7. Intangibles, net

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The Company’s finite-lived intangible assets consist of intangible assets acquired by Journey. During the six months ended June 30, 2023, Journey experienced lower net product revenues and gross profit levels for its Ximino products. Based on these results, Journey revised the financial outlook and plans for its Ximino products. Journey assessed the revised forecast for Ximino and determined that this constituted a triggering event and the results of the analysis indicated the carrying amount was not expected to be recovered. Journey recorded an intangible asset impairment charge of $3.1 million during the three months ended June 30, 2023. This non-cash charge was recorded to loss on impairment of intangible assets on the unaudited condensed consolidated statements of operations.

VYNE Therapeutics Product Acquisition (“VYNE Product Acquisition”)

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In January 2022, Journey entered into an agreement with VYNE Therapeutics, Inc. (“VYNE”) to acquire two FDA-Approved Topical Minocycline Products, Amzeeq (minocycline) topical foam 4%, and Zilxi (minocycline) topical foam 1.5%, and a Molecule Stabilizing Technology^TM  proprietary platform from VYNE for an upfront payment of $20.0 million and an additional $5.0 million payment on the one (1)-year anniversary of the closing (the "VYNE Product Acquisition Agreement"). This expanded Journey’s product portfolio to eight marketed branded dermatology products.  Journey also acquired certain associated inventory.

The VYNE Product Acquisition Agreement also provides for contingent net sales milestone payments. In the first calendar year in which annual sales reach each of $100 million, $200 million, $300 million, $400 million and $500 million, a one-time payment of $10 million, $20 million, $30 million, $40 million and $50 million, respectively, will be paid in that year only, per product, totaling up to $450 million. In addition, Journey will pay VYNE 10% of any upfront payment received by Journey from a licensee or sublicensee of the products in any territory outside of the United States, subject to exceptions for certain jurisdictions as detailed in the VYNE Product Acquisition Agreement.

The following table summarizes the aggregate consideration transferred for the assets acquired by Journey in connection with the VYNE Product Acquisition Agreement:

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The fair value of the deferred cash payment was accreted to the $5.0 million January 2023 cash payment over a one-year period through interest expense. Journey made the $5 million deferred cash payment in January 2023.

The following table summarizes the assets acquired in the VYNE Product Acquisition Agreement:

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The intangible assets acquired as part of the VYNE Product Acquisition Agreement were valued using an income approach, while the inventory was valued using a final sales value less cost to dispose approach.

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The table below provides a summary of the Journey intangible assets as of June 30, 2023 and December 31, 2022, respectively:

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For the three months ended June 30, 2023 and 2022, Journey’s amortization expense related to its product licenses was $1.1 million and $1.0 million, respectively. For the six months ended June 30, 2023 and 2022, Journey’s amortization expense related to its product licenses was $2.1 million and $2.0 million, respectively. Journey records amortization expense related to its product licenses as a component of cost of goods sold on the unaudited condensed consolidated statement of operations.

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The future amortization of these intangible assets is as follows:

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