9. Debt and Interest

Debt

Total debt consists of the following:

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As of December 31, 2025, the carrying value of the notes payable approximates their fair value as the interest rate is variable and approximates the market rate for loans with similar terms and risk characteristics.

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2024 Oaktree Note

On July 25, 2024, Fortress entered into the $50.0 million senior secured credit agreement (the “2024 Oaktree Agreement”) with Oaktree Fund Administration, LLC and the lenders from time-to-time party thereto (collectively, “Oaktree”). On December 12, 2025, Fortress entered into the First Amendment to the 2024 Oaktree Agreement (the “First Oaktree Amendment”), which provided for, among other things, an extension of the maturity date to June 30, 2028, and an adjustment to the minimum net sales covenant. The First Amendment was accounted for as a modification and did not have a material impact on the financial statements. On February 22, 2026, the Company entered in the Second Amendment to the 2024 Oaktree Agreement (the “Second Oaktree Amendment” and, together with the 2024 Oaktree Agreement and the First Oaktree Amendment, the “New Oaktree Agreement”), which provided for, among other things, the elimination of certain financial covenants once Fortress has received the distribution of proceeds from Cyprium following the closing of the sale of Cyprium’s priority review voucher and the outstanding principal balance of the Oaktree loan is less than or equal to $15.0 million (see Note 20).

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The Company borrowed $35.0 million under the New Oaktree Agreement on the Closing Date (the “2024 Oaktree Note”) and is eligible to draw up to an additional $15.0 million at the lenders’ discretion to support future business development activities. The 2024 Oaktree Note replaced the 2020 Oaktree Note (as defined below), with respect to which the remaining $50.0 million balance was repaid in full.

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Under the terms of the New Oaktree Agreement, as amended, the loans have a 41-month interest-only period with a maturity date of June 30, 2028, and bear interest at an annual rate equal to the 3-month Secured Overnight Financing Rate (SOFR) plus 7.625% (subject to a 2.50% SOFR floor and a 5.75% SOFR cap). At December 31, 2025, the interest rate applicable to the 2024 Oaktree Note was 11.6%. The Company is required to make quarterly interest-only payments until the maturity date, except 12.5% of the then-outstanding principal balance of the loans is due on September 30, 2027, 12.5% of the principal balance of the loans is due on December 30, 2027, 37.5% of the principal balance of the loans is due on March 31, 2028, with the remaining principal amount due on the maturity date.

The Company may voluntarily prepay, in whole or in part, the amounts due under the New Oaktree Agreement, as amended, at any time subject to a prepayment fee. Subject to prior written notice by the Company, to repay any amounts due prior to the maturity date, the Company must pay the sum of (A) the aggregate principal amount of the Loans being prepaid, (B) any accrued but unpaid interest on the principal amount of the Loans being prepaid, (C) any applicable Yield Protection Premium (as defined in the New Oaktree Agreement) and (D) if applicable, other unpaid amounts then due and owing pursuant to the New Oaktree Agreement and the other loan documents (such aggregate amount, the “Prepayment Price”); provided that each partial prepayment of the principal amount of the Loans shall be in an aggregate amount of at least $5.0 million and integral multiples of $1.0 million in excess thereof. The Company is required to make mandatory prepayments of the Loans with net cash proceeds from (i) certain casualty events, (ii) certain monetization events, including, among other things, certain asset sales and the sale(s) of priority review vouchers by certain subsidiaries of the Company, and the receipt by the Company of any dividend or other distributions in cash from any of its subsidiaries in excess of $5.0 million other than in connection with certain monetization events, (iii) debt issuances that are not permitted, and (iv) failure to comply with certain covenants. The lenders may elect to receive warrants to purchase common stock of the Company as an alternative to cash prepayments in some situations where a mandatory prepayment would otherwise be required. Due to the receipt of proceeds from the sale of Checkpoint (see Note 3), the Company made payments to Oaktree comprised of: $5.5 million in principal, $0.1 million in interest, and $0.3 million in Yield Protection Premium.

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The New Oaktree Agreement, as amended, contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions. In addition, the New Oaktree Agreement contains certain financial covenants, including, (i) a requirement that the Company maintain a minimum liquidity of $7.0 million, which may be reduced or increased as described in the New Oaktree Agreement (“the “Liquidity Requirement”), and (ii) that product net sales of Journey meet a consolidated minimum net sales amount on a trailing 12-month basis, tested quarterly, which may be reduced or increased as described in the Oaktree Amendment (the “Minimum Net Sales Test”), subject to certain exclusions. The minimum net sales amount for December 31, 2025 is $60 million and will increase by $5.0 million each subsequent quarter, provided that the minimum net sales amount will in no event exceed $80.0 million. Both the Minimum Net Sales Test and the Liquidity Requirement will be reduced to $0 while the outstanding principal balance is less than or equal to $10.0 million. The Liquidity Requirement decreases to $5.0 million while the outstanding principal balance is between $10.0 million and $25.0 million. Failure by the Company to comply with the financial covenants will result in an event of default, subject to certain cure rights of the Company with respect to the Minimum Net Sales Test.

