Vi-Jon - Chapter 11 Case Summary

Business Description

With a service address of 8800 Page Ave., St. Louis, MO, Vi-Jon, LLC ("Vi-Jon" or the "Debtor") sells private-label dry bath products consisting of Epsom salts and body powder to major retailers across the United States, having serviced major customers such as Amazon, Dollar General, Kroger, TopCo, and Walgreens (collectively, the "Customers").

• The Debtor leverages shared-services and co-manufacturing agreements with its non-Debtor affiliates (the "Non-Debtor Affiliates") for sourcing, manufacturing, packaging, testing, quality control, and distribution of its products.
• The Debtor owns one non-operational manufacturing plant in St. Louis, Missouri (the "Etzel Property").

The Debtor is a wholly-owned and privately held subsidiary of Emprise HPC, LLC ("Emprise HPC"), which in turn is a wholly-owned and privately held subsidiary of Emprise Group, Inc. ("Emprise"). The Debtor does not have any subsidiaries.

Financial Performance

• The Debtor recorded total annual net sales of approximately $26 million in 2025 and expects sales of approximately $21 million in 2026 due to the loss of a significant portion of body powder sales.
• The Debtor generated approximately $700,000 of EBITDA in 2025, adjusted for litigation costs, settlements, and other one-time costs, and expects approximately $300,000 of Adjusted EBITDA in 2026, primarily driven by lower sales.
• The Debtor's 2026 plan contemplates the growth of higher-margin Epsom salt product offerings, leading to improved gross margin as compared to 2025.

Workforce

• As of the Petition Date, the Debtor employs one full-time salaried employee (the "Employee"), who serves as Vice President and General Manager, and one independent contractor (the "Independent Contractor").
  • The Employee is responsible for overseeing the Debtor's profit-and-loss performance, developing growth strategies and identifying market opportunities, coordinating manufacturing optimization between the Debtor and its Non-Debtor Affiliates, supporting sales and digital marketing initiatives, advancing brand development, managing projects, analyzing business data, and conducting market research.
  • The Independent Contractor's role is limited and specifically tailored to support the Debtor's defense and administration of Talc-Related Claims and litigation, assisting the Debtor and its counsel with matters requiring institutional knowledge of the Debtor's historical products, operations, and records.

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Corporate History

The Debtor began its operations in 1908 as the Peroxide Specialty Company ("PSC"). By 1933, PSC had expanded its operations, rebranded as Vi-Jon Laboratories Inc. ("Vi-Jon Laboratories"), and founded a line of cosmetics. By 1944, the company had over 70 employees and sales exceeding $1.1 million (approximately $20.6 million in 2026 dollars).

Pivot to Private Label and the Cumberland Swan Merger

• In the 1960s, retail stores such as the F.W. Woolworth Company began stocking their own private brand products, and Vi-Jon Laboratories capitalized on the opportunity to become the manufacturer of such private-label cosmetic and personal care products.
• Over the next decade, Vi-Jon Laboratories switched its focus to production for a variety of retail chains, producing private-label products rather than a single "Vi-Jon" labeled product.
• In 2006, Berkshire Partners LLC ("Berkshire") obtained a controlling interest in the company. Following this acquisition, in July 2006, Vi-Jon Laboratories merged with Cumberland Swan Holdings, Inc. ("Cumberland Swan"), a Tennessee-based private brand manufacturer, to become Vi-Jon, Inc., a subsidiary of VJCS Holdings, Inc. ("VJCS Holdings").
  • The transaction allowed the business to double in size, and in the following years Vi-Jon, Inc. grew to five manufacturing and distribution centers in St. Louis, Missouri and Smyrna, Tennessee.
  • Cumberland Swan's talc liability dates back to its 1999 purchase of certain assets and business from Perrigo Co. As part of the merger, Vi-Jon Laboratories became responsible for Cumberland Swan's talc liabilities.

The 2020 ESOP Transactions

• In 2020, Berkshire consummated a series of transactions that ultimately ended in the sale of the company to the Vi-Jon Employee Stock Ownership Plan (the "ESOP," and the related transactions, the "ESOP Transactions").
• Following consummation, VJCS Holdings became Vi-Jon Holding, Inc. ("Vi-Jon Holding"), a 100% employee-owned entity, while Vi-Jon, Inc. became Vi-Jon, LLC, which remained a subsidiary of Vi-Jon Holding and is the Debtor in this Chapter 11 Case. The shift to an employee-owned entity did not materially affect the company's business operations, and the Debtor's ultimate corporate parent is still owned by the ESOP.

The 2023 Restructuring Transaction

In 2023, the Vi-Jon Holding enterprise, with the help of its former counsel, began exploring a strategic internal reorganization (the "2023 Restructuring Transaction") to (a) better align its organizational structure with each of its product lines—private brand liquid fill household and personal care products, private brand dry bath products, and branded products such as Germ-X hand sanitizer—and (b) begin to manage the mounting alleged talc-related liabilities faced by Vi-Jon, LLC.

• As part of the transaction, the parent company of the enterprise, Vi-Jon Holding, was renamed Emprise. The Debtor's affiliate, Vivos Holdings, LLC ("Vivos"), was formed in June 2023, and its subsidiaries became the home of the liquid and branded product lines.
• On December 3, 2023, the Debtor and Vivos entered into a Contribution Agreement (the "Contribution Agreement"), pursuant to which the Debtor transferred to Vivos its assets and liabilities not related to its dry goods business. Vivos in turn distributed certain of the assets to its subsidiaries, while Vi-Jon, LLC continued to maintain its pre-existing private brand dry goods lines of business.
• Because the Contribution Agreement provided that the Debtor was to retain all liabilities related to the dry goods business, including alleged talc-related liabilities, on December 28, 2023, Emprise HPC (f/k/a Intermediary HoldCo, LLC) and the Debtor entered into a Limited Contribution Agreement (the "Keepwell Agreement").
  • Pursuant to the Keepwell Agreement, Emprise HPC agreed, subject to certain conditions being met, to make equity contributions to the Debtor upon receipt of a qualifying capital call, in an amount determined by projected liquidity shortfalls, up to $25 million (the "Keepwell Obligations").
  • The Keepwell Agreement was intended to provide a source of funding for the Debtor's anticipated talc-related liabilities as it continued to operate the dry goods business and was sized based upon a third-party consultant's forecast of talc-related liabilities.
• In connection with the 2023 Restructuring Transaction, the Debtor also entered into various intercompany agreements with Emprise, Vivos, and certain of the Debtor's other Non-Debtor Affiliates, including two administrative services agreements and a co-manufacturing agreement.

