Notes Receivable	9 Months Ended
Sep. 30, 2023
Receivables [Abstract]
Notes Receivable	6. Notes Receivable Convertible notes receivable - related party IntelGenx Convertible Notes On August 30, 2023, the Company and IntelGenx entered into the Subscription Agreement (as defined in Note 5), under which the Company paid IntelGenx $2.2 million for 2,220 convertible debenture units (the "Initial Units"), with each convertible debenture unit consisting of: (i) $1,000 principal amount convertible promissory notes (the “2023 Initial Notes”) bearing interest at a rate of 12.0% per annum, payable quarterly in arrears beginning September 30, 2023, with all principal and accrued interest convertible into common shares of IntelGenx, at any time from the date that is six months following their issuance up to and including August 31, 2026 at a conversion price equal to $0.185 per common share; and (ii) 5,405 common share purchase warrants of IntelGenx, each exercisable at an exercise price of $0.26 per common share for a period of three years following their issuance. There are certain conversion limits in connection with the 2023 Initial Notes as it relates to the 2023 Initial Notes and the other IntelGenx instruments held by the Company. See Note 5 for further discussion of these conversion limits. The Company is eligible to elect the fair value option to account for its investment in the 2023 Initial Notes and believes that the fair value option better reflects the underlying economics of the 2023 Initial Notes. At September 30, 2023, the Company recorded the $1.5 million fair value of the 2023 Initial Notes in Convertible notes receivable - related party on the condensed consolidated balance sheets. The 2023 Initial Notes will be subsequently remeasured at each reporting date until settled or converted. The Company will recognize accrued interest and subsequent changes in fair value of the 2023 Initial Notes in Changes in fair value of convertible notes receivable - related party in its consolidated statements of operations. During the three months ended September 30, 2023, the Company recorded a $0.1 million change in fair value of Convertible notes receivable - related party for the interest accrued on the 2023 Initial Notes. Long Term Notes Receivable – Related Parties, net IntelGenx Term Loan In March 2021, the Company and IntelGenx entered into a loan agreement (the "Original Loan Agreement") under which the Company provided a loan to IntelGenx for an aggregate principal amount of $2.0 million. In May 2021, the Company paid an additional advance of $0.5 million as an additional term loan. In September 2021, the Company entered into an amended and restated loan agreement which, among other things, increased the principal amount of loans available to IntelGenx by $6.0 million, for a total of up to $8.5 million. The additional $6.0 million loan amount was funded via two separate $3.0 million tranches. The first $3.0 million tranche was funded in January 2022 and the second $3.0 million tranche was funded in January 2023. The loan bears an annualized interest rate of 8% and such interest is accrued daily. On August 31, 2023, the Company and IntelGenx entered into the first amendment to the amended and restated loan agreement (the "First Amendment") which, among other things, extended the maturity date from January 5, 2024 to January 5, 2025 and granted the Company additional security over any non-licensed intellectual property owned or controlled by IntelGenx. The Company determined that this modification does not have a material impact on the amortized cost basis of the IntelGenx Term Loan (as defined below). Effective September 30, 2023, the Company and IntelGenx entered into a second amendment to the amended and restated loan agreement (the "Second Amendment", and together with the Original Loan Agreement and the First Amendment, the "IntelGenx Term Loan") which, among other things, entitles the Company to convert any portion of the outstanding and unpaid principal and accrued interest into common shares of IntelGenx at a conversion price per share of $0.185 (the "Conversion Feature"). In November 2023, the Autorité des marchés financiers informed IntelGenx that it considers the Second Amendment to be subject to the minority vote prescribed by applicable Canadian securities regulations. Therefore, the IntelGenx shareholder approval is required for the Company to be able to exercise its rights to the Conversion Feature available under the Second Amendment, and the Company will not account for the Second Amendment until required shareholder approval is obtained. See Note 5 for additional information about the required shareholder approvals. Pursuant to the terms of the IntelGenx Term Loan, upon the occurrence of an event of default, the Company may accelerate the IntelGenx Term Loan and declare the principal and any accrued and unpaid interests of the IntelGenx Term Loan to be immediately due and payable. In addition, IntelGenx may prepay the IntelGenx Term Loan in whole or in part at any time without premium or penalty. Any prepayment of the principal shall be accompanied by a payment of interest accrued to date thereon. The Company concluded that these embedded features do not meet the criteria to be bifurcated and separately accounted for as derivatives. As of September 30, 2023, the IntelGenx Term Loan was recorded in Long term notes receivable – related parties, net on the Company's condensed consolidated balance sheets, which includes the principal balance of the IntelGenx Term Loan, accrued interest and allowance for credit losses. On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses and applied a modified-retrospective transition approach through a cumulative-effect adjustment to retained earnings of $0.4 million, representing the allowance for credit losses for the IntelGenx Term Loan. During the three and nine months ended September 30, 2023 and 2022, the Company recorded an immaterial increase to the allowance. In its assessment of the IntelGenx Term Loan and related amendments at September 30, 2023, the Company determined that IntelGenx was experiencing indicators of financial difficulties. However, considering the underlying collateral and other settlement terms available, the Company does not deem it probable that it will not collect the IntelGenx Term Loan balance from IntelGenx. For the three months ended September 30, 2023 and 2022, the Company recognized $0.2 million and $0.1 million of interest income, respectively, associated with the IntelGenx Term Loan. For the nine months ended September 30, 2023 and 2022, the Company recognized $0.5 million and $0.3 million of interest income, respectively, associated with the IntelGenx Term Loan. As of September 30, 2023 and December 31, 2022, the IntelGenx Term Loan has an outstanding principal balance of $8.5 million and $5.5 million, respectively. DemeRx Promissory Note In January 2020, DemeRx IB loaned to DemeRx Inc. $1.0 million pursuant to the terms of a Promissory Note (the "DemeRx Note"). Pursuant to the terms of the DemeRx Note, the aggregate principal amount of $1.0 million together with all accrued and unpaid interest and any other amounts payable are due to be paid on the date that is the earlier of (i) 5 years from the initial closing and (ii) the closing of an initial public offering or a deemed liquidation event of DemeRx IB (the “DemeRx Maturity Date”). Pursuant to the terms of the DemeRx Note, DemeRx Inc. may, in its sole discretion pay any amount due under the DemeRx Note, in cash or through cancellation shares of common stock of DemeRx IB, par value $0.0001 per share, of the fair market value of such shares. The Company recorded the DemeRx Note at cost which included the principal balance of the DemeRx Note and accrued interest in Long term notes receivable - related parties, net on its condensed consolidated balance sheets. On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses and applied a modified-retrospective transition approach through a cumulative-effect adjustment to retained earnings of $0.1 million, representing the allowance for credit losses for the DemeRx Note. During the three and nine months ended September 30, 2023, the Company recorded an immaterial increase to the allowance. For the three and nine months ended September 30, 2023 and 2022, the Company did not recognize any interest income associated with the DemeRx Note. As of September 30, 2023, and December 31, 2022, respectively, the DemeRx Note had an outstanding balance of $1.1 million and $1.1 million, respectively.

