Subsequent Events

6 Months Ended

Mar. 31, 2020

Subsequent Events

Subsequent Events

13. Subsequent Events

Corporate office lease termination

On May 6, 2020, the Company entered into a lease termination agreement with the landlord, Cedar Brook Corporate Center, LP, a New Jersey limited partnership, to terminate that certain lease dated June 12, 2011 for approximately 66,000 square feet of office, manufacturing and laboratory space located in Cranbury, New Jersey that served as the Company’s headquarters. The termination of the lease is expected to reduce cash needs by approximately $14.0 million over the remaining life of the original lease through February 2028. In consideration for the termination of the lease, the Company agreed to make payments to landlord totaling approximately $1.0 million (payable in eight monthly installments commencing May 1, 2020), with late payments subject to an additional 7% per annum until paid in full.

In the third quarter of fiscal year 2020, the Company will write off the finance lease right-of-use asset and finance lease liability associated with the corporate office lease. The estimated loss on lease termination is $0.6 million.

Paycheck Protection Program term loan

On May 4, 2020, the Company received $0.9 million in proceeds from a loan granted pursuant to the PPP of the CARES Act. The PPP loan is evidenced by a promissory note containing the terms and conditions for repayment of the PPP loan.The PPP loan provides for an initial six-month deferral of payments and any amount owed on the loan has a two-year maturity (May 2022), with an interest rate of 1% per annum. The Company has the right to prepay any amounts outstanding under this loan at any time and from time to time, in whole or in part, without penalty.