This error message is usually followed by a second message that indicates your license will be deactivated (revoked). If deactivation is automatic, ExtendSim will launch after you quit and restart. If deactivation can't be accomplished automatically, you will need to do a manual deactivation. In either case, the issue will continue to happen until the original problem is resolved.
The error is caused by one of these issues with the license file (extendsim.lic):
To fix: