Commitments and Contingent Obligations

12 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

(11)	Commitments and Contingent Obligations

(a)

Royalty Commitments -

We have entered into various license agreements that require payment of royalties based on a specified percentage of the sales of licensed products. Approximately 81% of our royalty expenses relate to our Diagnostics operating segment, where the royalty rates range from 3% to 8%. These royalty expenses are recognized on an

as-earned

basis and recorded in the year earned as a component of cost of sales. Annual royalty expenses associated with these agreements were approximately $1,860, $2,107 and $2,579 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

(b)

Purchase Commitments

Excluding the operating lease commitments reflected in Note 5, we have purchase commitments primarily for inventory and service items as part of the normal course of business. Commitments made under these obligations are $26,315 for fiscal 2021 and $1,376 for fiscal 2022 through fiscal 2023. No purchase commitments have been made beyond fiscal 2023.

(c)

Litigation -

We are a party to various litigation matters from time to time that we believe are in the normal course of business. The ultimate resolution of these routine matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Additionally, the Company has also become a party to certain legal matters that are somewhat outside the normal course of business.

On April 17, 2018, Magellan received a subpoena from the United States Department of Justice (“DOJ”) regarding its LeadCare product line. The subpoena outlines documents to be produced, and the Company is cooperating with the DOJ in this matter. The Company maintains rigorous policies and procedures to promote compliance with applicable regulatory agencies and requirements and is working with the DOJ to promptly respond to the subpoena, including responding to additional information requests. The Company has executed tolling agreements to extend the statute of limitations. The Company cannot predict when the investigation will be resolved, the outcome of the investigation, or its potential impact on the Company. Approximately $2,035, $1,585 and $775 of expense for attorneys’ fees related to this matter is included within the Consolidated Statements of Operations for fiscal 2020, 2019 and 2018, respectively.

(

)

Indemnifications -

In conjunction with certain contracts and agreements, we provide routine indemnifications related to our performance obligations. The terms of these indemnifications range in duration and in some circumstances are not explicitly defined. The maximum obligation under some such indemnifications is not explicitly stated and, as a result of our having no history of paying such indemnifications, cannot be reasonably estimated. We have not made any payments for these indemnifications and no liability is recorded at September 30, 2020 or September 30, 2019.