NOTE 10 GRANT COLLABORATON AGREEMENT

On February 10, 2021, the Company received a grant for up to $2.17 million from the CFF to advance the clinical development of high concentration NO for the treatment of Nontuberculous Mycobacteria, or NTM pulmonary disease, which disproportionally affects cystic fibrosis patients. Under the terms of the agreement, the funding will be allocated to the ongoing LungFit^® GO NTM pilot study. The grant provides milestones based upon the achievement of performance steps and requirements under a development program. The grant provides for royalty payments to CFF upon the commercialization of any product developed under the grant program at a rate of 10% of net sales. The cumulative royalties are capped at four times the grant actually paid to the Company. A total of $1,510 thousand has been recognized as a reduction of R&D costs from this grant to date, including $181 thousand and $338 thousand in the three and six months respectively, ended September 30, 2022.