Related Party Transactions

9 Months Ended

Mar. 31, 2018

Related Party Transactions

Related Party Transactions

Note 20.  Related Party Transactions

The Company had sales of $962 thousand and $823 thousand during the three months ended March 31, 2018 and 2017, respectively, to a generic distributor, Auburn Pharmaceutical Company (“Auburn”).  Sales to Auburn for the nine months ended March 31, 2018 and 2017 were $3.0 million and $2.8 million, respectively.  Jeffrey Farber, Chairman of the Board, is the owner of Auburn.  Accounts receivable includes amounts due from Auburn of $583 thousand and $751 thousand at March 31, 2018 and June 30, 2017, respectively.

The Company also had sales of $406 thousand and $617 thousand during the three months ended March 31, 2018 and 2017, respectively, to a generic distributor, KeySource.  Sales to KeySource for the nine months ended March 31, 2018 and 2017 were $1.4 million and $946 thousand, respectively. Albert Paonessa, a current board member, was appointed the CEO of KeySource in May 2017.  Accounts receivable includes amounts due from KeySource of $340 thousand and $606 thousand as of March 31, 2018 and June 30, 2017, respectively.

In connection with the termination of the employment of Arthur P. Bedrosian, the Company’s former Chief Executive Officer, effective as of December 31, 2017, the Company entered into a separation agreement pursuant to which he will receive certain benefits including, among others, 36 months base salary, a pro-rated Fiscal 2018 cash bonus as well as accelerated vesting of his outstanding equity awards.  The total benefits resulted in an approximately $3.4 million charge to the Company’s consolidated statements of operations in the second quarter of Fiscal 2018.  On January 20, 2018, the Company also entered into a consulting agreement with Mr. Bedrosian to work on several important projects, primarily involving existing and new partnering efforts to expand and diversify opportunities, including but not limited to spearheading the effort to transition and strengthen the Company’s existing contractual relationships with its key partners.