Subsequent Affiliate Activity

• In August 2025, Vivos, the parent entity of Consumer Product Partners, LLC ("CPP"), acquired Nice-Pak Products, LLC ("Nice-Pak"). In November 2025, Vivos initiated a process to integrate certain of its subsidiary entities, including CPP, into the U.S. operations of Nice-Pak, and on January 1, 2026, the integrated subsidiaries began operating as a unified business under the Nice-Pak brand name.
• According to the Debtor, this acquisition and internal restructuring are unrelated to the Debtor and are referenced solely for completeness of understanding with respect to the Debtor's corporate organizational chart.

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Operations Overview

Following the 2023 Restructuring Transaction, the Debtor has continued to operate its private brand dry goods business, with product offerings primarily focused on Epsom salts and body powders, although it continues to develop additional product offerings. The Debtor leverages the shared services and co-manufacturing agreements for the sourcing, manufacturing, packaging, and distribution of its dry goods products.

• The Debtor sells primarily to large retailers and has a concentrated customer base; in 2024 and 2025, the Debtor's two largest customers accounted for nearly 50% of the Debtor's net sales.
• The vast majority of the Debtor's customers also maintain commercial relationships with certain of its other Non-Debtor Affiliates for other unrelated products.

Epsom Salt

• The Debtor's Epsom salt products are its most profitable product line, representing approximately 65% of the Debtor's total annual net sales in 2024-2025. The Debtor plans to continue to expand this business and is currently pursuing additional customers and considering broadening its Epsom salt product offerings.
• The Debtor sells its Epsom products directly to its retail customers but relies on its Non-Debtor Affiliate Nice-Pak to manufacture and package the product. Pursuant to the Co-Manufacturing Agreement, Nice-Pak procures raw, bulk magnesium sulfate and then converts it into finished Epsom salt goods.
  • Nice-Pak charges the Debtor per-unit costs, including selling, general, and administrative expenses, as well as a 12.5% co-manufacturing fee on Epsom salt products.
  • Once manufactured and packaged, the finished product is shipped to Nice-Pak's distribution center, at which point title transfers to the Debtor. The Debtor then sells such products to its customers, Nice-Pak manages the shipments, and the Debtor incurs a pass-through freight charge based on the weight of the product.

Body Powder

• The Debtor generated approximately $2.4 million in quarterly net sales from the sale of body powder over 2024-2025. However, in October 2025, the Debtor lost a significant portion of its body powder sales, resulting in an anticipated reduction of approximately $1.7 million per quarter in sales from the line.
  • The lost business had previously accounted for approximately 28.4% and 22.6% of the Debtor's annual net sales in 2024 and 2025, respectively.
  • Net sales of the Debtor's body powder products declined from approximately $2.1 million in the first quarter of 2025 to approximately $662,000 in the first quarter of 2026, and 2026 body powder revenue is projected to be under $1 million per quarter.
• As with its Epsom salt products, the Debtor sells body powder products directly to its retail customers but relies on Nice-Pak to support procurement and logistics. Nice-Pak sources fully finished and packaged goods from a third-party supplier on behalf of the Debtor, which are then shipped to a Nice-Pak distribution center, where title transfers to the Debtor.
  • Nice-Pak coordinates outbound shipments to the Debtor's customers, and the Debtor incurs pass-through freight charges based on the weight of the product.
  • Nice-Pak charges the Debtor per-unit costs, including selling, general, and administrative expenses, but does not charge any co-manufacturing fees with respect to the body powder products because they are procured in finished form from third-party manufacturers.

Shared Services Agreements

Following the 2023 Restructuring Transaction, the Debtor entered into contractual manufacturing and support relationships necessary to operate its business, including procuring or purchasing raw materials, manufacturing products, paying certain taxes and utilities, arranging employee benefit programs, and maintaining the insurance policies that cover the Debtor. The Debtor relies on Vivos, Emprise, and Nice-Pak to provide these and other services under the Shared Services Agreements.

