Note 7 - Loan Payable

3 Months Ended

Mar. 31, 2026

NOTE 7 - LOAN PAYABLE

On August 2, 2024 (the Closing Date), the Company entered into a term loan facility of $250 million (the Initial Term Loan) with Blue Owl Capital Corporation, as administrative agent (the Administrative Agent), HealthCare Royalty (HCR) and Blue Owl Capital under the Financing Agreement (as defined below) to repay all outstanding principal and accrued interest and fees under our prior loan agreement with Hercules.

The Initial Term Loan is governed by a financing agreement (the Financing Agreement), which provides for (i) a single draw of the Initial Term Loan, which was funded on August 2, 2024, and (ii) an uncommitted additional facility in an aggregate principal amount of up to $100 million. The Initial Term Loan will mature on August 2, 2029 (the Term Loan Maturity Date). The Initial Term Loan accrues interest at a per annum rate of interest equal to an applicable margin plus, at the Company’s option, either (a) a base rate determined by reference to the highest of (1) the prime rate published by the Wall Street Journal, (2) the federal funds effective rate plus 0.50% and (3) Term SOFR (as defined in the Financing Agreement), plus 1.00%.

On March 18, 2026 (the 2026 Closing Date), the Company entered into a First Amendment to the Financing Agreement (the First Amendment) to repay in full the Initial Term Loan and enter into a new term loan facility of $750 million (the 2026 Term Loan) with Blue Owl Capital. The 2026 Term Loan will mature on March 18, 2031 (the Term Loan Maturity Date). The 2026 Term Loan accrues interest at a per annum rate equal to an applicable margin plus (a) a base rate determined by reference to the highest of (1) the prime rate published by The Wall Street Journal, (2) the federal funds effective rate plus 0.50%, (3) Term SOFR plus 1.00% and (4) 2.00% or (b) Term SOFR, which shall be no less than 1.00%. The applicable margin is determined on a quarterly basis by reference to a pricing grid based on the Total Net Leverage Ratio (as defined in the First Amendment) for the most recently completed four consecutive fiscal quarters. The pricing grid commences at 4.75% for SOFR borrowings and 3.75% for base rate borrowings and is subject to a 25 basis point step-down upon achievement of a specified leverage threshold.

The 2026 Term Loan requires scheduled quarterly amortization payments commencing with the fiscal quarter ending March 31, 2030, in an amount equal to $37.5 million, with the balance due and payable on the Term Loan Maturity Date; provided that such amortization payments may be deferred upon the achievement of a Total Net Leverage Ratio that is less than or equal to an agreed threshold.

The 2026 Term Loan is secured by a lien on substantially all of the assets of the Company and certain subsidiaries of the Company as guarantors and contains customary covenants and representations. As of March 31, 2026, the Company was in compliance with all financial covenants.

The events of default under the Financing Agreement are customary for financings of this type. If an event of default occurs, Blue Owl Capital is entitled to take enforcement action, including acceleration of amounts due under the Financing Agreement. In connection with the 2026 Term Loan, the Company incurred additional third-party fees, which were capitalized as debt issuance costs and are being amortized over the term of the loan.

The Company evaluated the refinancing of the Initial Term Loan in connection with the First Amendment under ASC 470-50, Debt – Modifications and Extinguishments. The Company determined that the First Amendment represents a refinancing transaction resulting in extinguishment accounting for the Initial Term Loan held by Blue Owl Capital and HCR, which was repaid in full, including applicable prepayment premiums and accrued interest. As a result, the Company recorded a loss on extinguishment of debt of approximately $9.2 million in the Company’s statement of operations for the three months ended March 31, 2026, representing the write-off of a portion of unamortized debt issuance costs, unamortized debt discount costs, and the prepayment premiums associated with the extinguished portion.

The Company incurred total financing and upfront costs of $4.9 million related to the 2026 Term Loan, which are recorded as debt issuance costs and debt discount costs and as an offset to loan payable on the Company’s consolidated balance sheet. The debt issuance and debt discount costs are being amortized over the term of the debt using the straight-line method, and will be included in interest expense in the Company’s condensed consolidated statements of operations. Amortization of debt issuance and debt discount costs was $0.3 million for the three months ended March 31, 2026, and $0.3 million for the three months ended March 31, 2025. At March 31, 2026, the remaining unamortized balance of debt issuance and discount costs was approximately $4.9 million.

The loan payable balance of the Initial Term Loan as of March 31, 2026, and December 31, 2025 is as follows:

	The Initial Term Loan
	March 31,			December 31,
(in thousands)	2026			2025
Loan payable	$	250,000		$	250,000
Add: Accreted Liability of final payment fee		—			—
		250,000			250,000
Less: unamortized debt issuance and debt discount costs		—			(4,355	)
		250,000			245,645
Less: principal payments		(250,000	)		—
Total loan payable		—			245,645
Less: current portion		—			—
Loan payable non-current	$	—		$	245,645

The loan payable balance of the 2026 Term Loan as of March 31, 2026, is as follows:

	2026 Term Loan
	March 31,
(in thousands)	2026
Loan payable	$	750,000
Add: Accreted Liability of final payment fee		—
		750,000
Less: unamortized debt issuance and debt discount costs		(4,860	)
		745,140
Less: principal payments		—
Total loan payable		745,140
Less: current portion		—
Loan payable non-current	$	745,140

TG THERAPEUTICS, INC. 10-Q