6.Long – Term Obligations

Senior Secured Term Loan

In March 2026, the Company entered into the Loan Agreement with the Collateral Agent, BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon and the guarantors party thereto. The Loan Agreement provides for a five-year senior secured term loan, which matures on March 27, 2031 (“Term Loan Maturity Date”), for up to $250.0 million and consists of five tranches (collectively, the “Term Loans”). Two of the tranches are committed tranches: (i) Tranche A in an aggregate of $75.0 million, which was funded on the date the Loan Agreement was executed; and (ii) Tranche B in an aggregate of $50.0 million (and up to an additional $25.0 million that the Company may elect to draw), which is available until November 1, 2027, subject to the occurrence of certain approval conditions (the “Tranche B/C Approval Condition”).

Three of the tranches may be drawn upon at the discretion of the Company: (i) Tranche C in an aggregate of $25.0 million (less any amounts elected to be (and actually) drawn under Tranche B in excess of $50.0 million), which is available until April 28, 2028; (ii) Tranche D in an aggregate of $50.0 million, which is available until October 30, 2028; and (iii) Tranche E in an aggregate of $50.0 million, which is available until April 30, 2029. Tranche C through E are subject to the occurrence of certain approval conditions and achievements of certain milestones in respect of certain net sales levels.

The Loan Agreement bears interest at annual interest rate of 3-month secured overnight financing rate (“SOFR”) subject to a 3.25% floor, plus 5.75% payable quarterly in arrears. The Company may elect for 100% of the interest for the first 24 months following the Tranche A Loan funding date to be paid-in-kind without an increase in the interest rate.

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The Company is required to pay a funding fee equal to (i) 2.00% of the funding amount of the Tranche A on the funding date of such loan, (ii) 2.00% of $50,000,000 of the funding amount of the Tranche B on the funding date for such loan, (iii) 1.00% of any amounts in excess of $50,000,000 of the funding amount for the Tranche B on the funding date for such loan, and (iv) 1.00% of each of the funding amount of the Tranche C, Tranche D, and Tranche E on each respective funding date.

The Company paid the funding fee of $1.5 million for Tranche A as of March 31, 2026.

The Company’s obligations under the Loan Agreement are secured by substantially all of its assets, including its intellectual property, and are guaranteed by certain of its subsidiaries, each of which has pledged substantially all of their assets, including intellectual property, to secure such guarantee. The Company is also obligated to maintain a liquidity of not less than $50.0 million, immediately following the Tranche A closing date and until the satisfaction of the Tranche B/C Approval Condition.

The Company determined that all of the embedded features identified in the Loan Agreement were either clearly or closely related to the debt host and did not require bifurcation as a derivative liability, or the fair value of the bifurcated features was immaterial to the Company’s condensed consolidated financial statements.

The Company received net proceeds of $73.0 million after deducting discounts and debt issuance costs as of March 31, 2026. No repayment of principal or payment of interest was made during the three months ended March 31, 2026.

The following table reflects the Company’s senior secured term loan as of March 31, 2026 (in thousands):

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The carrying value of the outstanding liability, which bears a variable interest rate indexed to the 3-month SOFR, approximates fair value as it reprices when market interest rates change and represents a Level 2 measurement within the fair value hierarchy.

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The Company incurred $2.9 million of debt discounts and issuance costs, which were capitalized and deferred when incurred and subsequently amortized over the term of the Loan Agreement. The effective interest rate of the Loan Agreement, including the amortization of the debt issuance cost was 11.06% for the three months ended March 31, 2026. Interest expense in relation to the Loan Agreement, including amortization of debt discounts and issuance costs amortization is as follows (in thousands):

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Pursuant to the Loan Agreement, each tranche may be voluntarily prepaid at any time, in whole or subject to certain conditions, in part, prior to the Term Loan Maturity Date. Prepayments are subject to an amount equal to the sum of all interest that would have been accrued and payable from such date of prepayment through the second year anniversary of each respective tranche’s closing date on the amount of principal prepaid, using an interest rate in effect on such date.

Pursuant to the Loan Agreement, each tranche has a required prepayment premium, in an amount equal to the product of the amount of any prepaid principal, multiplied by: (i) if prepayment occurs prior to the third year anniversary of each respective tranche’s closing date, 3%; (ii) if prepayment occurs on or after the third year anniversary of each respective tranche's closing date but prior to the fourth year anniversary of each respective tranche's closing date, 2%; and (iii) if prepayment occurs on or after the four year anniversary of each respective tranche’s closing date but prior to the Term Loan Maturity Date, 1%.

Pursuant to the Loan Agreement, each tranche has a required exit consideration fee, with respect to any prepayment, repayment or as a result of the acceleration of maturity, an amount equal to the product of the amount of principal prepaid or repaid, multiplied by 1% to 2% based on the specific tranche. The Loan Agreement requires repayment in full of all term loans in four equal payments commencing on September 30, 2028 to the extent the Tranche B/C Approval Condition is not met on or prior to June 30, 2028.

