Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

16.	COMMITMENTS AND CONTINGENCIES

Vendor Agreements

The Company, through its subsidiaries Comfort Pharmacy, LLC, Comfort Pharmacy 2, LLC, and Belen Pharmacy Group, LLC, entered into a multi-year Prime Vendor Agreement (“PVA”) with a pharmaceutical wholesaler, effective November 1, 2020, that continues through October 31, 2023. This agreement extends on a

month-to-month

basis thereafter until either party gives 90 days’ written notice to terminate. The pharmaceutical wholesaler serves as the Company’s primary wholesale supplier for branded and generic pharmaceuticals. The agreement contains a provision that requires average monthly net purchases of $0.8 million, and if the minimum is not met, the vendor may adjust the pricing of goods. A Joinder Agreement was entered into on December 1, 2020, which amended the PVA to include IFB Pharmacy, LLC under the agreement as of this date.

As a result of the University acquisition, the Company assumed the vendor agreement in 2021 that University, through its subsidiary University Health Care Pharmacy, Inc., had with a second pharmaceutical vendor. The agreement, effective through April 7, 2022, contains a provision that requires average monthly net purchases of $0.6 million, and if the minimum is not met, the vendor may adjust the pricing of goods.

Management believes for the six months ended June 30, 2021 and 2020, the minimum requirements of the agreements in place were met.

Operating Leases

The Company leases office facilities and office equipment under

non-cancellable

operating leases expiring through the year 2028

. Refer to Note 14,

“Related Party Transactions”,

for operating leases that were entered into with related parties. Minimum future payments as of June 30, 2021 were approximately as follows:


Year ending December 31 ,	Amount (in thousands)
Remainder of 2021	$	6,120
2022		12,577
2023		11,210
2024		9,589
2025		8,005
Thereafter		22,436

Total	$	69,937

Rent expense for the three months ended June 30, 2021 and 2020 amounted to approximately $4.9 million and $2.7 million, respectively. Rent expense for the six months ended June 30, 2021 and 2020 amounted to approximately $9.0 million and $5.1 million, respectively.

Litigation

The Company is exposed to various asserted and unasserted potential claims encountered in the normal course of business. Management believes that the resolution of these matters will not have a material effect on the Company’s condensed consolidated financial position, results of their operations or cash flows.