Quarterly report pursuant to Section 13 or 15(d)

NOTES PAYABLE (Tables)

v3.21.2
NOTES PAYABLE (Tables)
9 Months Ended
Sep. 30, 2021
Schedule of notes payable

Notes payable consisted of the following at September 30, 2021 and December 31, 2020 (in thousands except for number of shares):

 

Year

Issued

 

Interest Rate

Range

 

 

Term of Notes

 

Conversion

Price

 

 

Principal

Outstanding September 30, 2021

 

 

Unamortized Discount September 30, 2021

 

 

Carrying

Amount September 30, 2021

 

 

Underlying Shares

September 30, 2021

 

 

Notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

10%

 

 

Due on demand

 

 

 

 

$

895

 

 

$

 

 

$

895

 

 

 

 

 

2020

 

1%

 

 

2 years

 

 

 

 

 

798

 

 

 

 

 

 

798

 

 

 

 

 

2021

 

11%

 

 

Due on demand - 2 years

 

 

 

 

 

3,076

 

 

 

 

 

 

3,076

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

4,769

 

 

$

 

 

$

4,769

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

$

3,269

 

 

$

 

 

$

3,269

 

 

 

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

$

1,500

 

 

$

 

 

$

1,500

 

 

 

 

 

Notes payable - related parties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

12%

 

 

Due on demand

 

 

 

 

 

100

 

 

 

 

 

 

100

 

 

 

 

 

2021

 

12%

 

 

Due on demand

 

 

 

 

 

300

 

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

400

 

 

$

 

 

$

400

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

$

400

 

 

$

 

 

$

400

 

 

 

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

$

 

 

$

 

 

$

 

 

 

 

 

Convertible notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

12%

 

 

3 years

 

$

10.00

 

(b)

 

3,150

 

 

 

 

 

 

3,150

 

 

 

316,669

 

 

2021

 

2%

 

 

3 years

 

$

1.48

 

(a)

 

14,490

 

 

 

4,732

 

 

 

9,758

 

 

 

9,806,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

17,640

 

 

$

4,732

 

 

$

12,908

 

 

 

10,122,974

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

$

17,640

 

 

$

4,732

 

 

$

12,908

 

 

 

10,122,974

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

$

22,809

 

 

$

4,732

 

 

$

18,077

 

 

 

10,122,974

 

 

 

 

Year

Issued

 

Interest Rate

Range

 

 

Term of Notes

 

Conversion

Price

 

 

Principal

Outstanding

December 31,

2020

 

 

Unamortized

Discount

December 31,

2020

 

 

Carrying

Amount

December 31,

2020

 

 

Underlying

Shares

Notes

December 31, 2020

 

 

Notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

10%

 

 

Due on demand

 

 

 

 

$

969

 

 

$

 

 

$

969

 

 

 

 

 

2019

 

11%

 

 

Due on demand

 

 

 

 

 

2,899

 

 

 

 

 

 

2,899

 

 

 

 

 

2020

 

1%-11%

 

 

Due on demand - 2 years

 

 

 

 

 

942

 

 

 

 

 

 

942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

4,810

 

 

$

 

 

$

4,810

 

 

$

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

$

4,588

 

 

$

 

 

$

4,588

 

 

 

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

$

222

 

 

$

 

 

$

222

 

 

 

 

 

Notes payable - related parties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

10%

 

 

Due on demand

 

 

 

 

$

20

 

 

$

 

 

$

20

 

 

 

 

 

2019

 

10%

 

 

Due on demand

 

 

 

 

 

14

 

 

 

 

 

 

14

 

 

 

 

 

2020

 

12%

 

 

Due on demand

 

 

 

 

 

100

 

 

 

 

 

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

134

 

 

$

 

 

$

134

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

$

134

 

 

$

 

 

$

134

 

 

 

 

 

Convertible debentures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

10%

 

 

18 months

 

$2.00-$9.52

 

(a)

$

7,200

 

 

$

1,720

 

 

$

5,480

 

 

 

3,630,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

7,200

 

 

$

1,720

 

 

$

5,480

 

 

 

3,630,000

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

$

7,200

 

 

$

1,720

 

 

$

5,480

 

 

 

3,630,000

 

 

Convertible note payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

12%

 

 

3 years

 

$

10.00

 

(b)

$

3,150

 

 

$

 

 

$

3,150

 

 

 

316,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,150

 

 

$

 

 

$

3,150

 

 

 

316,723

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

$

3,150

 

 

$

 

 

$

3,150

 

 

 

316,723

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

$

15,294

 

 

$

1,720

 

 

$

13,574

 

 

 

3,946,723

 

 

 

 

(a)

The notes are convertible into Emmaus Life Sciences, Inc. shares.

