc 373-1 Filed 03/30/16 Page 1 of 3

Response Genetics Core&Fee App Service ListCase No. 15-11663 (LSS)Document No. 2045952 —Interoffice Mail4 —Hand Delivery4 —First Class Mail

(Counsel to the Debtor)James E. O'Neill, EsquirePachulski Stang Ziehl &Jones LLP919 N. Market Street, 17th FloorWilmington, DE 19801

INTEROFFICE MAIL(Counsel to the Debtor).ieffrey N. Pomerantz, EsquireIra D. Kharasch, EsquirePachulski Stang Ziehl &Jones LLPl OIOQ Santa Monica Boulevard, 13th Floor

Los Angeles, CA 90067

INTEROFFICE MAIL(Counsel to the Debtor)John W. Lucas, EsquirePachulski Stang Ziehl &Jones LLP150 California Street, 15th FloorSan Francisco, CA 94111

HAND DELIVERY(United States Trustee)Linda Casey, EsquireOffice of the United States TrusteeJ. Caleb Boggs Federal Building, Suite 2207844 King StreetLockbox 35Wilmington, DE 19801

HAND DELIVERY(Counsel to Silicon Valley Bank ("SVB'))William E. Chipman, Jr, EsquireChipman Brown Cicero &Cole, LLP1313 N. Market Street, Fifth FloorWilmington, DE 19801

HAND DELIVERY(Counsel to the Official Committee ofUnsecured Creditors)Frederick B. Rosner, EsquireJulia B. Klein, EsquireThe Rosner Law Group LLC824 Market Street, Suite 810Wilmington, DE 19801

HAND DELIVERY(Counsel to SWK Funding LLC)Neil B. Glassman, EsquireScott D. Cousins, EsquireEvan T. Miller, EsquireBayard, P.A.222 Delaware Avenue, Suite 900Wilmington, DE 19801

FIRST CLASS MAIL(C'ounsel to the Official Committee ofUnsecured Creditors)Carren B. Shulman, EsquireSheppard, Mullin, Richter &Hampton LLP30 Rockefeller PlazaNew York, NY 10112

FIRST CLASS MAIL(Counsel to the Official Committee of

Unsecured Creditors)Ori Katz, EsquireSheppard, Mullin, Richter &Hampton LLP

Four Embarcadero CenterSeventeenth FloorSan Francisco, CA 94111

FIRST CLASS 1V~AIL(Counsel to Silicon Valley Bank ("SVB'))Leo D. Plotkin, EsquireLevy, Small & Lallas815 Moraga DriveLos Angeles, CA 90049


FIRST CLASS MAIL(Counsel to SWK Funding LLC)Robert W. Jones, EsquireBrian J. Smith, EsquireHolland &Knight200 Crescent Court, Suite 1600Dallas, TX 75201


Documents

Case 15-11663-LSS Doc 373 Filed 03/30/16 Page 1 of 12 15-11663-LSS Doc 373 Filed 03/30/16 Page 1 of 12 In re: Response Genetics, Inc. Case No,: 15-11663 (LSS) Reporting Period: February