• Vivos Administrative Services Agreement: Entered into on December 3, 2023, and amended on December 28, 2023, August 13, 2025, and June 9, 2026, the agreement provides for general management, human resources, finance and accounting, order processing, information technology, utility services, legal and regulatory compliance, and ancillary services, as well as coordinating and paying for certain utilities, insurance, and taxes at the Etzel Property.
  • The Debtor and Vivos negotiated a fee of approximately $572,000 for Vivos' services in 2026 (the "Vivos Administrative Fee"), which is annually renegotiated based on the expected costs of such services and the Debtor's relative proportion of expected net sales across the Debtor's and Non-Debtor Affiliates' product lines. The fee is not subject to reconciliation based on the actual costs of such services.
  • The Debtor also reimburses Vivos for any direct costs Vivos incurs on the Debtor's behalf, including insurance, taxes, utilities, employee health benefits, and vendor payments. Property insurance across the business enterprise is paid on an aggregated basis across properties and is maintained by Emprise and paid for by Vivos; with respect to the Etzel Property, it constitutes part of the fixed overhead charge under the Co-Manufacturing Agreement, and the Debtor estimates that the Etzel Property comprises approximately $5,000-5,500 of annual premiums. Sales and use taxes and real and personal property taxes are generally administered and paid by Vivos on the Debtor's behalf, while consolidated income, franchise, margin, or similar taxes are generally administered by Emprise but ultimately paid by Vivos. Property taxes on the Etzel Property in 2025 were $17,095.34, with a similar annual cost anticipated for 2026, and the Debtor is charged approximately $1,500 per month by Vivos on account of such taxes.
  • Because Emprise is ultimately owned by a trust pursuant to an employee stock ownership plan, Emprise and its affiliates, including the Debtor, operate on a pass-through basis for federal income tax purposes and do not directly incur federal income taxes, with similar treatment afforded under the vast majority of state income tax regimes. The Debtor incurs de minimis franchise, margin, and excise taxes and LLC fees at the state level in an annual amount of approximately $7,000.
• Emprise Administrative Services Agreement: Entered into on December 3, 2023 and amended on December 28, 2023, the agreement provides for corporate governance and secretarial services, risk management, employee benefits, and consolidated-tax and related services.
  • The Debtor is not charged an annual fee by Emprise for these services; instead, Vivos pays the amounts associated with these services, which are reconciled through the intercompany reconciliation process. As of the Petition Date, the Debtor does not believe any amounts are outstanding and payable pursuant to the Emprise Administrative Services Agreement.
  • The Insurance Program is charged to the Debtor at cost, while the Workers' Compensation Program and the employee benefit program, and their related administrative costs, are charged to the Debtor as a fee equal to 21% of the Employee's gross payroll (the "Gross Payroll Fee"). The Gross Payroll Fee is billed by Vivos, constitutes a direct cost under the Vivos Administrative Services Agreement, and is not included in, or covered by, the fixed annual fee charged to the Debtor thereunder.
• Co-Manufacturing Agreement: Entered into on December 3, 2023 with CPP (as predecessor-in-interest to Nice-Pak) and amended on December 28, 2023, August 13, 2025, and June 9, 2026, the agreement provides the operational framework through which Nice-Pak supports the Debtor's dry goods business, including sourcing, production, manufacturing, packaging, warehousing, logistics, customer service, and sales support.
  • Nice-Pak charges the Debtor an annual fee of $400,000 for sales, customer service, sales support, research and development, and related services, renegotiated annually by the Debtor and Nice-Pak on an arm's-length basis.
  • Nice-Pak also charges the Debtor for certain direct costs associated with sourcing, production and manufacturing, direct labor, and order processing, including variable overhead equal to $0.115 per unit, fixed overhead equal to $0.082 per unit (applicable to Epsom salt products only), and distribution equal to $0.043 per unit. A portion of the fixed overhead costs are attributable to certain of the policies included in the Insurance Program.
  • In addition, the Debtor pays a contract manufacturing fee of 12.5% of the product cost of Epsom salt products. All charges accrued between the Debtor and Nice-Pak are settled through the intercompany reconciliation process.
• Pursuant to the Shared Services Agreement Motion, the Debtor seeks authority to continue operating under the Shared Services Agreements and to pay amounts arising thereunder in accordance with the reconciliation procedures in an aggregate amount of no more than $2,000,000 during the Interim Period, and to pay prepetition amounts solely to the extent such amounts relate to employee wages, employee benefits, or the Workers' Compensation Program.

According to the Debtor, the Shared Services Agreements are critical to the success of its business and, particularly, to its smooth transition into chapter 11. Vivos, Emprise, and Nice-Pak provide economic and operational benefits by allowing the Debtor to use existing enterprise systems and affiliate expertise rather than duplicating procurement, manufacturing, logistics, customer-service, finance, accounting, tax, insurance, benefit, utility, and administrative infrastructure, and any disruption to these arrangements could severely disrupt the Debtor's operations.

Cash Management

• The Debtor's bank accounts are maintained at Bank of America, N.A. and East West Bank. The Cash Management System consists of four bank accounts: two operating accounts, a receivables account, and an inactive account with a zero balance.
• The Debtor estimates that, as of the Petition Date, it has approximately $1,650,000 in cash on hand, and pays the Cash Management Banks an aggregate of approximately $2,100 per month in Bank Fees.
• Separately, Omni maintains two segregated accounts at East West Bank that are not part of the Cash Management System (the "Carve-Out Accounts"). Pursuant to the Amended Keepwell Agreement and the Budget, the Carve-Out Accounts will receive certain amounts upon entry of the Interim Cash Management Order and on a weekly basis thereafter, earmarked and set aside for the professionals retained by the Debtor, any official committee of unsecured creditors, and the FCR, as well as for fees payable to the Clerk of the Court and the U.S. Trustee pursuant to 28 U.S.C. § 1930(a). Once set aside, the Carve-Out Amounts will not be deposited into or commingled with any of the Debtor's Bank Accounts.
• The Debtor relies on the Cash Management System to conduct Intercompany Transactions with certain Non-Debtor Affiliates in the ordinary course, including on account of customer receipts collected by Non-Debtor Affiliates that include amounts attributable to the Debtor's goods; shared-services fees, direct costs, taxes, utilities, insurance, employee benefits, manufacturing, logistics, freight, raw-materials, and overhead expenses paid or administered by Non-Debtor Affiliates and reimbursed by the Debtor; and reimbursements and settlement payments among the Debtor and the Non-Debtor Affiliates.
  • In addition to limited customer payments directly collected by the Debtor, certain customer receipts for joint customers or consolidated invoices are collected into Vivos' accounts, and the Debtor-attributable portion is identified through stock-keeping unit ("SKU") level and profit-center information and reconciled through the intercompany reconciliation process, including through netting against amounts the Debtor owes to the applicable Non-Debtor Affiliates.
  • Historically, the Debtor and its Non-Debtor Affiliates closed their books based on a 5-4-4 retail calendar, resulting in 13-week quarters and generally a 52-week fiscal year. While this reconciliation allowed the parties to record activity, identify and correct discrepancies, and maintain accurate intercompany balances, cash settlement generally occurred only in connection with true-ups, which occurred from time to time and most recently in December 2025.
  • As of the Petition Date, the Debtor implemented an updated intercompany reconciliation process under which postpetition activity is reconciled and settled more frequently, through weekly cash remittances rather than from time to time. At the close of each week, the Debtor and its Non-Debtor Affiliates reconcile postpetition customer receipts, shared-services charges, affiliate-paid costs, direct costs, reimbursements, and other Intercompany Transactions; the weekly reconciliation is completed by the following Thursday and the resulting net balance is settled by cash remittance the following Friday, with a final monthly reconciliation following each month-end close to resolve any discrepancies. Any intercompany balance outstanding as of the Petition Date will be frozen and excluded from the postpetition reconciliation and settlement process.

