DEBT

3 Months Ended

Mar. 31, 2026

As of March 31, 2026 and December 31, 2025, long-term debt, net, consisted entirely of the carrying value of the Company’s 6.5% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”) of $39.2 million and $39.1 million, respectively.

6.5% Convertible Senior Notes due 2027

On August 22, 2022, Assertio entered into a purchase agreement (the “Purchase Agreement”), with U.S. Bank Trust Company as the trustee of the initial purchasers (the “Initial Purchasers”) to issue $60.0 million in aggregate principal amount of the 2027 Convertible Notes. Under the Purchase Agreement, the Initial Purchasers were also granted an overallotment option to purchase up to an additional $10.0 million aggregate principal amount of the 2027 Convertible Notes solely to cover overallotment (the “Overallotment Option”) within a 13-day period from the date the initial 2027 Convertible Notes were issued. On August 24, 2022, the Initial Purchasers exercised the Overallotment Option in full for the $10.0 million aggregate principal amount of additional 2027 Convertible Notes. The 2027 Convertible Notes are senior unsecured obligations of the Company.

On February 27, 2023, the Company completed a privately negotiated exchange of $30.0 million principal amount of the 2027 Convertible Notes.

The terms of the 2027 Convertible Notes are governed by an indenture dated August 25, 2022 (the “2027 Convertible Note Indenture”). The terms of the 2027 Convertible Notes allow for conversion into the Company’s common stock, cash, or a combination of cash and common stock, at the Company’s election only, at an initial conversion rate of 16.28002 shares of the Company’s common stock per $1,000 principal amount (equal to an initial conversion price of approximately $61.42 per share), subject to adjustments specified in the 2027 Convertible Note Indenture. The 2027 Convertible Notes will mature on September 1, 2027, unless earlier repurchased or converted. The Company may redeem the 2027 Convertible Notes for cash equal to the principal amount, plus accrued and unpaid interest, if the closing price of the Company’s common stock has been at least 130% of the conversion price noted above then in effect for at least 20 trading days during any 30 consecutive trading day period.

Pursuant to the terms of the 2027 Convertible Note Indenture, the Company and its restricted subsidiaries must comply with certain covenants, including mergers, consolidations, and divestitures; guarantees of debt by subsidiaries; issuance of preferred and/or disqualified stock; and liens on the Company’s properties or assets. The Company was in compliance with its covenants with respect to the 2027 Convertible Notes as of March 31, 2026.

The 2027 Convertible Notes bear interest at a rate of 6.5% per annum payable semiannually in arrears on March 1 and September 1 of each year.

The following table reflects the carrying value of the 2027 Convertible Notes as of March 31, 2026 and December 31, 2025 (in thousands):


	March 31, 2026		December 31, 2025
Principal balance	$	40,000	$	40,000
Derivative liability for embedded conversion feature	4		4
Unamortized debt issuance costs	(755)		(880)
Carrying value	$	39,249	$	39,124

The debt issuance costs incurred related to the 2027 Convertible Notes are recognized as a debt discount and are being amortized as interest expense over the term of the 2027 Convertible Notes using the effective interest method with an effective interest rate determined to be 7.8%. During both of the three months ended March 31, 2026 and 2025, the Company amortized $0.1 million of the debt discount on the 2027 Convertible Notes.

The Company determined that an embedded conversion feature included in the 2027 Convertible Notes required bifurcation from the host contract and to be recognized as a separate derivative liability carried at fair value. See Note 10. Fair Value, for further discussion of the estimated fair value of the derivative liability. All the other embedded features of the 2027 Convertible Notes were clearly and closely related to the debt host and did not require bifurcation as a derivative liability, or the fair value of the bifurcated features was immaterial to the Company’s consolidated financial statements.

As discussed at Note 14. Subsequent Events, after the signing of the Merger Agreement and substantially concurrent with the Offer, the Company or the Surviving Corporation, as applicable, will use commercially reasonable efforts to make an offer and consent solicitation to purchase the 2027 Convertible Notes at a purchase price approved by the Purchaser and Parent, contingent upon the Merger (which represents a “Fundamental Change,” as that term is defined in the 2027 Convertible Note Indenture). Refer to Note 14. Subsequent Events, for further details.

Interest Expense

The following table reflects debt-related interest included in Interest expense in the Company’s Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2026 and 2025 (in thousands):


	Three Months Ended March 31,
	2026		2025
Interest on 2027 Convertible Notes	$	650	$	650
Amortization of debt issuance costs on 2027 Convertible Notes	125		115
Total interest expense	$	775	$	765

Assertio Holdings, Inc. 10-Q