NOTE 16. XIMINO SETTLEMENT

In August 2024, the Company executed a settlement agreement (the “Settlement Agreement”) to settle amounts owed by the Company to Sun Pharmaceutical Industries, Inc. (“Sun”) pursuant to the Ximino Asset Purchase Agreement. The Company owed $3.0 million of license installment payments to Sun associated with the license of Ximino. Pursuant to the Settlement Agreement, the Company agreed to settle the total outstanding obligation owed to Sun for a total of $1.9 million, payable in three installments: 1) $625.0 thousand upon execution of the Settlement Agreement, 2) $625.0 thousand on December 1, 2024, and 3) $625.0 thousand on January 15, 2025. The Company accounted for the settlement of the license installment payment as a gain of $1.1 million for the difference between the carrying value of the license installment payments of $3.0 million and the settlement amount of $1.9 million. The Company recorded the difference of $1.1 million as a Gain on extinguishment of debt in the Condensed Consolidated Statements of Operations.