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Prepetition Obligations

The Debtor does not have any secured debt and does not contemplate obtaining any postpetition financing, instead intending to fund its operations and this Chapter 11 Case through a combination of cash on hand, cash receipts, and equity funding from its affiliates. The Debtor's prepetition obligations are summarized below.

Intercompany Indebtedness

• Intercompany Promissory Note: Dated December 3, 2023, by and among the Debtor, Vivos, and VH Finance, LLC ("VH Finance"), pursuant to which each party acts as both borrower and lender to each other party with respect to intercompany advances, with the outstanding principal balance reflecting the aggregate amount of advances outstanding from time to time.
  • As of July 25, 2026, the balance owing by the Debtor under the note is $1,460,000.
  • Any amounts currently owed by the Debtor with respect to the intercompany reconciliation process are, in the aggregate, reflected in that net balance, including approximately $286,000 the Debtor estimates is outstanding and payable pursuant to the Vivos Administrative Services Agreement as of the Petition Date.
• Intercompany Advance Agreement: Effective as of September 5, 2024, by and between Emprise and the Debtor, as amended by a First Amendment dated September 5, 2025, under which Emprise advanced $675,000 to the Debtor.
  • Repayment is required upon the earlier of the closing of the sale of the Etzel Property and September 5, 2026, unless further extended by agreement of the parties.
  • The advance is secured by, and repayable from, the proceeds of the sale of the Etzel Property, though Emprise's security interest in the property sale proceeds has never been perfected and, as of the Petition Date, remains unperfected.

Prior to the Petition Date, the Debtor and its advisors undertook an evaluation of all intercompany reconciliations occurring after the 2023 Restructuring Transaction, which showed that the Debtor and its Non-Debtor Affiliates conducted intercompany reconciliation monthly and remitted cash payments from time to time to settle intercompany balances.

• Because Vivos collects and holds cash receivables for the Debtor's products on the Debtor's behalf, Vivos uses the intercompany reconciliation process to offset the cash it holds from the contractual obligations owed by the Debtor to its Non-Debtor Affiliates under the Shared Services Agreements.
• Accordingly, any payments made by Vivos to the Debtor pursuant to the process are simply a remittance of funds that already comprise part of the Debtor's estate, while reconciliation payments flowing from the Debtor to its Non-Debtor Affiliates resolve outstanding amounts owed under the Shared Services Agreements, net of any cash amounts held by Vivos on the Debtor's behalf.

Trade Debt

• The Debtor does not contract directly with vendors in connection with the manufacturing and sale of its dry goods products. Through the Shared Services Agreements, the Debtor pays its Non-Debtor Affiliates as contractually required and, in turn, any third-party vendors are contracted with and paid by Vivos, Emprise, or Nice-Pak, as applicable.
• As of the Petition Date, the Debtor does not have any accrued outstanding third-party trade accounts payable.
• The Debtor is responsible for security and utility expenses for the Etzel Property, which are paid by Vivos and reimbursed by the Debtor; as of the Petition Date, no such expenses are outstanding.

Other Outstanding Unsecured Obligations

In addition to the ongoing talc-related litigation, as of the Petition Date the following outstanding unsecured obligations have been asserted against the Debtor, as to which the Debtor reserves all rights:

• Settlements and judgments relating to the ongoing litigation of Talc-Related Claims, including aggregate liabilities of approximately $20 million related to litigation judgments, including the Heyer and Ludwig judgments.
• Certain retailer indemnification claims, including disputed, contingent, and/or unliquidated claims, in an aggregate amount of approximately $15 million.
• Other unsecured claims, comprised of non-restructuring professional fees, in an aggregate amount of approximately $2 million.

Employee and Administrative Obligations

• The Debtor does not owe any prepetition amounts on account of Key Personnel Compensation, Withholding Obligations, or Payroll Processing Fees, though such amounts will come due during the pendency of the case. No ESOP Obligations are earned and unpaid as of the Petition Date, and the Debtor does not expect to incur any ESOP Obligations on account of the Employee during the pendency of the Chapter 11 Case.
• During the three-month period before the Petition Date, the Debtor incurred a monthly average of approximately $2,000 on account of Reimbursable Expenses and estimates that it owes approximately $2,000 of Reimbursable Expenses as of the Petition Date.
• In the aggregate across all such categories, the Debtor estimates that obligations coming due within approximately the first thirty days following the Petition Date will not exceed $40,000, and that total obligations coming due during the pendency of the Chapter 11 Case will not exceed $150,000. The relief sought for the prepetition Employee Obligations reflects the priority amount cap.
• As of the Petition Date, the Debtor does not believe it owes any prepetition, unpaid Bank Fees, and estimates that $2,250 will become due and payable within thirty days of the Petition Date.

Affiliate Credit Facilities

• Vivos and certain of the other Non-Debtor Affiliates are party to (a) an Amended and Restated Credit Agreement, dated August 13, 2025, by and among Vivos and certain of its subsidiaries, VH Finance, and Bank of America, N.A. (the "RCF Agreement"), (b) a Credit and Guaranty Agreement, dated as of August 13, 2025, by and among Vivos and certain of its subsidiaries, VH Finance, Loan Admin Co LLC, and certain lenders (the "1L Credit Agreement"), and (c) a Second Lien Credit and Guaranty Agreement, dated as of August 13, 2025, by and among Vivos and certain of its subsidiaries, VH Finance, TCW Asset Management Company LLC, and certain lenders (the "2L Credit Agreement," and together with the foregoing, the "Vivos Loan Documents").

Insurance Coverage

• The Debtor has substantial historical insurance coverage that it believes is available to respond to the Talc-Related Claims. From 1965 through October 31, 2016 (other than a gap period from April 1, 1971 through May 19, 1977), the Debtor or its predecessors purchased over $900 million of general liability, products liability, and umbrella insurance providing defense and indemnity coverage (the "Vi-Jon Policies").
  • The overwhelming majority of the Vi-Jon Policies are occurrence-based policies, generally providing coverage for bodily injury or other covered events that occur during the policy period.
  • The Debtor also has rights as successor by merger under insurance policies purchased by Cumberland Swan from July 31, 1999 through July 31, 2006 (the "Cumberland Swan Policies," and collectively with the Vi-Jon Policies, the "Policies").
  • The aggregate limit of Policies from 1965 through October 31, 2016 issued by insurers who are currently solvent is approximately $900 million. Certain Policies may be exhausted in whole or in part as a result of prior payments made by the insurers, and many of the general liability and umbrella Policies contain self-insured retentions varying from $0 to $25,000, depending on the terms of the particular Policy.
  • The Debtor has continued to purchase general liability, umbrella, and excess policies from November 1, 2016 through today; however, those policies contain explicit exclusions for products liability arising out of talc products.

Customer Indemnification Agreements

• The Debtor is party to certain indemnification agreements with certain of its Customers (the "Customer Indemnification Agreements"). Though the exact terms vary from agreement to agreement, they generally provide that the Debtor must defend, indemnify, and hold harmless the relevant Customers from any and all claims, liabilities, losses, and costs, including attorneys' fees, arising in whole or in part from any products sold by the Debtor to the Customers.
• Customers have alleged indemnification claims against the Debtor both on a contractual basis and on a common law basis. Depending on the nature of the claim, the Debtor and the Customer will often cooperate on the defense, in certain cases retaining the same counsel and in others retaining separate counsel. In certain circumstances, the Debtor disputes that a Customer is entitled to indemnification and does not indemnify the Customer.

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Events Leading to Bankruptcy

According to the Debtor, the primary purpose of this Chapter 11 Case is to address and comprehensively resolve the talc-related claims asserted against the Debtor (the "Talc-Related Claims") by implementing the global settlement embodied in the Restructuring Support Agreement. The Debtor vigorously disputes all talc-related liabilities and maintains that its talc products were safe; however, the unexpected and unforeseen massive increase in Talc-Related Claims that began in 2024 and the expenses associated with defending and settling talc-related litigation, coupled with recent adverse verdicts, have overwhelmed the Debtor, rendering the costs of continued litigation and settlement unsustainable to its continuing operations.

Shifting Market Dynamics and Customer Losses

• The Debtor has faced an overall decline in customer demand with respect to its body powder business, largely due to the loss of a key customer in October 2025. Though the Debtor hopes to mitigate this impact over time by focusing on its more profitable Epsom salt business, this loss has contributed to near-term liquidity constraints.
• Since the 2023 Restructuring Transaction, the Debtor has faced a myriad of financial challenges including shifting market dynamics and customer losses. However, the greatest catalyst for the Debtor's current strained liquidity position and the need to commence this Chapter 11 Case was the unexpected and unforeseen increase in Talc-Related Claims that began in 2024.

Overview of Talc-Related Claims

• Historically, plaintiffs have generally asserted two types of Talc-Related Claims against the Debtor: claims alleging ovarian cancer arising as a result of talc exposure (the "OC Claims") and claims alleging respiratory cancers or other asbestos-related diseases arising as a result of exposure to contaminated talc (the "Mesothelioma and Lung Cancer Claims").
  • As of the Petition Date, there are no alleged OC Claims and 367 alleged Mesothelioma and Lung Cancer Claims pending against the Debtor. The Debtor is currently named in 367 active litigation cases, 356 of which involve allegations of mesothelioma and 11 of which involve allegations of lung cancer allegedly caused by exposure to the Debtor's historical talc products.
  • Plaintiffs historically asserting OC Claims generally allege that they developed ovarian cancer or other gynecological diseases as a result of their use of the Debtor's talc products for feminine hygiene purposes, while plaintiffs asserting Mesothelioma and Lung Cancer Claims generally allege non-ovarian cancer personal injuries based on contaminated talc exposure. A minority of the latter have alleged, in addition to exposure to the Debtor's talc products, work-related asbestos exposure through their own or a family member's work history.
  • The Debtor believes that its talc was safe, that the claims are without medical or scientific merit, and that exposure to its talc products has not caused any personal injuries. During the time the Debtor manufactured and sold talc products, it received certificates of analysis from its raw talc suppliers for each batch of talc purchased, which indicated that no asbestos was detected in any of the talc purchased.

NERA Liability Forecasts

In connection with the evaluation of the potential scope of the Debtor's retained liabilities and the sizing of the Keepwell Agreement, and prior to the consummation of the 2023 Restructuring Transaction, the Debtor retained NERA Economic Consulting ("NERA") to prepare a liability forecast with respect to the Debtor's exposure to talc-related litigation. NERA prepared a series of liability forecasts between June 2020 and June 2023, culminating with the 2023 Liability Forecast, and a further updated forecast in May 2026.

