Fortress Biotech, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Debt

Debt

9 Months Ended

Sep. 30, 2011

Debt

Debt

DEBT

Paramount Credit Partners, LLC ("PCP") Promissory Note (the "PCP Note")

On January 7, 2011, as part of the Asphelia Asset Purchase (see Note 7), the Company assumed a 10% promissory note issued to PCP, an affiliate of Paramount Biosciences, LLC ("PBS"), by Asphelia Pharmaceuticals, Inc. ("Asphelia"), on January 22, 2009 for $750,000, which is classified as long-term debt in the consolidated balance sheets. All unpaid principal and accrued interest outstanding under the PCP Note is payable on the earlier of (i) December 31, 2013, (ii) the consummation of a merger, share exchange or other transaction (or series of related transactions), other than in connection with the consummation of an equity financing (or a series of equity financings) in which the aggregate consideration payable to the Company or its shareholders is greater than or equal to $10 million.

Interest expense consisted of the following:


	For the three months ended				For the nine months ended				Period from June 28, 2006
	September 30,				September 30,				(Date of Inception) to
	2011		2010		2011		2010		September 30, 2011

Interest expense—senior convertible notes	$	—	$	15	$	—	$	251	$	1,031

Interest expense—related parties		19		—		55		15		429

Amortization of embedded conversion feature related to the senior convertible and related party notes		—		—		—		831		831

Change in fair value of Common Stock warrant liability		—		47		—		281		234

Amortization of deferred financing fees related to the senior convertible notes		—		—		—		157		737


Total interest expense	$	19	$	62	$	55	$	1,535	$	3,262