10.

Commitments and Contingencies

Commitments and contingencies are described below and summarized by the following as of

December 31, 2020

	Total		2021		2022		2023		2024		2025		Thereafter
Prescription database	$	1,278,000	$	545,000	$	733,000		-		-		-		-
Pediatric portfolio fixed payments and product minimums		15,825,000		1,650,000		3,300,000		3,300,000		3,300,000		3,300,000		975,000
Inventory purchase commitment		1,717,000		981,000		736,000		-		-		-		-
CVR liability		14,000,000		2,000,000		2,000,000		5,000,000		5,000,000		-		-
Product contingent liability		2,500,000		-		-		-		-		-		2,500,000
Product milestone payments		3,000,000		-		3,000,000		-		-		-		-

	$	38,320,000	$	5,176,000	$	9,769,000	$	8,300,000	$	8,300,000	$	3,300,000	$	3,475,000

Prescription Database

May 2016,

the Company entered into an agreement with a vendor that will provide it with prescription database information. The Company agreed to pay approximately

$1.6

million over

three

years for access to the database of prescriptions written for Natesto. In

January 2020,

the Company amended the agreement and agreed to pay additional

$0.6

million to add access to the database of prescriptions written for the Pediatric Portfolio. The payments have been broken down into quarterly payments.

Pediatric Portfolio Fixed Payments and Product Milestone

The Company assumed

two

fixed, periodic payment obligations to an investor (the “Fixed Obligation”). Beginning

November 1, 2019

through

January 2021,

the Company will pay monthly payments of

$86,840,

with a balloon payment of

$15,000,000

due in

January 2021.

second

fixed obligation requires the Company pay a minimum of

$100,000

monthly through

February 2026,

except for

$210,767

paid in

January 2020.

May 29, 2020,

the Company entered into an Early Payment Agreement and Escrow Instruction (the “Early Payment Agreement”) pursuant to which the Company agreed to pay

$15.0

million to the investor in early satisfaction of the Balloon Payment Obligation. The parties to the Early Payment Agreement acknowledged and agreed that the remaining fixed payments other than the Balloon Payment Obligation remain due and payable pursuant to the terms of the Agreement, and that nothing in the Early Payment Agreement alters, amends, or waives any provisions or obligations in the Waiver or the Investor agreement other than as expressly set forth therein.

In addition, the Company acquired a Supply and Distribution Agreement with Tris Pharma, Inc. ("TRIS"), (the “Karbinal Agreement”), under which the Company is granted the exclusive right to distribute and sell the product in the United States. The initial term of the Karbinal Agreement was

years. The Company will pay TRIS a royalty equal to

23.5%

of net sales. A

third

party agreed to offset the

23.5%

royalty payable by

8.5%,

for a net royalty equal to

15%

in fiscal year

2018

and

2019

for net sales of Karbinal.

The Karbinal Agreement

make-whole

payment is capped at

$2,100,000

each year. The Karbinal Agreement also contains minimum unit sales commitments, which is based on a commercial year that spans from

August 1

through

July 31,

70,000

units through

2025.

The Company is required to pay TRIS a royalty make whole payment of

$30

for each unit under the

70,000

-unit annual minimum sales commitment through

2025.

The annual payment is due in

August

of each year. The Karbinal Agreement also has multiple commercial milestone obligations that aggregate up to

$3.0

million based on cumulative net sales, the

first

of which is triggered at

$40.0

million of net revenues.

Inventory Purchase Commitment

May 1, 2020,

the Company's Innovus subsidiary entered into a Settlement Agreement and Release (the “Settlement Agreement”) with Hikma Pharmaceuticals USA, Inc. (“Hikma”). Pursuant to the settlement agreement, Innovus has agreed to purchase and Hikma has agreed to manufacture a minimum amount of our branded fluticasone propionate nasal spray USP,

mcg per spray (FlutiCare®), under Hikma's FDA approved ANDA

No.

207957

in the U.S. The commitment requires Innovus to purchase

three

batches of product through fiscal year

2022

each of which amount to

$1.0

million.

CVR Liability

February 14, 2020,

the Company closed on the Merger with Innovus Pharmaceuticals after approval by the stockholders of both companies on

February 13, 2020.

Upon closing the Merger, a subsidiary of the Company merged with and into Innovus and entered into a Contingent Value Rights Agreement (the “CVR Agreement”). Each CVR entitles its holder to receive its pro rata share, payable in cash or stock, at the option of Aytu, of certain payment amounts if the targets are met. If any of the payment amounts is earned, they are to be paid by the end of the

first

quarter of the calendar year following the year in which they are earned. Multiple revenue milestones can be earned in

one

year.

March 31, 2020,

the Company paid out the

first

CVR Milestone in the form of approximately

120

thousand shares of the Company's common stock to satisfy the

$2.0

million obligation as a result of Innovus achieving the

$24.0

million revenue milestone for calendar year ended

December 31, 2019.

As a result of this, the Company recognized a gain of approximately

$0.3

million during the fiscal year ended

June 30, 2020

additional milestone payments have been paid as of

December 31, 2020

Product Contingent Liability

February 2015,

Innovus acquired Novalere, which included the rights associated with distributing FlutiCare. As part of the Merger, Innovus is obligated to make

additional payments of

$0.5

million each when certain levels of FlutiCare sales are achieved. The discounted value as of

December 31, 2020,

is approximately

$0.2

million.

Product Milestone Payments

In connection with the Company's intangible assets, Aytu has certain milestone payments, totaling

$3.0

million, payable at a future date, are

not

directly tied to future sales, but upon other events certain to happen. These obligations are included in the valuation of the Company's contingent consideration (see Note