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Other Liabilities

3 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

9. Other Liabilities


	September 30,		June 30,
	2023		2023

	(In thousands)
Fixed payment arrangements	$	9,380	$	10,420
Operating lease liabilities		2,473		2,090
Employee retention credit		3,759		—
Other		1,484		1,555
Total other liabilities		17,096		14,065
Less: current portion		(8,990)		(7,090)
Total other liabilities, non-current	$	8,106	$	6,975

Fixed Payment Arrangements.

Fixed payment arrangements represent obligations to an investor assumed as part of the acquisition of products from Cerecor, Inc. in 2019, including fixed and variable payments. These obligations included fixed monthly payments equal to $0.1 million from November 2019 through January 2021, plus $15.0 million due in January 2021, of which $15.0 million was paid down early in May 2020. Monthly variable payments due to the same investor are equal to 15.0% of net revenue generated from a subset of the Pediatric Portfolio, subject to an aggregate monthly minimum of $0.1 million, except for January 2021, when a one-time payment of $0.2 million was due and paid. The variable payment obligation was to continue until the earlier of (i) aggregate variable payments of approximately $9.3 million have been made or (ii) February 12, 2026.

On June 21, 2021, the Company entered into a Waiver, Release and Consent pursuant to which the Company paid $2.8 million to the investor in partial satisfaction of the fixed obligation. The Company agreed to pay the remaining fixed obligation of $3.0 million in six equal quarterly payments of $0.5 million each over six quarters beginning September 30, 2021. The Company accounted for the Waiver, Release and Consent as a debt, and remeasured the related liabilities using a discounted cash flow model. This fixed payment arrangement was paid in full by January 2023.

The Tris Karbinal Agreement grants the Company exclusive right to distribute and sell the product in the United States. The initial term of the agreement was 20 years. The Company will pay Tris a royalty equal to 23.5% of net sales. The Tris Karbinal Agreement also contains minimum unit sales commitments, which is based on a commercial year that spans from August 1 through July 31, of 70,000 units annually 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 Tris Karbinal Agreement make-whole payment is capped at $2.1 million each year. The annual payment is due in August of each year. The Tris 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. As of September 30, 2023, the fixed payment arrangement balance was $1.8 million in other current liabilities, and $1.7 million in other non-current liabilities on the consolidated balance sheet.

On May 12, 2022, the Company entered into an agreement with Tris to terminate the Tuzistra XR License, Development, Manufacturing and Supply Agreement dated November 2, 2018 (the “License Agreement”). Pursuant to such termination, the Company agreed to pay Tris a total of approximately $9.0 million, which reduced its total liability for minimum payments by approximately $8.0 million from the original License Agreement. As of September 30, 2023, the balance was $6.0 million in other current liabilities on the consolidated balance sheet.

Employee Retention Credit.

The Employee Retention Credit (“ERC”) in other non-current liabilities was a result of $3.8 million in proceeds the Company received from the ERC program during the quarter ended September 30, 2023. The ERC is a refundable payroll tax credit from the Coronavirus Aid, Relief, and Economic Security Act enacted by the U.S. government to provide certain relief from the COVID-19 pandemic. The refundable payroll tax credit shall be recognized in the consolidated statement of operations following any adjustments from its regulatory audit or upon further clarifications from the Internal Revenue Service (see Note 2 – Significant Accounting Policies). The associated vendor fee of $0.4 million was expensed as incurred in the quarter ended September 30, 2023.

Other.

Other consists of taxes payable and deferred cost related to the Company’s technology transfer.