Journey Medical Corp

Previous wording

We are a commercial-stage pharmaceutical company founded in October 2014 that primarily focuses on the selling and marketing of U.S. Food and Drug Administration (“FDA”) approved branded prescription pharmaceutical products for the treatment of dermatological conditions. Our current portfolio includes eight FDA-approved prescription drugs for dermatological conditions that are marketed in the U.S. and a majority of our revenues derive from our branded, patent protected products. We are managed by experienced life science executives with a track record of creating value for their stakeholders and bringing novel medicines to the market, enabling patients to experience increased quality of life and physicians and other licensed medical professionals to provide better care for their patients. We acquire rights to products and product candidates by licensing or otherwise acquiring an ownership interest in, funding the research and development of, and eventually commercializing the products through our field sales organization. We are a controlled subsidiary of Fortress Biotech, Inc. (“Fortress” or “Parent”).

Current wording

We are a commercial-stage pharmaceutical company founded in October 2014 that primarily focuses on the selling and marketing of U.S. Food and Drug Administration (“FDA”) approved prescription pharmaceutical products for the treatment of dermatological conditions. Our current portfolio includes eight FDA-approved prescription drugs for dermatological conditions that are marketed in the U.S. and a majority of our revenues derive from our branded, patent protected products. We are managed by experienced life science executives with a track record of creating value for their stakeholders and bringing novel medicines to the market, enabling patients to experience increased quality of life and physicians and other licensed medical professionals to provide better care for their patients. We acquire rights to products and product candidates by licensing or otherwise acquiring an ownership interest in, funding the research and development of, and eventually commercializing the products through our field sales organization. We are a controlled subsidiary of Fortress Biotech, Inc. (“Fortress” or “Parent”).

Previous wording

Critical Accounting Polices and Uses of Estimates

Current wording

Critical Accounting Policies and Uses of Estimates

Previous wording

For a discussion of our critical accounting estimates, see the section of the 2024 Form 10-K titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Use of Estimates.” There were no material changes in our critical accounting estimates or accounting policies from December 31, 2024.

Current wording

For a discussion of our critical accounting estimates, see the section of the 2025 Form 10-K titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Use of Estimates.” There were no material changes to our critical accounting estimates or accounting policies from December 31, 2025.

Previous wording

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include presentation of only two years of audited financial statements in our annual reports on Form 10-K, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation and less extensive disclosure about our executive compensation arrangements. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

Current wording

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include presentation of only two years of audited financial statements in our annual reports on Form 10-K, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation and less extensive disclosure about our executive compensation arrangements. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. The Company expects to cease qualifying as an emerging growth company as of the end of its fiscal year ending December 31, 2026.

Previous wording

Other revenue for the three-month period ended September 30, 2025 reflects the supply of Amzeeq sold to Cutia pursuant to the Cutia Agreement. In August 2025, we began supplying Cutia with finished licensed products for Cutia’s commercial use.

Current wording

Other revenue for the three-month period ended March 31, 2026 reflects sales-based royalties on Cutia’s net sales of Amzeeq, pursuant to the Cutia Agreement. In August 2025, we began supplying Cutia with finished licensed products for Cutia’s commercial use.

Previous wording

Gross-to-net sales accruals are primarily a function of product sales volume, mix of products sold, and contractual discounts or rebates. Our reserves for gross-to-net sales allowances were $12.2 million at September 30, 2025, compared to $9.8 million at September 30, 2024, an increase of $2.4 million. The increase is due to the incremental allowances recorded related to the launch and commercialization of Emrosi, due substantially to the Emrosi coupon rebate allowance.

Current wording

Gross-to-net sales accruals are primarily a function of product sales volume, mix of products sold, and contractual discounts or rebates. Our reserves for gross-to-net sales allowances were $17.3 million at March 31, 2026, compared to $18.7 million at December 31, 2025, a decrease of $1.4 million. The decrease is due primarily to the timing of sales throughout the first quarter of 2026 as well as coverage mix.

Previous wording

At September 30, 2025, we had $24.9 million in cash and cash equivalents as compared to $20.3 million of cash and cash equivalents at December 31, 2024. At September 30, 2025 we had working capital of $16.7 million as compared to $13.0 million at December 31, 2024.