• NERA analyzed the Debtor's historical talc business and calculated the Debtor's potential talc-related liabilities beginning in 1963 through the time that the Debtor permanently discontinued the production and sale of talc products in 2016; the Debtor had also temporarily discontinued the sale of talc from 1995 through August 1999.
  • For most of the period in which the Debtor was engaged in the sale of talc products, the Debtor had relatively minimal sales. Talc sales peaked in 2003 with approximately 20 million units sold, after which the Debtor saw a steady year-over-year decline until discontinuation in 2016. Based on historical sales data, the Debtor's average market share for talc products between 1975-2015 was 13.2%.
• The 2023 Liability Forecast analyzed the Talc-Related Claims filed against the Debtor based upon the filing and dismissal rates and average settlement amounts of such claims in 2023, and NERA believed the Debtor would experience a steady state with respect to future filing and dismissal rates and settlement amounts. NERA concluded that the Debtor had de minimis exposure to ovarian and lung cancer claims, with primary exposure arising from mesothelioma claims, and estimated exposure using two filing-rate scenarios:
  • Based on filing trends for non-occupational mesothelioma claims against the Debtor between January 2022 and May 2023, NERA estimated the nominal value of the talc and asbestos-related litigation at $102 million, with a net present value of $14 million, assuming an annual discount of 12.5%.
  • Based on the broader historical filing data of all non-occupational mesothelioma claims filed against the Debtor since 2017, NERA calculated a more conservative estimate, with a nominal value of $59 million and a net present value of $9 million.
  • NERA estimated, as of June 2023, that the combined net present value of the Debtor's projected liabilities and defense costs ranged from approximately $16-33 million under the second scenario to approximately $25-54 million under the first scenario. Based on this forecast, Emprise HPC and the Debtor entered into the Keepwell Agreement, providing a total funding commitment of up to $25 million.

Unexpected Increase in Talc-Related Claims

• Notwithstanding these projections, there was a drastic and unforeseen increase in the number of claims filed against the Debtor in the years following the 2023 Liability Forecast and the consummation of the 2023 Restructuring Transaction. Claims filed against the Debtor increased by approximately 400% since 2023, driven largely by plaintiffs' counsel adding the Debtor to pre-existing cases in which it was not initially named, while average settlement costs increased substantially and dismissal rates decreased substantially.
• Realizing that its actual claims experience was far in excess of what was predicted, the Debtor requested that NERA prepare the 2026 Liability Forecast in connection with the filing of this Chapter 11 Case. That forecast revised the estimated nominal value of the litigation to $720 million, with a net present value of $159 million.
  • The increase was driven by three principal developments: a substantial increase in Talc-Related Claims asserted against the Debtor, lower dismissal rates, and an increase in average settlement amounts. Notably, since the 2023 Liability Forecast, 28 law firms have filed Talc-Related Claims against the Debtor for the first time.
  • Together, these developments caused the Debtor's projected Talc-Related Claims to unforeseeably increase substantially above the amounts forecasted in 2023 and used to size the Keepwell Agreement.

Heyer and Ludwig Verdicts

• On May 15, 2026, in Heyer v. I.H. Bennett Co., No. 62-CV-25-5182 (Minn. Dist. Ct. Ramsey Cnty. 2025), the jury returned a verdict in the amount of $10.2 million, of which the jury apportioned 20% to the Debtor, subject to certain setoffs.
• On July 7, 2026, in Ludwig v. Sumitomo Corp. of Americas, No. E187366/2025 (N.Y. Sup. Ct. 2025), a judgment was entered against Vi-Jon in the amount of $16,750,487.00.
• While the Debtor continues to maintain that its historical talc products were safe and uncontaminated, the verdicts further underscore the litigation risk and costs facing the Debtor and, together with the substantial increase in Talc-Related Claims since the 2023 Restructuring Transaction, demonstrated that the Debtor cannot sustain the litigation costs of continuous trials in the long term.

Insurance Coverage Disputes

• When a Talc-Related Claim is asserted, the Debtor timely tenders and notifies all insurers who issued Policies for policy years beginning with the date of first exposure alleged by the plaintiff, and thereafter provides regular updates on the status of the claims to those insurers.
• Despite the hundreds of millions of dollars in aggregate limits available under the Policies, the Debtor has been unable to manage its Talc-Related Claims solely through insurance coverage because certain insurers have asserted various alleged coverage defenses and other objections, including based on asbestos exclusions, pollution exclusions, and other defenses.
• The Debtor has not yet pursued coverage litigation against its insurers and has therefore only been able to receive partial payment of defense and indemnity costs, incurring significant costs from defense expenses, settlements and judgments, and increased defense costs associated with the growing case count and the defense of certain Customers pursuant to the Customer Indemnification Agreements. Accordingly, the Debtor's defense, settlement, and indemnity costs continue to grow, placing significant pressure on the Debtor's liquidity.
• The Debtor believes that the insurers' coverage defenses are not meritorious and that most or all of the Policies do provide defense and indemnity coverage, and intends to assign to the § 524(g) trust established pursuant to its chapter 11 plan all rights to recover against the Policies, reserving all rights with respect to challenging the validity of the insurers' coverage defenses.

