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Commitments and Contingencies | 3 Months Ended | 12 Months Ended
--- | --- | ---
Sep. 30, 2016 | Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract] |  |
Commitments and Contingencies Disclosure [Text Block] | Note 6 — Commitments and Contingencies Commitments and contingencies are described below and summarized by the following table for the designated fiscal years ending June 30, as of September 30, 2016:
|  |  |  | Remaining |  |  |  |  |  |  |  |  |  |  |
|  | Total |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | Thereafter |
Prescription Database |  | $ | 1,902,000 |  | $ | 731,000 |  | $ | 598,000 |  | $ | 573,000 |  | $ | — |  | $ | — |  | $ | — |
Natesto |  |  | 8,500,000 |  |  | 6,000,000 |  |  | — |  |  | — |  |  | 2,500,000 |  |  | — |  |  | — |
Manufacturing agreement |  |  | 2,500,000 |  |  | 1,500,000 |  |  | 500,000 |  |  | 500,000 |  |  | — |  |  | — |  |  | — |
ProstaScint commercial supply agreement |  |  | 1,673,000 |  |  | 1,569,000 |  |  | 102,000 |  |  | 2,000 |  |  |  |  |  |  |  |  |  |
Service agreement |  |  | 153,000 |  |  | 153,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Primsol |  |  | 250,000 |  |  | 250,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Office Lease |  |  | 283,000 |  |  | 108,000 |  |  | 145,000 |  |  | 30,000 |  |  | — |  |  | — |  |  | — |
Sponsored research agreement with related party |  |  | 60,000 |  |  | 60,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | 15,321,000 |  | $ | 10,371,000 |  | $ | 1,345,000 |  | $ | 1,105,000 |  | $ | 2,500,000 |  | $ | — |  | $ | — |
Prescription Database In May 2016, Aytu entered into an agreement with a company that will provide Aytu with prescription database information, whereby Aytu agreed to pay approximately $1.9 million over three years for access to the database of prescriptions written for Natesto. Natesto In April 2016, the Company entered into an agreement with Acerus whereby Aytu agreed to pay $8.0 million for the exclusive U.S. rights to Natesto of which $6.0 million is payable in fiscal year 2017, $2.0 million was paid in October 2016. Additionally, Aytu is required to make the first milestone payment of $2.5 million even if the milestone is not reached. Manufacturing Agreement In October 2015, Aytu entered into a Master Services Agreement with Biovest International, Inc. (“Biovest”). The agreement provides that Aytu may engage Biovest from time to time to provide services in accordance with mutually agreed upon project addendums and purchase orders. Aytu expects to use the agreement from time to time for manufacturing services, including without limitation, the manufacturing, processing, quality control testing, release or storage of its products for the ProstaScint product. Aytu is obligated to pay Biovest $2.5 million for time and materials as they develop a plan to reproduce the manufacturing process. Of this commitment, $2.0 million was paid in fiscal 2016 and $500,000 was paid in July 2016. ProstaScint Commercial Supply Agreement In September 2016, Aytu entered into a Commercial Supply Agreement with Grand River Aseptic Manufacturing, Inc. (“GRAM”). The agreement provides that Aytu may engage GRAM from time to time to provide services in accordance with mutually agreed upon work orders. Aytu expects to use the agreement from time to time for the filling, labeling, and packaging of its ProstaScint product. Aytu is obligated to pay GRAM approximately $1.7 million for process development and production services used to fill, package, inspect, label, and test ProstaScint for distribution. As of September 30, 2016, Aytu has not made any payments to GRAM. Service Agreement In July 2015, Aytu entered into an agreement with Ampio whereby Aytu agreed to pay Ampio a set amount per month for shared overhead which includes costs related to the shared facility, corporate staff, and other miscellaneous overhead expenses. This agreement was amended on November of 2015, April of 2016 and again in July 2016 resulting in an amount of $17,000 per month. This agreement will be in effect until it is terminated in writing by both parties. Primsol In October 2015, Aytu entered into an asset purchase agreement with FSC Laboratories, Inc., or FSC. Pursuant to the agreement, we purchased assets related to FSC’s product known as Primsol (trimethoprim solution), including certain intellectual property and contracts, inventory, work in progress and all marketing and sales assets and materials related solely to Primsol (together, the “Primsol Business”), and assumed certain of FSC’s liabilities, including those related to the sale and marketing of Primsol arising after the closing. We paid $500,000 at closing for the Primsol Business and we paid an additional $142,000, of which $102,000 went to inventory and $40,000 towards the Primsol Business, for the transfer of the Primsol-related product inventory. We also paid $500,000 in April of 2016 and $500,000 in July of 2016 and paid the remaining $250,000 in November 2016 (together, the “Installment Payments”), for a total purchase price of $1.9 million. The amount is included in accounts payable and accrued liabilities on the balance sheet. Office Lease In June 2015, Aytu entered into a 37 month operating lease for a space in Raleigh, North Carolina. This lease has initial base rent of $3,000 a month, with total base rent over the term of the lease of approximately $112,000. In September 2015, the Company entered into a 37 month operating lease in Englewood, Colorado. This lease has an initial base rent of $9,000 a month with a total base rent over the term of the lease of approximately $318,000. The Company recognizes rental expense of the facilities on a straight-line basis over the term of the lease. Differences between the straight-line net expenses on rent payments are classified as liabilities between current deferred rent and long-term deferred rent. Rent expense for the respective periods is as follows:
|  | Three Months Ended September 30, |
|  | 2016 |  | 2015 |
Rent expense |  | $ | 35,000 |  | $ | 18,000 |
Sponsored Research Agreement with Related Party In June 2013, Luoxis entered into a sponsored research agreement with TRLLC, an entity controlled by Ampio’s director and Chief Scientific Officer, Dr. Bar-Or. The agreement, which was amended in January 2015, provides for Luoxis (now Aytu) to pay $6,000 per month to TRLLC in consideration for services related to research and development of the Oxidation Reduction Potential platform. In March 2014, Luoxis also agreed to pay a sum of $615,000 which is being amortized over the contractual term of 60.5 months and is divided between current and long-term on the balance sheet; as of September 2014, this amount had been paid in full. This agreement is set to expire in March 2019 but can be terminated earlier but not until after March 2017.