Current wording

At March 31, 2026, we had cash and cash equivalents on hand of approximately $27.2 million as compared to $24.1 million of cash and cash equivalents at December 31, 2025, and working capital of $27.1 million at March 31, 2026, compared to $29.4 million at December 31, 2025.

Previous wording

We rely primarily on cash on hand generated from sales of our pharmaceutical products to customers to fund our core operations. In addition, we have relied on the proceeds from our term loan Credit Facility with SWK Funding LLC (“SWK”), and our at-the-market sales program to meet additional capital and liquidity needs, specifically to fund the research and development and commercialization of Emrosi.

Current wording

We rely primarily on cash on hand generated from sales of our pharmaceutical products to customers to fund our core operations. In addition, we have relied on the proceeds from our term loan Credit Facility with SWK, and our at-the-market sales program to meet additional capital and liquidity needs.

Previous wording

On December 27, 2023, we entered into a Credit Agreement (the “Credit Agreement”) with SWK Funding LLC (“SWK”). The Credit Agreement originally provided for a term loan facility (the “Credit Facility”) in the original principal amount of up to $20.0 million. On the closing date, we drew $15.0 million. On June 26, 2024, we drew the remaining $5.0 million under the Credit Facility. Loans under the Credit Facility (the “Term Loans”) bear interest at a rate per annum equal to the three-month term Secured Overnight Financing Rate (“SOFR”) (subject to a SOFR floor of 5%) plus 7.75%. The interest rate resets quarterly. Interest payments began in February 2024 and are paid quarterly.

Current wording

On December 27, 2023, we entered into the Credit Agreement with SWK. The Credit Agreement originally provided for a term loan facility (the “Credit Facility”) in the original principal amount of up to $20.0 million. On the closing date, we drew $15.0 million. On June 26, 2024, we drew the remaining $5.0 million under the Credit Facility. Loans under the Credit Facility (the “Term Loans”) bear interest at a rate per annum equal to the three-month term Secured Overnight Financing Rate (“SOFR”) (subject to a SOFR floor of 5%) plus 7.75%. The interest rate resets quarterly. Interest payments began in February 2024 and are paid quarterly.

Previous wording

On September 25, 2025, we entered into the Third Amendment. The Third Amendment, among other things, extends the maturity date of our existing Credit Facility from December 27, 2027 to June 27, 2028. The Third Amendment also modifies the Revenue-Based Payment provision, as defined in the Credit Agreement, by lowering the applicable revenue threshold, measured on a trailing twelve-month basis, from $70.0 million to $60.0 million. Upon satisfaction of the revised revenue threshold, the interest-only period under the Credit Facility will be extended by one year, with scheduled principal repayments commencing in February 2027 rather than February 2026. Thereafter, we 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 Term Loan, with any remaining principal balance due on the maturity date, as compared to the prior schedule of approximately $3.8 million per quarter, or 15.0% of the outstanding principal amount of the funded Term Loan, with any remaining principal balance due on the maturity date.

Current wording

On September 25, 2025, we entered into a Third Amendment to the Credit Agreement (the “Third Amendment”). The Third Amendment, among other things, extends the maturity date of the facility from December 27, 2027 to June 27, 2028. The Third Amendment also modifies the Revenue-Based Payment provision, as defined in the Credit Agreement, by lowering the applicable revenue threshold, measured on a trailing twelve-month basis, from $70.0 million to $60.0 million. Upon satisfaction of the revised revenue threshold, the interest-only period under the Credit Facility will be extended by one year, with scheduled principal repayments commencing in February 2027 rather than February 2026. We satisfied the $60.0 million revenue threshold as of December 31, 2025. Accordingly, principal payments under the Credit Facility will begin in February 2027.

Previous wording

The Credit Facility also includes both revenue and liquidity covenants, restrictions as to payment of dividends, and is secured by substantially all of our assets. As of September 30, 2025, we were in compliance with the financial covenants under the Credit Facility.

