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Commitments and Contingencies
3 Months Ended
Mar. 31, 2022
Commitments and Contingencies  
Commitments and Contingencies

10. Commitments and Contingencies

The Company has several firm purchase commitments, primarily related to the manufacture and supply of Twirla and the supply of a field force of sales representatives to provide certain detailing services, sales operation services, compliance services, and training services. Future firm purchase commitments under these agreements, the last of which ends in 2030, total $3.4 million. This amount does not represent all of the Company’s anticipated purchases in the future, but instead represents only purchases that are the subject of contractually obligated minimum purchases. The minimum commitments disclosed are determined based on non-cancelable minimum spend in 2021 or termination amounts. Additionally, the Company purchases products and services as needed with no firm commitment.

In April 2020, we entered into a manufacturing and commercialization agreement with Corium, Inc., which we refer to as the Corium Agreement. Under the Corium Agreement, the Company has a requirement to order quarterly minimum volumes of approximately $5.6 million of product. In the event that the Company does not order the minimum volume, the Company is required to pay an additional fee equal to twenty-five percent (25%) per unit of the transfer price for all units ordered in that quarter. The Company did not meet the minimum volume order in the first quarter of 2022, and has, therefore, paid the additional 25% per unit fee as a penalty for all units ordered during the period. Based on current demand expectations for Twirla, the Company does not expect to meet the minimum volume order for the balance of 2022 and would be subject to the additional fee on future purchases. The Company and Corium are actively negotiating the structure and application of the contract minimums for the years 2022 and beyond. Given the uncertainty of the outcome of the negotiations, the Company is not reasonably able to estimate the amount, if any, of additional fees to be paid to Corium.

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position. As of March 31, 2022, the Company has not recorded a provision for any contingent losses.