Term Debt

6 Months Ended

Jun. 30, 2026

Term Debt

Term Debt

8. Term Debt

The 2023 Credit Agreement, 2024 Credit Agreement, March 2025 Credit Agreement, August 2025 Credit Agreement, and May 2026 Credit Agreement each contain customary affirmative and negative covenants and representations and warranties, including financial reporting obligations and certain limitations on indebtedness, liens, investments, distributions (including dividends), collateral, mergers or acquisitions and fundamental corporate changes. Each of the 2023 Credit Agreement, the 2024 Credit Agreement, the March 2025 Credit Agreement, the August 2025 Credit Agreement, and the May 2026 Credit Agreement also includes customary events of default, including payment defaults, breaches of provisions under the loan documents, certain losses or impairment of collateral and related security interests, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth therein, certain bankruptcy or insolvency events, and a material deviation from the Company’s operating budget. In addition, each of the credit agreements includes customary mandatory prepayment provisions that require the Company to apply specified proceeds received by the Company to prepay outstanding borrowings under the respective credit

facilities. Mandatory prepayment events are triggered upon the receipt of proceeds from asset sales or other dispositions, casualty or condemnation events, the incurrence of indebtedness not otherwise permitted under the agreements, or the issuance of certain equity interests.

On July 10, 2023, the Company entered into the 2023 Credit Agreement. The 2023 Credit Agreement provides for a secured term loan facility in an aggregate amount of $25.0 million at an interest rate of 14.0% per annum (the “2023 Loan”), and is scheduled to mature on June 1, 2027. Principal and accrued interest are payable at maturity. Repayment of the 2023 Loan is guaranteed by the Company’s domestic subsidiaries, and the 2023 Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The 2023 Loan was initially recognized at fair value of $21.2 million and subsequently recognized at the amortized cost net of debt issuance costs and debt discount of $3.8 million. Debt issuance costs are amortized using the effective interest method to interest expense over the term of the 2023 Loan. As of June 30, 2026 and December 31, 2025, accrued stated interest related to the 2023 Loan was approximately $10.6 million and $8.8 million, respectively.

On March 4, 2024, the Company entered into the 2024 Credit Agreement for a secured term loan facility in an aggregate amount of $35.0 million (the “2024 Loan”). The 2024 Loan bears interest at an annual rate of 14.0% and is scheduled to mature on June 1, 2027. Principal and accrued interest are payable at maturity.

Repayment of the 2024 Loan is guaranteed by the Company’s domestic subsidiaries, and the 2024 Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The 2024 Loan was initially recognized at cash proceeds of $35.0 million net of debt issuance costs of $0.1 million and is subsequently recognized at amortized cost. Debt issuance costs are amortized using the effective interest method to interest expense over the term of the 2024 Loan. As of June 30, 2026 and December 31, 2025, accrued stated interest related to the 2024 Loan was approximately $11.5 million and $9.1 million, respectively.

On March 12, 2025, the Company entered into the March 2025 Credit Agreement for a secured term loan facility in an aggregate amount of $10.0 million (the “March 2025 Loan”). The March 2025 Loan bears interest at an annual rate of 14.0% and is scheduled to mature on June 1, 2027. Principal and accrued interest are payable at maturity. Repayment of the March 2025 Loan is guaranteed by the Company’s domestic subsidiaries, and the loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The March 2025 Loan was initially recognized at cash proceeds of $10.0 million and is subsequently recognized at amortized cost. As of June 30, 2026 and December 31, 2025, accrued stated interest related to the March 2025 Loan was approximately $1.8 million and $1.1 million, respectively.

On August 11, 2025, the Company entered into the August 2025 Credit Agreement for the August 2025 Loan in an aggregate amount of $15.0 million. The August 2025 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the August 2025 Loan is guaranteed by the Company’s domestic subsidiaries, and the loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The August 2025 Loan was initially recognized at cash proceeds of $15.0 million and is subsequently recognized at amortized cost. The August 2025 Loan’s annual effective interest rate was 12.27% as of June 30, 2026. As of June 30, 2026 and December 31, 2025, accrued stated interest related to the August 2025 Loan was approximately $1.9 million and $0.8 million, respectively.

Since the 2026 Debt and Warrant Amendments constitute a TDR and the total undiscounted future cash payments under the amended debt terms exceed the carrying amount of the existing debts as of the 2026 Debt and Warrant Amendments date, no adjustment to the carrying amounts of the debts was recorded, and no gain was recognized. Instead, the Company established a revised effective interest rate based on the modified contractual cash flows. The revised effective interest rate of 36.19% was applied prospectively to all term loans to accrete the carrying amount of the term loans to their respective contractual repayment amounts at maturity.

The Company recorded a $20.6 million increase in the fair value of the warrants as a debt discount, with a corresponding increase to additional paid-in capital. The Company determined that as a result of the TDR fair value of the convertible debt not changing, the entire debt discount was allocated to the term loans using a yield-based methodology that results in a consistent effective interest rate across the amended term loans.

The debt discount is subsequently amortized to interest expense over the remaining term of the amended debts using the effective interest method.

On May 12, 2026, the Company entered into the May 2026 Credit Agreement for the May 2026 Loan in the aggregate amount of $25.0 million with Innoviva Sub. The May 2026 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. As of June 30, 2026, accrued stated interest related to the May 2026 Loan was approximately $0.5 million.

The Company estimated the increase in the fair value of the warrants associated with the 2026 Debt and Warrant Amendments utilizing the Black-Scholes valuation model with the following assumptions:

	Six Months Ended
	June 30, 2026
Risk-free interest rate	3.53%-3.84%
Expected volatility	101.61%-119.38%
Expected term (in years)	0.01-5.01
Expected dividend yield	0%