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The New Oaktree Agreement, as amended, contains events of default that are customary for financings of this type, in certain circumstances subject to customary cure periods. In addition, the Company is also required to (i) raise cash proceeds from the sale of common stock, or receive monetizations or distributions, by the end of each calendar year prior to the maturity date, in an aggregate amount equal to the greater of $20 million or 50% of an amount set forth in an annual budget delivered to the lenders (the “Capital Raise Test”) and (ii) maintain a specified minimum equity stake in Journey (“the “Minimum JMC Stake Covenant”). These capital raise and minimum stake covenants and financial covenants, will not apply if the outstanding principal balance of the loan is less than or equal to $10 million. Following an event of default and any cure period, if applicable, Oaktree will have the right upon notice to accelerate all amounts outstanding under the New Oaktree Agreement, in addition to other remedies available to the lenders as secured creditors of the Company.

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Pursuant to the terms of the Second Oaktree Amendment, certain financial covenants were amended such that in the event that the outstanding principal balance under the 2024 Oaktree Note is less than or equal to $15.0 million and the Company receives the distribution of proceeds from Cyprium following the closing of the sale of the PRV by Cyprium pursuant to the PRV APA (the “2026 Cyprium Monetization Event”), the Liquidity Requirement will be $2.0 million, and the Minimum Net Sales Test, Capital Raise Test, and Minimum JMC Stake Covenant will no longer apply.

Under the New Oaktree Agreement, as amended, the Company granted a security interest in favor of Oaktree, for the benefit of the lenders, in substantially all of the Company’s assets, subject to customary exceptions, as collateral securing the Company’s obligations under the New Oaktree Agreement.

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In connection with the 2024 Oaktree Agreement, as amended, the Company granted equity classified warrants to the lenders to purchase up to 506,390 shares of the Company’s common stock at a purchase price of $2.0735 per share (the “Warrants”), later reduced to $1.65 per share. The Warrants contain customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offerings and pro rata distributions. The exercise price of the Warrants will also be adjusted if, while the Warrants are outstanding, the Company engages in any transaction involving the issuance or sale of shares of Common Stock or equivalent securities at an effective price per share less than the exercise price of the Warrant then in effect (such lower price, the “Base Share Price”). In such case, the exercise price of the Warrants will be reduced to equal the Base Share Price. In connection with the financing consummated by the Company in September 2024, the Warrants had their exercise price reduced to $1.65 per share. The Warrants are exercisable from July 25, 2024 and will expire on July 25, 2031 and may be net exercised for no cash payment at the holder’s election. The Company filed a registration statement to register the resale of the shares of Company’s common stock issuable upon exercise of the Warrants (see Note 13). The fair value of the warrants were estimated using the Black-Scholes model and level 3 inputs, resulting in an estimated fair value of $1.1 million, which is recorded as a discount on the note payable.

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In connection with the Oaktree Amendment Fortress issued equity classified warrants to Oaktree and certain of its affiliates to purchase up to 0.6 million shares of Common Stock at a purchase price of $2.62 per share (the “2025 Warrants”) with similar rights and terms as the Warrants (see Note 13). The fair value of the warrants were estimated using the Black-Scholes model and level 3 inputs, resulting in an estimated fair value of $1.3 million, which is recorded as a discount on the note payable.

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The Company has filed registration statements to register the resale of shares of the Company’s common stock issuable upon exercise of the Warrants and the 2025 Warrants. In the year ended December 31, 2025, Oaktree elected a cashless exercise of 253,195 warrants, and as a result the Company issued 140,830 common shares to Oaktree.

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The Company was in compliance with all applicable financial covenants under the New Oaktree Agreement, as amended, as of December 31, 2025.

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2020 Oaktree Note

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On July 25, 2024, the Company’s $50.0 million outstanding balance of the senior secured credit agreement with Oaktree (the “Prior Oaktree Agreement”) and the debt thereunder, (the “2020 Oaktree Note”) was terminated upon receipt by Oaktree of a payoff amount of $51.4 million from the Company comprised of principal, interest and the applicable final payment amount. The payoff of the 2020 Oaktree Note was treated as a debt extinguishment, as the 2024 Oaktree Note originated from a fund group different from the Prior Oaktree Agreement. The Company recorded a loss on extinguishment of debt of approximately $3.6 million, representing unamortized debt issuance costs and inclusive of a $1.0 million prepayment fee; the loss on extinguishment was recorded to interest expense in the Consolidated Statement of Operations for the year ended December 31, 2024.

SWK Term Loan

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On December 27, 2023 (the “SWK Closing Date”), Journey entered into the credit agreement (the “SWK Credit Agreement”) with SWK Funding LLC (“SWK”). The SWK Credit Agreement provides for a term loan facility (the “SWK Credit Facility”) in the original principal amount of up to $20.0 million. On the SWK Closing Date, Journey drew $15.0 million. On June 26, 2024, Journey drew the remaining $5.0 million under the SWK Credit Facility. On July 9, 2024, Journey entered into an amendment to the SWK Credit Agreement with SWK, which increased the original principal amount of the SWK Credit Facility from $20.0 million to $25.0 million. The $5.0 million of additional principal added in the amendment was contractually required to be drawn upon FDA approval of Emrosi, subject to Journey receiving approval on or before June 30, 2025. Journey drew on the remaining $5.0 million relating to the FDA approval of Emrosi on November 25, 2024.