| ## Note 7 — Commitments and Contingencies Commitments and contingencies are described below and summarized by the following table as of June 30, 2016:
|  | Total |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | Thereafter
Prescription Database |  | $ | 1,902,000 |  |  | $ | 731,000 |  |  | $ | 598,000 |  |  | $ | 573,000 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Natesto |  |  | 8,500,000 |  |  |  | 6,000,000 |  |  |  | — |  |  |  | — |  |  |  | 2,500,000 |  |  |  | — |  |  |  | — |
Manufacturing agreement |  |  | 3,000,000 |  |  |  | 2,000,000 |  |  |  | 500,000 |  |  |  | 500,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Service agreement |  |  | 204,000 |  |  |  | 204,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Primsol |  |  | 750,000 |  |  |  | 750,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Office Lease |  |  | 317,000 |  |  |  | 142,000 |  |  |  | 145,000 |  |  |  | 30,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Sponsored research agreement with related party |  |  | 70,000 |  |  |  | 70,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 14,743,000 |  |  | $ | 9,897,000 |  |  | $ | 1,243,000 |  |  | $ | 1,103,000 |  |  | $ | 2,500,000 |  |  | $ | — |  |  | $ | — |
### Prescription Database In May 2016, Aytu entered into an agreement with a company that will provide Aytu with prescription database information, whereby Aytu agreed to pay approximately $1,902,000 over three years for access to the database of prescriptions written for Natesto. ### Natesto In April 2016, the Company entered into an agreement with Acerus whereby Aytu agreed to pay $8,000,000 for the exclusive U.S. rights to Natesto of which $6,000,000 is payable in fiscal year 2017. Additionally, Aytu is required to make the first milestone payment even if the milestone is not reached. ### Manufacturing Agreement On October 8, 2015, Aytu and Biovest International, Inc., or Biovest, entered into a Master Services Agreement, pursuant to which Biovest is to provide manufacturing services to us for ProstaScint. In conjunction with entering into the agreement, we submitted a work order to Biovest to provide us with active pharmaceutical ingredient for ProstaScint over a four-year period at a total cost of $5.0 million, of which we paid $1.0 million upon submission of the work order and $500,000 in each of January and April 2016. We will pay an additional $2,000,000 in fiscal 2017, and $500,000 in both fiscal 2018 and 2019. ### Service Agreement In July 2015, Aytu entered into agreements with Ampio whereby Aytu agreed to pay Ampio $30,000 per month for shared overhead which includes costs related to the shared facility, corporate staff, and other miscellaneous overhead expenses. These agreements will be in effect until they are terminated in writing by both parties. This agreement was amended in April 2016, which reduced the monthly amount to $18,000. This agreement was amended again in July 2016, which reduced the monthly amount to approximately $17,000 per month. For the years ended June 30, 2016 and 2015, the Company paid approximately $310,000 for this service agreement. ### Primsol In October 2015, Aytu entered into an asset purchase agreement with FSC Laboratories, Inc., or FSC. Pursuant to the agreement, we purchased assets related to FSC’s product known as Primsol (trimethoprim solution), including certain intellectual property and contracts, inventory, work in progress and all marketing and sales assets and materials related solely to Primsol (together, the “Primsol Business”), and assumed certain of FSC’s liabilities, including those related to the sale and marketing of Primsol arising after the closing. We paid $500,000 at closing for the Primsol Business and we paid an additional $142,000, of which $102,000 went to inventory and $40,000 towards the Primsol Business, for the transfer of the Primsol-related product inventory. We also paid $500,000 on April 1, 2016 and $500,000 on July 1, 2016 and must pay $250,000 no later than September 30, 2016 (together, the “Installment Payments”), for a total purchase price of $1,892,000. This amount is included in accounts payable and accrued liabilities on the balance sheet. ### Office Lease In June 2015, Aytu entered into a 37 month operating lease for a space in Raleigh, North Carolina. This lease has initial base rent of $3,000 a month, with total base rent over the term of the lease of approximately $112,000. In August 2015, the Company entered into a 37 month operating lease in Englewood, Colorado effective September 1, 2015. This lease has an initial base rent of $9,000 a month with a total base rent over the term of the lease of approximately $318,000 which includes rent abatements. The Company recognizes rental expense of the facilities on a straight-line basis over the term of the lease. Differences between the straight-line net expenses on rent payments are classified as liabilities between current deferred rent and long-term deferred rent. Rent expense for the respective periods is as follows:
|  | Year Ended June 30,
|  | 2016 |  | 2015
Rent expense |  | $ | 120,000 |  |  | $ | 51,000 |
### Sponsored Research Agreement with Related Party Aytu entered into a Sponsored Research Agreement with Trauma Research LLC (“TRLLC”), a related party, in June 2013. Under the terms of the Sponsored Research Agreement, TRLLC agreed to work collaboratively in advancing the RedoxSYS System diagnostic platform through research and development efforts. The Sponsored Research Agreement may be terminated without cause by either party on 30 days’ notice.

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