Special Committee and Intercompany Investigation

• On April 1, 2026, the Debtor's Board of Managers adopted the Unanimous Written Consents of Vi-Jon, LLC, attaching the Charter of the Special Committee of the Board of Managers (the "Special Committee Charter") and designating independent directors Michael Buenzow and Lloyd Palans as members of the Special Committee.
  • Mr. Buenzow is a Managing Member of TURN 180 LLC with over 25 years of experience in operational turnarounds, interim leadership, business transformation, and financial restructuring, and has served as independent manager in other complex chapter 11 cases, including Norcold LLC. He is also a Senior Managing Director and Head of C-Suite and Board Advisory at ZCGC and previously served as Senior Managing Director and Vice Chairman of Restructuring at FTI Consulting Inc.
  • Mr. Palans is a Principal at Palans Consulting LLC, prior to which he was a partner at a global law firm and an adjunct professor at the Washington University in St. Louis School of Law, where he taught chapter 11 reorganizations.
• The Special Committee Charter delegated exclusive authority to review, evaluate, and propose strategic options with respect to potential transactions involving the Debtor, including any sale, financing, restructuring, or bankruptcy transactions, and to review, negotiate, evaluate, propose, approve, and enter into settlement terms related to any potential claims or causes of action asserted by or against the Debtor, including claims related to the 2023 Restructuring Transaction (the "Intercompany Claims").
• On April 16, 2026, the Special Committee directed Jon Muenz, a litigation partner at Sidley Austin LLP ("Sidley"), to conduct an independent review of prior, potential, and existing Intercompany Claims (the "Investigation"), including an extensive factual and legal analysis to determine whether the Debtor holds any potentially valuable and viable claims against any of its equity holders, affiliates, directors, managers, or officers, including claims for alter ego, piercing the corporate veil, successor liability, and actual or constructive fraudulent transfer.
  • At the Special Committee's direction, Mr. Muenz and his team sent diligence requests seeking books and records underlying the 2023 Restructuring Transaction and emails of key employees related to the transaction, and interviewed certain key employees, including members of the Debtor's, Emprise's, and Vivos' management.

Prepetition Negotiations and the Restructuring Support Agreement

• As a result of the increasing number of Talc-Related Claims, the Debtor retained Sidley and Houlihan Lokey Capital, Inc. in late February 2026, and Berkeley Research Group, LLC ("BRG") in mid-May 2026, to assist in evaluating strategic options designed to address the Debtor's liquidity constraints. Concurrently with the retention of BRG, Mackenzie Shea was retained as the Debtor's CRO.
• The Debtor and its advisors assessed the current Talc-Related Claims and analyzed the Debtor's continuing litigation in the tort system, while simultaneously exploring the viability of using bankruptcy to address the claims by channeling them to one or more trusts created under section 524(g) of the Bankruptcy Code.
• In April 2026, the Debtor began exploratory efforts regarding the implementation of a potential chapter 11 strategy and entered into nondisclosure agreements with 8 plaintiffs' counsel, who subsequently, along with an additional plaintiffs' counsel that did not enter into a nondisclosure agreement, formed the ad hoc group (the "Ad Hoc Plaintiffs' Group").
  • The Ad Hoc Plaintiffs' Group retained Caplin & Drysdale, Chartered as legal counsel and Province, LLC as financial advisor, and consists of plaintiffs holding more than 80% of all outstanding Talc-Related Claims against the Debtor as of the Petition Date.
  • In June 2026, the Debtor engaged The Honorable Shelley C. Chapman (Ret.) of Willkie Farr & Gallagher LLP as the prepetition future claimants' representative (the "Prepetition FCR") to represent the interests of individuals who may in the future assert Talc-Related Claims against the Debtor.
  • The Debtor provided the Ad Hoc Plaintiffs' Group, the Prepetition FCR, and their respective advisors with access to a fulsome data room and responses to information requests.
• On July 30, 2026, following months of intensive negotiations, the Debtor, Emprise, Emprise HPC, the Prepetition FCR, and the Ad Hoc Plaintiffs' Group entered into a restructuring support agreement (the "Restructuring Support Agreement"), which attaches a plan term sheet (the "Plan Term Sheet").

Plan Term Sheet and Talc Personal Injury Trust

• Under the Plan Term Sheet, the parties have agreed to support a chapter 11 plan incorporating a global resolution of the Talc-Related Claims against the Debtor, the Non-Debtor Affiliates, and each of their Related Parties through the issuance of a channeling injunction under section 524(g) of the Bankruptcy Code, as well as the resolution of any and all estate causes of action against the Non-Debtor Affiliates and their Related Parties.
• Emprise has agreed to fund a $25 million guaranteed contribution on the effective date of a confirmed chapter 11 plan (the "Emprise Effective Date Cash Trust Contribution") to fund a post-confirmation trust established under section 524(g) (the "Talc Personal Injury Trust"). The trust will also be funded with:
  • A $1 million promissory note issued by the Reorganized Debtor (the "Debtor Promissory Note"), maturing six months after the effective date, non-interest bearing and prepayable at any time without premium or penalty, and secured by a non-recourse first-priority lien on 50.1% of the equity interests in the Reorganized Debtor, upon which the trust may foreclose following a default;
  • All Assigned Causes of Action, comprising the Debtor's unresolved causes of action that relate to or arise out of the Policies, any Talc-Related Claim, chapter 5 preference claims, and claims relating to or arising out of the 2020 ESOP Transactions, but solely against certain "Excluded Parties" (Berkshire Partners LLC, Berkshire Fund VI Limited Partnership, Berkshire Investors LLC, Berkshire Investors III LLC, and Brunner-family related entities and individuals), which claims the Plan will not release;
  • Any of the Debtor's and Non-Debtor Affiliates' respective rights under and related to the Policies;
  • The net proceeds of the sale of the Debtor's real estate, or the real estate itself if a sale is not consummated during the Chapter 11 Case, with the Non-Debtor Affiliates waiving any liens on the real estate and sale proceeds; and
  • An obligation to pay a $20 million settlement fee, payable by Emprise only upon a sale or merger of Emprise at an enterprise value at or above $1 billion, equal to 50% of the first $40 million of gross consideration above $1 billion of such transaction. The Talc Personal Injury Trust holds consultation rights regarding computation of the settlement fee, including the right to receive sufficient information to assess the enterprise value calculation.
• The Non-Debtor Affiliates have also agreed to fund $7 million to the Debtor, to be used as exit financing in accordance with the Budget; in exchange, the Non-Debtor Affiliates will acquire a material set of the Debtor's assets pursuant to the terms of the Plan.
• The Plan will provide for the issuance of a channeling injunction prohibiting holders of Talc-Related Claims from asserting claims against the reorganized Debtor, the Non-Debtor Affiliates, or any of their related parties arising from the Debtor's sale of talc and talc products prior to its emergence from this Chapter 11 Case.
• As part of the Restructuring Support Agreement, and in exchange for the contributions made by the Non-Debtor Affiliates to the Talc Personal Injury Trust and to the Debtor through exit financing and the amendment of the Keepwell Agreement, the Debtor has agreed to release, pursuant to a confirmed Plan, any and all claims and causes of action arising out of the 2023 Restructuring Transaction, as well as any and all other estate claims and causes of action against the Non-Debtor Affiliates.
• On or after the Petition Date, the Debtor may file an adversary proceeding seeking a preliminary injunction, and a corresponding temporary restraining order, extending the automatic stay to the Non-Debtor Affiliates and each of their Related Parties and enjoining the assertion, commencement, continuation, or prosecution of any Talc-Related Claim against them in any jurisdiction pending the effective date; the Ad Hoc Plaintiffs' Group and the Prepetition FCR have agreed not to oppose such relief.