Pursuant to the terms under the SWK Credit Facility, as amended, repayments of principal were to commence in February 2026 in an amount equal to $1.9 million per quarter, or 7.5%, of the principal amount of funded Term Loans, with any remaining principal balance due on the maturity date. Term loans under the SWK Credit facility accrue interest, which is payable quarterly in arrears, and bear interest at a rate per annum equal to the three-month term SOFR (subject to SOFR floor of 5%) plus 7.75%. The interest rate resets quarterly.

On September 25, 2025, Journey entered into the Third Amendment to the SWK Credit Agreement (the “Third Amendment”). The Third Amendment, among other things, extends the maturity date of Journey’s existing SWK Credit Facility from December 27, 2027 to June 27, 2028. The Third Amendment also modifies the Revenue-Based Payment provision, as defined in the SWK Credit Agreement, by lowering the applicable revenue threshold, measured based on the twelve months ended December 31, 2025, from $70.0 million to $60.0 million. Journey satisfied the $60.0 million Revenue-Based Payment provision as of December 31, 2025. Accordingly, the interest-only period under the SWK Credit Facility was extended by one year, with scheduled principal repayments commencing in February 2027 rather than February 2026. Thereafter, Journey will be required to make quarterly principal payments equal to $2.5 million per quarter, or 10.0%, of the outstanding principal amount of the funded SWK Credit Facility, with any remaining principal balance due on the maturity date.

Journey may at any time prepay the outstanding principal balance of the Term Loans in whole or in part. Upon repayment in full of the Term Loans, Journey will pay an exit fee equal to 5% of the original principal amount of the Term Loans. Additionally, Journey paid an origination fee of $0.2 million on the SWK Closing Date and incurred issuance costs of $0.2 million, both of which have been recorded as a debt discount. Journey is accreting the carrying value of the SWK Term Loan to the original principal balance plus the exit fee over the term of the loan using the effective interest method. The amortization of the discount is accounted for as interest expense in the Consolidated Statement of Operations. The effective interest rate on the SWK Term Loan as of December 31, 2025 was 14.1%.

The SWK Credit Agreement also includes both revenue and liquidity covenants, restrictions as to payment of dividends, and is secured by substantially all assets of Journey. As of December 31, 2025, Journey was in compliance with the financial covenants under the SWK Credit Agreement.

IDB Letters of Credit

The Company has letters of credit (“LOC”) with one of its commercial banks, IDB Bank (“IDB”), of approximately $1.2 million and $1.6 million as of December 31, 2025 and 2024, respectively, securing rent deposits for lease facilities and an undertaking posted by Cyprium relating to an injunctive proceeding. The Company’s LOC’s are secured by cash, which is included in restricted cash on the Company’s Consolidated Balance Sheet. Interest paid on the letters of credit is 2% per annum.

Urica 8% Cumulative Convertible Class B Preferred Offering

Urica had previously closed private offerings of its 8% Cumulative Convertible Class B Preferred Stock (the “Urica Preferred Stock”), at a price of $25.00 per share (“Subscription Price”) pursuant to which it sold a total of 135,494 shares of Preferred Stock for net proceeds of $2.9 million. A non-cash contingent warrant value of $0.1 million had also been recorded in debt discount.

Dividends on the Urica Preferred Stock were payable monthly by Fortress in shares of Fortress Common Stock based upon a 7.5% discount to the average trading price over the 10-day period preceding the dividend payment date. Dividends were recorded as interest expense. For the year ended December 31, 2024, the Company recorded expense of $0.1 million associated with the Urica dividends paid on the outstanding Urica Preferred Stock. On June 27, 2024, as neither a qualified financing nor a sale of Urica had occurred, Fortress elected to exchange the outstanding shares of Urica Preferred Stock, which had been recorded as a liability, into 2,028,345 shares of Fortress common stock.

Ximino Settlement

In August 2024, Journey executed a settlement agreement (the “Settlement Agreement”) to settle the $3.0 million of license installment payments Journey owed to Sun Pharmaceutical Industries, Inc. (“Sun”) associated with the Ximino asset purchase agreement. Pursuant to the Settlement Agreement, Journey agreed to settle the total outstanding obligation owed to Sun for a total of $1.9 million, payable in three installments: 1) $0.6 million upon execution of the Settlement Agreement, 2) $0.6 million on December 1, 2024, and 3) $0.6 million on January 15, 2025. Journey accounted for the settlement of the license installment payment as a $1.1 million gain on extinguishment of debt in the Consolidated Statements of Operations for the year ended December 31, 2024.

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Interest Expense

The following table shows the details of interest expense for all debt arrangements during the periods presented. Interest expense includes contractual interest and amortization of the debt discount and amortization of fees represents fees associated with loan transaction costs, amortized over the life of the loan:

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Note 2:Relates to Urica’s optional repurchase obligation to Crystalys (see Note 3).