v3.26.1
Long-Term Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
13.5% Senior Secured Notes
On November 1, 2023, the Company entered into an Indenture Agreement with certain institutional investors (the “Note Holders”) and issued $45,000 aggregate principal amount of its 13.5% Notes. The Company received net proceeds of approximately $4,326 from this transaction after the repayment of the Company's 12.5% Notes and deduction of debt discount, and debt issuance costs.
The 13.5% Notes were senior secured obligations of the Company and were set to mature on November 1, 2028. The 13.5% Notes bore interest at a fixed rate of 13.5% per year, payable quarterly commencing on December 30, 2023. On each payment date commencing on June 30, 2026, the Company was to pay an installment of principal of the 13.5% Notes pursuant to a fixed amortization schedule, along with the applicable exit fee. The exit fee totaled $2,000.
On May 12, 2026, the Company issued the Term Loan Facility and used the proceeds from the issuance to repay the outstanding principal balance under the 13.5% Notes of $45,000, and $2,000 exit fee. The Company also incurred a prepayment penalty of $3,825 equal to 108.5% of the principal amount due to the timing of the redemption, and other transaction expenses. The Company recognized a loss on extinguishment of debt of $11,683 on the Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2026.
Royalty Right Agreements
In connection with the issuance of 13.5% Notes, the Company and the Note Holders entered into the Royalty Right Agreements dated as of November 1, 2023, which provides Note Holders:
a.a tiered royalty between 1.0% and 2.0% of annual worldwide net sales of Anaphylm™ (dibutepinephrine) sublingual film for a period of eight years from the first sale of Anaphylm on a global basis, and
b.a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant® (diazepam) buccal film until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant.
Both the 13.5% Notes and Royalty Right Agreements, represent freestanding instruments which were issued in conjunction with each other. They are classified as debt within the scope of ASC 470, Debt and are subsequently measured on an amortized cost basis.
The initial fair value measurement of the Royalty Right Agreements was determined based on significant unobservable inputs, including the discount rate, estimated probabilities of success, and the estimated amount of future sales of Anaphylm and Libervant. These inputs are derived using internal management estimates developed based on third-party data and reflect management’s judgment, current market conditions, and forecasts.
The Royalty Right Agreements’ fair value is estimated by applying probability-weighted cash flows for future sales, which are then discounted to present value. Changes to fair value of the Royalty Rights Agreements can result from changes to one or a number of the aforementioned inputs. A significant change in unobservable inputs could result in a material increase or decrease to the effective interest rate of the Royalty Right Agreements liability.
The following table summarizes the significant unobservable inputs used in the fair value measurement of the Royalty Right Agreements:
Valuation MethodologySignificant Unobservable InputWeighted Average (range, if applicable)
Discount Rate15%
Royalty Right AgreementsProbability weighted
income approach		Probability of Success95%
Projected Years of Payments2027-2035
During the six months ended June 30, 2026, there were no changes to the significant unobservable inputs used to recognize the Royalty Right Agreements liability. During the year ended December 31, 2025, the Company updated the probability-weighted cash flows for future sales, which decreased the royalty obligation to $51,886 and decreased the unamortized discount to $25,945. The effective interest rate changed by 2.64%, and the Company updated the projected years of payments to 2035.
Since the Royalty Right Agreements were issued in connection with the 13.5% Notes, the Company allocated the proceeds to the two instruments based on their relative fair values. The Company allocated approximately $13,856 to the Royalty Right Agreements. The Company determined the allocated fair value by calculating the present value of estimated future royalties to be paid to Note Holders over the life of the arrangement.
The excess of future estimated royalty payments over the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method.
The allocated amounts of $13,856 when combined with the exit fee of $2,000, original issue discount of $1,125 and debt issuance costs of $3,517, resulted in the 13.5% Notes discount of $20,498. This debt discount was amortized over the term of 13.5% Notes using the effective interest method.
The Royalty Right Agreements remained outstanding as of June 30, 2026 after the redemption of the 13.5% Notes.
Amortization expense arising from the discounts related to the 13.5% Notes prior to redemption for the three and six months ended June 30, 2026 was $580 and $1,834, respectively. Amortization expense arising from the discounts related to the Royalty Right Agreements for the three and six months ended June 30, 2026 was $972 and $1,945, respectively.
Amortization expense arising from the discounts related to the 13.5% Notes for the three and six months ended June 30, 2025 was $1,254 and $2,508, respectively. Amortization expense arising from the discounts related to the Royalty Right Agreements for the three and six months ended June 30, 2025 was $1,434 and $2,871, respectively.
Unamortized discounts totaled $24,000 for the Royalty obligations as of June 30, 2026. Unamortized discounts totaled $7,630 for the 13.5% Notes and $25,945 for the Royalty obligations as of December 31, 2025, respectively.
Term Loan Facility
On May 12, 2026, the Company entered into the Credit Agreement with funds managed by Oaktree Capital Management, L.P., which provided a Term Loan Facility of up to $150,000. The Term Loan Facility includes an initial funded Tranche A of $55,000 and additional delayed draw term loan commitments of up to $95,000, which are available subject to the satisfaction of specified conditions. Amounts repaid under the Term Loan Facility may not be reborrowed. The Term Loan Facility matures on May 12, 2031 and does not require principal installment payments. Accordingly, the total outstanding principal balance is payable at maturity. The obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the Company’s assets, including intellectual property, subject to customary exceptions.