Notes Receivable

9 Months Ended

Sep. 30, 2023

6. Notes Receivable

Convertible notes receivable - related party

IntelGenx Convertible Notes

On August 30, 2023, the Company and IntelGenx entered into the Subscription Agreement (as defined in Note 5), under which the Company paid IntelGenx $2.2 million for 2,220 convertible debenture units (the "Initial Units"), with each convertible debenture unit consisting of:

(i) $1,000 principal amount convertible promissory notes (the “2023 Initial Notes”) bearing interest at a rate of 12.0% per annum, payable quarterly in arrears beginning September 30, 2023, with all principal and accrued interest convertible into common shares of IntelGenx, at any time from the date that is six months following their issuance up to and including August 31, 2026 at a conversion price equal to $0.185 per common share; and

(ii) 5,405 common share purchase warrants of IntelGenx, each exercisable at an exercise price of $0.26 per common share for a period of three years following their issuance.

There are certain conversion limits in connection with the 2023 Initial Notes as it relates to the 2023 Initial Notes and the other IntelGenx instruments held by the Company. See Note 5 for further discussion of these conversion limits.

The Company is eligible to elect the fair value option to account for its investment in the 2023 Initial Notes and believes that the fair value option better reflects the underlying economics of the 2023 Initial Notes. At September 30, 2023, the Company recorded the $1.5 million fair value of the 2023 Initial Notes in Convertible notes receivable - related party on the condensed consolidated balance sheets. The 2023 Initial Notes will be subsequently remeasured at each reporting date until settled or converted. The Company will recognize accrued interest and subsequent changes in fair value of the 2023 Initial Notes in Changes in fair value of convertible notes receivable - related party in its consolidated statements of operations. During the three months ended September 30, 2023, the Company recorded a $0.1 million change in fair value of Convertible notes receivable - related party for the interest accrued on the 2023 Initial Notes.

Long Term Notes Receivable – Related Parties, net

IntelGenx Term Loan

In March 2021, the Company and IntelGenx entered into a loan agreement (the "Original Loan Agreement") under which the Company provided a loan to IntelGenx for an aggregate principal amount of $2.0 million. In May 2021, the Company paid an additional advance of $0.5 million as an additional term loan. In September 2021, the Company entered into an amended and restated loan agreement which, among other things, increased the principal amount of loans available to IntelGenx by $6.0 million, for a total of up to $8.5 million. The additional $6.0 million loan amount was funded via two separate $3.0 million tranches. The first $3.0 million tranche was funded in January 2022 and the second $3.0 million tranche was funded in January 2023. The loan bears an annualized interest rate of 8% and such interest is accrued daily.

