7.  Investment

The Company owns common and preferred shares of DepYmed, Inc. (“DepYmed”), which in aggregate represents approximately 13% ownership of DepYmed. In addition, the Company is entitled to hold one of the six seats on DepYmed’s board of directors.

In February 2021, the Company sold certain intellectual property to DepYmed in exchange for shares of Series A-4 preferred stock. The Company recognized a gain of $0.3 million related to the sale, which was recorded in other income (expense) on the Company’s unaudited condensed consolidated statement of operations during the nine months ended June 30, 2021.

The Company accounts for its investment in DepYmed common shares using the equity method of accounting and records its proportionate share of DepYmed’s net income and losses in the accompanying unaudited condensed consolidated statements of operations. Equity in losses for the three months ended June 30, 2021 and 2020 were approximately $0.04 million and $0.1 million, respectively. Equity in losses for the nine months ended June 30, 2021 and 2020 were approximately $0.1 million and $0.2 million, respectively.

The Company accounts for its investment in preferred shares of DepYmed at cost, less any impairment, as the Company determined the preferred stock did not have a readily determinable fair value.

As of June 30, 2021 and September 30, 2020, the carrying amount of the Company’s aggregate investment in DepYmed was $0.5 million and $0.3 million, respectively.