Current wording

The Credit Agreement also includes both revenue and liquidity covenants, restrictions as to payment of dividends, and is secured by substantially all of our assets. As of March 31, 2026, we were in compliance with the financial covenants under the Credit Agreement.

Previous wording

In August 2025, we entered into the New Sales Agreement relating to shares of the Company’s common stock with B. Riley and Lake Street. In accordance with the terms of the New Sales Agreement, we may offer and sell up to 3,750,000 shares of common stock, from time to time through or to the Agents, each acting as sales agent or principal. As of September 30, 2025, we have not issued any shares under the New Sales Agreement.

Current wording

In August 2025, we executed a new At Market Issuance Sales Agreement (the “2025 Sales Agreement”) relating to shares of the Company’s common stock with B. Riley Securities, Inc (“B. Riley”) and Lake Street Capital Markets, LLC (“Lake Street”) (each, an “Agent” and together, the “Agents”), replacing the previous December 30, 2022 At Market Issuance Sales Agreement with B. Riley. In accordance with the terms of the 2025 Sales Agreement, we may offer and sell up to 3,750,000 shares of common stock, from time to time through or to the Agents, each acting as sales agent or principal.

Previous wording

On December 30, 2022, we filed a shelf registration statement on Form S-3 (File No. 333-269079) (the “2022 Shelf”), which was declared effective by the Securities and Exchange Commission on January 26, 2023. This shelf registration statement covers the offering, issuance and sale by us of up to an aggregate of $150.0 million of our common stock, preferred stock, debt securities, warrants, and units. During the nine-months ended September 30, 2025, we issued and sold 1,832,107 shares of common stock under the 2022 Shelf, generating net proceeds of $10.9 million under the Sales Agreement with B. Riley.

Current wording

On January 15, 2026, we filed a shelf registration statement on Form S-3 (File No. 333-292758) (the “2026 Shelf”), which was declared effective by the SEC on January 21, 2026. This shelf registration statement covers the offering, issuance and sale by us of up to an aggregate of $150.0 million of our common stock, preferred stock, debt securities, warrants, and units. The 2026 Shelf replaces the 2022 Shelf. Sales under the 2025 Sales Agreement since the effective date are under the 2026 Shelf.

Previous wording

Cash Flows for the Nine-Month Periods Ended September 30, 2025 and 2024

Current wording

Cash Flows for the Three -Month Periods Ended March 31, 2026 and 2025

Previous wording

Net cash flows used in operating activities for the nine-month period ended September 30, 2025 decreased by $5.2 million, to $6.2 million, from net cash flows used in operating activities of $11.4 million for the nine-month period ended September 30, 2024. The decrease was driven primarily by the decrease in our net loss period-to-period driven by lower Emrosi R&D expenses related to pre-approval project expenses, milestones and fees for the nine-month period ended September 30, 2024, offset by changes in net working capital.

Current wording

Net cash flows provided by operating activities for the three-month period ended March 31, 2026 increased by $5.7 million, to $2.9 million, from net cash flows used in operating activities of $2.8 million for the three-month period ended March 31, 2025. The increase was driven primarily by the decrease in our net loss period-to-period as well as changes in net working capital, primarily related to net collections of accounts receivable.

Previous wording

Net cash flows provided by financing activities for the nine-month period ended September 30, 2025 increased by $4.4 million, to $10.8 million, from $6.4 million of cash flows provided by financing activities for the nine-month period ended September 30, 2024. The Company received proceeds from the issuance of common stock under the ATM program of $10.9 million for the nine-month period ended September 30, 2025, compared to receiving proceeds of $1.7 million and $5.0 million under the ATM program and the SWK credit facility, respectively, for the nine-month period ended September 30, 2024.

Current wording

Net cash flows provided by financing activities for the three-month period ended March 31, 2026 decreased by $3.4 million, to $0.2 million, from $3.6 million of cash flows provided by financing activities for the three-month period ended March 31, 2025. The Company received proceeds from the exercise of stock options and the issuance of common stock under the employee stock purchase of $0.2 million during the three-month period ended March 31, 2026. The Company received proceeds from the issuance of common stock under the ATM program of $4.0 million, offset by a payment of $0.6 million for a license installment note payable during the three-month period ended March 31, 2025.