The Loan Agreement contains customary prepayment fees and provisions, events of default, including a material adverse change to the Company, and representations, warranties and covenants, including financial covenants. The financial covenants include (i) at all times prior to the satisfaction of the Tranche B/C Approval Condition, a minimum liquidity requirement and (ii) subject to the outstanding aggregate principal amount of Term Loans advanced under the Loan Agreement being equal to or greater than $200.0 million, a minimum trailing twelve months consolidated net revenue covenant.

As of March 31, 2026, the Company was in compliance with its debt covenants under the Loan Agreement.

Convertible Senior Notes

In March 2026, the Company issued an aggregate principal amount of $200.0 million of 2.50% convertible senior notes due 2032 (the “Convertible Notes”) with multiple individual investors (the “Holders”) in an underwritten public offering. The Convertible Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated March 31, 2026, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of March 31, 2026, between the Company and the Trustee.

The Convertible Notes are general, unsecured, senior obligations of the Company. The Convertible Notes bear interest at 2.50% per annum, to be paid semi-annually in arrears on April 1 and October 1 of each year, beginning October 1, 2026. In addition, special interest will accrue on the notes upon the occurrence of certain events relating to the Company’s failure to file certain reports with the SEC as provided in the Indenture. The Convertible Notes mature on April 1, 2032 (the “Convertible Notes Maturity Date”), unless earlier converted, redeemed or repurchased by the Company.

The Holders may convert their notes into shares of common stock, at their option only in the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2026; if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding quarter; (ii) during the five consecutive business days immediately after any 10 consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sales price per share of the common stock on such trading day and the conversion rate on such trading day; (iii) upon the occurrence of certain corporate events or distributions of the Company’s common stock; (iv) if the Company calls such notes for redemption; and (v) at any time from, and including January 1, 2032 until the close of business on the scheduled trading day immediately before the  Convertible Notes Maturity Date.  

The Convertible Notes are redeemable, in whole or in part, subject to certain limitations, at the Company’s option any time and from time to time, on or after April 8, 2030 and on or before the twenty-sixth scheduled trading day immediately before the Convertible Notes Maturity Date, at a cash redemption price equal to the principal amount of Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice.  However, the Company may not redeem less than all of the outstanding Convertible Notes unless at least $75.0 million aggregate principal amount of the Convertible Notes are outstanding and not called for redemption. In addition, calling any note for redemption will constitute a Make-Whole Fundamental Change, in which case the conversion rate applicable to the conversion of the note will be increased in certain circumstances if it is converted after it is called for redemption.  

The initial conversion rate is 37.7358 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $26.50 per share, and is subject to adjustment as described in the indenture.  However, if a fundamental change occurs, generally a change of control, merger, consolidation, asset sale or similar transaction, takes place prior to April 1, 2030, and it results in the Convertible Notes immediately being due, the noteholders may be entitled to an increase in the conversion rate (“Make-Whole Rate”). The amount of the increase is determined pursuant to the contractual make-whole table based on the effective date of the transaction. No increase in the conversion rate will be provided if the stock price used to determine the adjustment is greater than $160.00 per share or less than $20.00 per share of common stock and the conversion rate as increased to the Make-Whole provision will not exceed 50.00 shares of common stock per $1,000 principal amount of the Convertible Notes.

The Company will settle conversions by paying or delivering cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. If the Company elects to deliver cash or a combination of cash and shares of its common stock, then the consideration due upon conversion will be determined over a period consisting of 25 volume-weighted average price (“VWAP”) trading days.

The Convertible Notes were accounted for in accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options (“ASC 470-20”) and ASC Subtopic 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 81-40, to qualify for equity classification (or non-bifurcation, if embedded), the instrument (or embedded feature) must be both (i) indexed to the issuer’s stock and (ii) meet the requirements of the equity classification guidance. Based upon our analysis, it was determined that the Convertible Notes do contain embedded features indexed to our common stock, but do not meet the requirements for bifurcation, and therefore do not need to be separately accounted for as an equity component. Since the embedded conversion feature meets the equity scope exception from derivative accounting, and, also since the embedded conversion option does not need to be separately accounted for as an equity component under ASC 470-20, the proceeds from the issuance of the Convertible Notes were recorded as a liability.

The Company incurred issuance costs related to the Convertible Notes of $6.4 million, which was recorded as debt issuance costs and were included as a reduction to the Convertible Notes on the unaudited condensed consolidated balance sheet. The debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the Convertible Notes, resulting in an effective interest rate of 3.07% as of March 31, 2026.

The outstanding balance of the Convertible Notes consisted of the following as of March 31, 2026 (in thousands):

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The carrying value of the convertible notes approximates the fair value and was determined based on the actual last traded price of the underlying shares of common stock and represents a Level 1 measurement within the fair value hierarchy.

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For the three months ended March 31, 2026, no interest expense was recognized.

The indenture contains customary events of default and covenants, including (i) certain payment defaults on the notes (ii) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (iii) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $30,000,000; (iv) certain final judgments being rendered against the Company or any of its significant subsidiaries for the payment of at least $30,000,000, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; and (v) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries.

As of March 31, 2026, the Company was in compliance with its covenants under the Indenture.