On May 12, 2026, in connection with the Credit Agreement with Oaktree, the Company also entered into the Oaktree Warrant Issuance Agreement. Pursuant to this agreement, the Company issued to Oaktree, the Tranche A Warrant to purchase up to an aggregate of 230,271 shares of the Company's Common Stock at an exercise price of $4.18 per share. The Warrant is exercisable at any time from the issuance date through May 12, 2031. Management estimated the fair value of the Tranche A Warrants to be $663. Pursuant to the Oaktree Warrant Issuance Agreement, the Company will be obligated to issue additional warrants if additional tranches are drawn down under the Term Loan Facility. See Note 14, Warrants for additional information.
As the Term Loan Facility and the Tranche A Warrants were issued in conjunction with the Credit Agreement, the total proceeds of $55,000 have been allocated on the Statements of Cashflows for the six months ended June 30, 2026 among the two financial instruments.
Borrowings under the Credit Agreement accrue interest at a floating rate equal to three-month SOFR, subject to a floor of 2.75%, plus an applicable margin of 6.25%, which decreases to 6.00% upon the potential funding of Tranche B. Interest is payable quarterly in arrears. Subject to certain conditions, a portion of the interest, not to exceed 2.00% per annum, may be paid in kind for an initial period. In the event of default, the interest rate is increased by 2.00% per annum.
Upon any repayment including at maturity, upon acceleration or by prepayment, the Company shall pay an exit fee to Oaktree ranging from 1.00% to 2.00% depending on the date of the repayment. The exit fee is subject to a reduction specified in the Credit Agreement (i) if the Company achieves a specified net sales milestone by June 30, 2029 or if a payment is mandatory as a result of the Company failing to receive FDA Approval by December 31, 2027, or (ii) if the applicable repayment is made in connection with a change of control on or prior to the second anniversary of the Credit Agreement. The maximum exit fee totals $1,100.
The Company may voluntarily prepay the Term Loan Facility in full or in part subject to certain conditions. Provided that the Company pays on the date of such prepayment (a) all outstanding principal to be prepaid plus accrued and unpaid interest, (b) a yield protection premium, which, (i) prior to and including the first anniversary of the Effective Date, includes a make-whole fee (as calculated in the Credit Agreement) with respect to the interest that would have accrued on the aggregate principal amount of the Term Loans so prepaid up to (but not including) the first anniversary of the Effective Date and (ii) after the first anniversary of the Effective Date, a premium ranging from 5.00% to 1.00% depending on the date of such repayment. The Prepayment Premium is subject to a reduction specified in the Credit Agreement (x) if the Company achieves a specified net sales milestone by June 30, 2029 or if a payment is mandatory as a result of the Company failing to receive FDA Approval by December 31, 2027 or (y) if the applicable prepayment is made in connection with a change of control on or prior to the second anniversary of the Effective Date. The Prepayment Premium shall be 0% if paid after the fourth anniversary of the Effective Date.
The Company is required to maintain a minimum amount of unrestricted cash and/or permitted cash equivalent investments in controlled accounts, as set forth in the Credit Agreement., which amount lowers after the funding of the Tranche B Term Loans and if FDA approval is not received by December 31, 2027. In addition, the Company is required to achieve a minimum amount of net sales, which is applicable only if the Company draws from the Tranche B Term Loan. The Minimum Net Sales Covenant is not tested if the Company maintains specified cash levels or if it achieves a specified market capitalization.
At inception the estimated debt discount of the Term Loan Facility totaled $4,594, which includes the exit fee related to the Term Loan Facility, fair value of the Tranche A Warrants, and other estimated transaction expenses. The debt discount is presented as a direct deduction from the carrying amount of the Term Loan Facility and is amortized to interest expense over the term of the agreement using the effective interest method.
Amortization expense arising from the discounts related to the Term Loan Facility was $153 for the three and six months ended June 30, 2026. There was no amortization expense arising from the discounts related to the Term Loan Facility for the three and six months ended June 30, 2025. Unamortized discounts totaled $4,441 for the Term Loan Facility as of June 30, 2026.
Long-term debt and unamortized debt discount balances are as follows:
June 30,December 31,
20262025
Total Outstanding Debt$55,000 $45,000 
Unamortized discount, including exit fee(4,441)(7,630)
Debt, current— (9,964)
Debt, long-term50,559 27,406 
Finance lease
95 113 
Debt, long-term, net$50,654 $27,519 
Royalty obligations and unamortized discount balances are as follows:
June 30,December 31,
20262025
Total Royalty obligations
$51,886 $51,886 
Unamortized discount(24,000)(25,945)
Current portion of royalty obligation(51)— 
Royalty obligations, long term
$27,835 $25,941 
Scheduled principal payments on the Term Loan Facility as of June 30, 2026 are as follows:
2031$55,000 
Total$55,000