Company: LGNZZ
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0000886163-25-000063
Chunk: 47

Company: LIGAND PHARMACEUTICALS INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Item 1
Chunk 47
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 least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. Holders may require us to repurchase all or a portion of their Notes for cash at 100% of the principal amount plus accrued and unpaid interest to, but excluding, the purchase date upon the occurrence of a “Fundamental Change” (as defined in the Indenture).We account for the Notes in accordance with ASC 470-20, Debt with Conversion and Other Options. At issuance, we evaluated the terms of the Notes and determined that the embedded conversion feature does not require separate accounting as a derivative. The Notes are recorded as a single liability measured at amortized cost. Interest expense include a portion recognized at the stated coupon rate, and amortization of any debt discount and issuance costs, as discussed below.In connection with the issuance of the Notes, we incurred $14.9 million of debt discount and issuance costs, which primarily consisted of underwriting, legal and other professional fees. These costs are netted with the total debt liability and are amortized to interest expense using the effective interest method over the five-year expected life of the Notes. Annual effective interest rate, including coupon portion was 1.4% as of September 30, 2025. During the three and nine months ended September 30, 2025, we recognized a total of $0.8 million in interest expense which includes $0.4 million in coupon expense and $0.4 million in amortized issuance costs.The Indenture contains customary covenants and events of default, including payment defaults, certain bankruptcy events, and failure to comply with other covenants, subject to applicable grace periods. As of September 30, 2025, there were no events of default or violation of any covenants under the Indenture.The following table summarizes information about the Notes (in thousands).September 30, 2025Principal amount of the Notes outstanding$460,000 Unamortized discount (including unamortized debt issuance cost)(14,507)Total long-term portion of notes payable$445,493 Fair value of convertible senior notes outstanding (Level 2)$519,234 

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Convertible Note Hedge and Warrant TransactionsIn connection with the pricing of the Notes and the initial purchasers’ exercise of their option to purchase additional Notes, in August 2025, we entered into convertible note hedge transactions with