The Amended Keepwell Agreement and Case Funding

• On July 30, 2026, in connection with negotiations regarding the Plan, the Debtor and Emprise HPC executed an amendment to the Keepwell Agreement (the "Amended Keepwell Agreement"), which facilitates the Debtor's ability to draw on the available Keepwell Obligations by removing certain conditions previously required to make a qualifying capital call.
  • The removed conditions included the requirement that the Debtor's forecast for the four calendar quarters following the capital call indicate that, absent a capital infusion, the Debtor's available financial resources would not exceed its anticipated liabilities by more than $2 million, and that, if the capital call exceeded $2 million, Emprise HPC would have up to 45 business days to provide the requested amount.
  • The Debtor intends to use the outstanding Keepwell Obligations to fund the administration of this Chapter 11 Case, and during the initial weeks of the case Emprise HPC will fund the aggregate amount of the full undrawn capital commitment in accordance with the Budget. Monies available under the Amended Keepwell Agreement are not subject to repayment. The Debtor's rights under the Amended Keepwell Agreement are a substantial asset of the Debtor, as the agreement provides equity funding to satisfy incurred and anticipated expenses.
• Emprise HPC has further committed to provide funding as follows, in each case in accordance with the Budget: the remaining undrawn capital commitments under the Amended Keepwell Agreement in an aggregate amount of approximately $8.1 million, to be funded following entry of the Interim Cash Management Order; and an aggregate amount of approximately $32 million to be funded on the effective date of the Acceptable Plan and the satisfaction or waiver of all applicable conditions precedent.

Milestones

• The Plan Term Sheet sets milestones the Debtor must achieve, each extendable only with Emprise's prior written approval: filing the Cash Management Motion (including a request to approve the Amended Keepwell Agreement on a final basis) no later than one day after the Petition Date; entry of the Interim Cash Management Order within three business days and the final Cash Management Order within thirty-five days; filing an Acceptable Plan and disclosure statement within thirty days; entry of an order approving the disclosure statement within seventy days; commencement of solicitation within seventy-five days; entry of an order confirming the Acceptable Plan, including approval of the Sale Transaction, within one hundred ten days; and consummation of the Plan within one hundred twenty days of the Petition Date.
• The Plan Term Sheet terminates upon the Debtor's failure to file a chapter 11 petition by August 9, 2026, the filing of a voluntary chapter 7 petition, or the dismissal or conversion of the Chapter 11 Case. The Restructuring Support Agreement terminates automatically upon the earlier of the Plan's effective date and the date nine months after July 30, 2026, absent written agreement of the parties to extend.
• The Plan Term Sheet requires that the Plan receive acceptance by at least 75% in number of holders of Talc-Related Claims, and the Restructuring Support Agreement obligates the plaintiffs' firms party thereto to collectively represent at least 75% of such holders by number.

Chapter 11 Filing and Next Steps

After entering into the Restructuring Support Agreement, the Debtor determined that it was in the best interest of its estate and all stakeholders to file this Chapter 11 Case to implement the settlement and chapter 11 plan contemplated thereby. On August 2, 2026, the Debtor filed a voluntary petition for relief under chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

• The Chapter 11 Case is supported by counsel representing over 80% of holders of Talc-Related Claims—whose vote is necessary to confirm the § 524(g) plan—and the Non-Debtor Affiliates whose contributions will fund the § 524(g) trust.
• According to the Debtor, the creation of a § 524(g) trust for the benefit of holders of Talc-Related Claims represents the most efficient and expeditious means for the Debtor to manage its liabilities in a centralized process that assures equitable treatment to all current and future claimants.
• The Debtor's immediate post-petition objective is to maintain a business-as-usual atmosphere during the early stage of the Chapter 11 Case, with as little disruption to operations as possible. Contemporaneously with the filing, the Debtor filed a number of First Day Pleadings seeking relief intended to stabilize its business operations, facilitate the efficient administration of the case, and execute a swift and smooth restructuring, comprising the Claims Agent Retention Application (seeking appointment of Omni Agent Solutions, Inc. as claims and noticing agent), the Creditor Matrix Motion (seeking authority to redact personally identifiable information, to serve represented litigation claimants through their counsel, and to file a list of the twenty law firms representing the largest number of represented litigation claimants in lieu of a list of the twenty largest unsecured creditors), the Cash Management Motion, the Employee Wage Motion, and the Shared Services Agreement Motion.