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Note 9 - Other Liabilities

6 Months Ended

Dec. 31, 2023

Other Liabilities Disclosure [Text Block]

Note 9 - Other Liabilities

	*December 31,*			*June 30,*
	*2023*			*2023*
	(in thousands)
Fixed payment arrangements	$	9,043		$	10,420
Operating lease liabilities		2,214			2,090
Employee retention credit		3,759			—
Other		564			1,555
Total other liabilities		15,580			14,065
Less: current portion		(9,236	)		(7,090	)
Total other liabilities, non-current	$	6,344		$	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.

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 December 31, 2023, the fixed payment arrangement balance was $1.8 million in other current liabilities, and $1.2 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 December 31, 2023, the balance was $6.0 million in other current liabilities on the consolidated balance sheet.

Operating Lease Liabilities

The Company has entered into various operating lease agreements for certain of its offices, manufacturing facilities and equipment. Please refer to Note 6 - Leases for further detail.

Employee Retention Credit

The $3.8 million ERC accrual in other non-current liabilities as of December 31, 2023, represents the proceeds the Company received from the ERC program during the first quarter of fiscal 2024. The ERC is a refundable payroll tax credit from the CARES 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 first quarter of fiscal 2024.

Other

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