NOTE 19. SUBSEQUENT EVENTS

Milestone payment to Dr Reddy upon FDA approval of Emrosi

On November 4, 2024, the Company received FDA approval for Emrosi, its product for the treatment of papulopustular rosacea. Pursuant to the DFD-29 Agreement, the Company is contractually obligated to pay DRL contingent regulatory, commercial, and corporate-based milestone payments and royalties. The approval of Emrosi by the FDA on November 4, 2024, triggered a $15.0 million milestone payment obligation to DRL that is due 30 days after FDA approval. Milestone payments made upon regulatory approval are capitalized and amortized over the remaining useful life of the related product. The approval of Emrosi by the FDA also triggered the requirement of the Company to draw on the remaining $5.0 million under the SWK Credit Facility. As of the date of issuance of these financial statements, the Company has not drawn on this amount.