Assets and Liabilities Held For Sale

6 Months Ended

Jun. 30, 2025

Discontinued Operations and Disposal Groups [Abstract]

MOD3 Exclusive Option and Asset Purchase Agreement

With an effective date of January 1, 2024, the Company entered into an Option and Asset Purchase Agreement (the "Option Agreement") with Aptar on March 14, 2024, which granted Aptar an exclusive option to acquire certain of MOD3 assets related to its business of providing CDMO services to third parties, subject to certain exclusions. Aptar must exercise the Option by or before January 1, 2026. In exchange for the exclusive purchase option the partner is to provide consideration in the form of an "option fee" and "guaranteed revenue payments."

The option fee is broken into two components: A low-single digit million fee due within 30 business days of executing the agreement; and should the option not be exercised by the first anniversary of the effective date, an additional low-single digit million fee will be due at that time. The first option fee was paid in April 2024 and the second option fee was paid in February 2025. Option fee payments will be included in deferred income until the earlier of term expiration or exercise of the purchase option. Should the partner exercise the purchase option, any option fee payments made will be applied towards the purchase price.

The guaranteed revenue payments include two components: A mid-single digit million guaranteed revenue payment in 2024 and a mid-single digit million guaranteed revenue payment in 2025. The revenue is to be derived by the partner under an existing collaboration agreement, and the partner is to pay the difference should the minimum amount not be met each year. Each year's guaranteed revenue amount is to be paid in two installments semi-annually each year. Should revenue exceed the 2024 or 2025 guaranteed revenue amounts after receiving a difference payment in the first half of the year, we must repay the partner the amount of such overpayment. There was $0.2 million guaranteed revenue recognized during the three and six months ended June 30, 2025 and $0.4 million guaranteed revenue recognized during the three and six months ended June 30, 2024.

As the Company expected Aptar to exercise the Option within 12 months from December 31, 2024, certain assets and liabilities of the MOD3 business were classified as held for sale as of December 31, 2024. The assets and liabilities held for sale as of June 30, 2025, represent the major operating assets and liabilities of the MOD3 business (i.e. the majority of the Pharmaceutical Development segment) and as such, when the Option is exercised, this segment of the business will no longer exist and only the specialty finance business will remain. The decision to enter into the Option and Asset Purchase Agreement was made to align with the overall strategy to focus on the specialty finance business.

The following table summarizes the assets and liabilities held for sale:


	June 30, 2025		December 31, 2024
Assets:
Inventory	$	374	$	354
Property & equipment, net	4,755		4,635
Intangible assets, net	209		209
Other non-current assets	1,150		1,200
Total assets held for sale, net	$	6,488	$	6,398

Liabilities:
Accounts payable & accrued liabilities	$	263	$	268
Other non-current liabilities	1,015		987
Total liabilities held for sale	$	1,278	$	1,255

During neither the six months ended June 30, 2025 nor the year ended December 31, 2024, there was not a strategic shift for the Company, and accordingly, the Pharmaceutical Development segment does not meet the criteria to be classified as a discontinued

operation. As a result, we will continue to report our operational results for the Pharmaceutical Development segment until the sale. The following table shows the net loss before taxes for MOD3 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net loss before taxes	$	18	$	(1,736)	$	(518)	$	(3,192)

On July 15, 2025, the Company, MOD3, and Aptar closed the asset purchase agreement (the "Purchase Agreement") for the sale and assignment of the Assets to Aptar (the "Asset Sale") for an aggregate purchase price of approximately $6.9 million which includes cash previously paid by Aptar in accordance with the Option Agreement.