On August 31, 2023, the Company and IntelGenx entered into the first amendment to the amended and restated loan agreement (the "First Amendment") which, among other things, extended the maturity date from January 5, 2024 to January 5, 2025 and granted the Company additional security over any non-licensed intellectual property owned or controlled by IntelGenx. The Company determined that this modification does not have a material impact on the amortized cost basis of the IntelGenx Term Loan (as defined below).

Effective September 30, 2023, the Company and IntelGenx entered into a second amendment to the amended and restated loan agreement (the "Second Amendment", and together with the Original Loan Agreement and the First Amendment, the "IntelGenx Term Loan") which, among other things, entitles the Company to convert any portion of the outstanding and unpaid principal and accrued interest into common shares of IntelGenx at a conversion price per share of $0.185 (the "Conversion Feature").

In November 2023, the Autorité des marchés financiers informed IntelGenx that it considers the Second Amendment to be subject to the minority vote prescribed by applicable Canadian securities regulations. Therefore, the IntelGenx shareholder approval is required for the Company to be able to exercise its rights to the Conversion Feature available under the Second Amendment, and the Company will not account for the Second Amendment until required shareholder approval is obtained. See Note 5 for additional information about the required shareholder approvals.

Pursuant to the terms of the IntelGenx Term Loan, upon the occurrence of an event of default, the Company may accelerate the IntelGenx Term Loan and declare the principal and any accrued and unpaid interests of the IntelGenx Term Loan to be immediately due and payable. In addition, IntelGenx may prepay the IntelGenx Term Loan in whole or in part at any time without premium or penalty. Any prepayment

of the principal shall be accompanied by a payment of interest accrued to date thereon. The Company concluded that these embedded features do not meet the criteria to be bifurcated and separately accounted for as derivatives.

As of September 30, 2023, the IntelGenx Term Loan was recorded in Long term notes receivable – related parties, net on the Company's condensed consolidated balance sheets, which includes the principal balance of the IntelGenx Term Loan, accrued interest and allowance for credit losses. On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses and applied a modified-retrospective transition approach through a cumulative-effect adjustment to retained earnings of $0.4 million, representing the allowance for credit losses for the IntelGenx Term Loan. During the three and nine months ended September 30, 2023 and 2022, the Company recorded an immaterial increase to the allowance. In its assessment of the IntelGenx Term Loan and related amendments at September 30, 2023, the Company determined that IntelGenx was experiencing indicators of financial difficulties. However, considering the underlying collateral and other settlement terms available, the Company does not deem it probable that it will not collect the IntelGenx Term Loan balance from IntelGenx.

For the three months ended September 30, 2023 and 2022, the Company recognized $0.2 million and $0.1 million of interest income, respectively, associated with the IntelGenx Term Loan. For the nine months ended September 30, 2023 and 2022, the Company recognized $0.5 million and $0.3 million of interest income, respectively, associated with the IntelGenx Term Loan. As of September 30, 2023 and December 31, 2022, the IntelGenx Term Loan has an outstanding principal balance of $8.5 million and $5.5 million, respectively.

DemeRx Promissory Note

In January 2020, DemeRx IB loaned to DemeRx Inc. $1.0 million pursuant to the terms of a Promissory Note (the "DemeRx Note"). Pursuant to the terms of the DemeRx Note, the aggregate principal amount of $1.0 million together with all accrued and unpaid interest and any other amounts payable are due to be paid on the date that is the earlier of (i) 5 years from the initial closing and (ii) the closing of an initial public offering or a deemed liquidation event of DemeRx IB (the “DemeRx Maturity Date”). Pursuant to the terms of the DemeRx Note, DemeRx Inc. may, in its sole discretion pay any amount due under the DemeRx Note, in cash or through cancellation shares of common stock of DemeRx IB, par value $0.0001 per share, of the fair market value of such shares.

The Company recorded the DemeRx Note at cost which included the principal balance of the DemeRx Note and accrued interest in Long term notes receivable - related parties, net on its condensed consolidated balance sheets. On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses and applied a modified-retrospective transition approach through a cumulative-effect adjustment to retained earnings of $0.1 million, representing the allowance for credit losses for the DemeRx Note. During the three and nine months ended September 30, 2023, the Company recorded an immaterial increase to the allowance.

For the three and nine months ended September 30, 2023 and 2022, the Company did not recognize any interest income associated with the DemeRx Note. As of September 30, 2023, and December 31, 2022, respectively, the DemeRx Note had an outstanding balance of $1.1 million and $1.1 million, respectively.