Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies

Commitments and Contingencies

Note 7.    Commitments and Contingencies

Operating Leases

In December 2021, the Predecessor entered into a three-year non-cancellable lease for office space. The lease does not include variable or contingent lease payments. On March 29, 2024, the Company entered into an amendment to extend the lease for an additional five years. An operating lease asset and liability are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term. 

The following table summarizes supplemental balance sheet information related to the operating lease as of June 30, 2024 (in thousands, unaudited):

Minimum lease payments by fiscal year
2024	$	159
2025		175
2026		297
2027		307
2028		318
Thereafter		328
Total future minimum lease payments		1,584
Less: Imputed interest		(188)
Present value of lease payments		1,396
Less: Current portion (included in other accrued expenses)		(134)
Noncurrent operating lease liability	$	1,262
Operating lease right-of-use asset	$	1,404
Remaining lease term in years		5.5
Discount rate		4.3	%

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases for the three and six months ended June 30, 2024 (Successor) and June 30, 2023 (Predecessor) (in thousands) (unaudited).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	Successor		Predecessor		Successor		Predecessor
Cost of operating leases	$	72	$	68	$	116	$	138
Cash paid for operating leases		80		77		159		154

Legal Proceedings

The Company, from time to time, is involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation. Other than as described below, the Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its accompanying financial position, results of operations or cash flows.

On September 18, 2023, Odeon Capital Group LLC (“Odeon”) filed a lawsuit against the Company in the Supreme Court of the State of New York, alleging that the Company failed to pay Odeon’s deferred underwriting fee of $1.25 million. Odeon claims that it served as the underwriter for Priveterra Acquisition Corp., the special purpose acquisition company with which Old AEON merged with and into in July 2023. Odeon seeks monetary damages for the full amount of its claimed underwriting fee, punitive damages, attorneys’ fees and other amounts. On November 16, 2023, the Company filed a motion to dismiss certain claims included in Odeon’s complaint.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. See Note 2 Summary of Significant Accounting Policies for additional information.