 

(b)

The notes are convertible into EMI Holding, Inc. shares.

Schedule of future contractual principal payments of notes payable

As of September 30, 2021, future contractual principal payments due on notes payable were as follows:

 

Year Ending

 

 

 

2021 (three months)

$

3,447

 

2022

 

222

 

2023

 

4,650

 

2024

 

14,490

 

Total

$

22,809

 

 

Schedule of Fair Value Based upon Assumptions

The fair value as of September 30, 2021 and December 31, 2020 was based upon following assumptions:

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Principal outstanding (South Korean won)

 

KRW 30 billion

 

 

KRW 30 billion

 

Stock price

 

KRW 3,990

 

 

KRW 6,060

 

Expected life (in years)

 

 

9.04

 

 

 

9.79

 

Selected yield

 

 

10.50

%

 

 

10.50

%

Expected volatility (Telcon common stock)

 

 

82.15

%

 

 

85.80

%

Risk-free interest rate (South Korea government bond)

 

 

2.18

%

 

 

1.72

%

Expected dividend yield

 

 

 

 

 

 

Conversion price

 

KRW 4,110 (US$3.47)

 

 

KRW 6,028 (US$5.54)

 

Conversion Feature Liabilities [Member] | Level 3 [Member]  
Schedule of fair value of conversion feature liabilities The following table sets forth the fair value of the conversion feature liability as of September 30, 2021 (in thousands)

 

Convertible promissory notes

 

September 30, 2021

 

Balance, beginning of period

 

$

 

Fair value at issuance date

 

 

5,594

 

Change in fair value included in the statement of comprehensive (income) loss

 

 

1,139

 

Balance, end of period

 

$

6,733

 

 

Senior Secured Convertible Debentures [Member]  
Schedule of Fair Value Based upon Assumptions The fair value as of agreement date and the anti-dilution adjustment dates was based upon following assumptions:

 

 

March 2, 2021 (Anti-dilution adjustment date)

 

 

February 28, 2020 (Anti-dilution adjustment date)

 

 

February 21, 2020 (Amendment date)

 

Exercise price

 

$

1.54

 

 

$

2.00

 

 

$

3.00

 

Common stock fair value

 

$

1.52

 

 

$

1.60

 

 

$

1.89

 

Volatility

 

101.00%-120.00%

 

 

 

93.00

%

 

 

92.00

%

Risk-free rate

 

0.21%-0.58%

 

 

 

0.86

%

 

 

1.29

%

Expected life (in years)

 

2.64-4.56

 

 

 

3.54

 

 

 

3.56

 

Senior Secured Convertible Debentures [Member] | Conversion Feature Liabilities [Member]  
Schedule of Fair Value Based upon Assumptions

The fair value as of December 31, 2020 was based upon following assumptions:

 

 

 

December 31, 2020

 

Stock price

 

$

1.23

 

Conversion price

 

$

2.00

 

Selected yield

 

 

10.48

%

Expected volatility (peer group)

 

 

95

%

Expected life (in years)

 

 

0.67

 

Expected dividend yield

 

 

Risk-free rate

 

Term structure

 

Senior Secured Convertible Debentures [Member] | Other Current Liabilities [Member] | Conversion Feature Liabilities [Member]  
Schedule of fair value of conversion feature liabilities The following table sets forth the fair value of the conversion feature liabilities as of September 30, 2021 and December 31, 2020 (in thousands):

 

 

 

Nine Months Ended

 

 

Year Ended

 

Conversion feature liabilities — Amended and Restated 10% Senior Secured Convertible Debentures

 

September 30, 2021

 

 

December 31, 2020

 

Balance, beginning of period

 

$

7

 

 

$

1

 

Fair value at debt modification date

 

 

 

 

 

118

 

Change in fair value included in the statement of comprehensive loss

 

 

(7

)

 

 

(112

)

Balance, end of period

 

$

 

 

$

7

 

 

Convertible Promissory Notes [Member] | Conversion Feature Liabilities [Member]  
Schedule of Fair Value Based upon Assumptions

The fair value as of September 30, 2021 and at issuance date was based upon following assumptions:

Convertible promissory notes

 

September 30, 2021

 

 

Issuance Date

 

Stock price

 

$

1.60

 

 

$

1.41

 

Conversion price

 

$

1.48

 

 

$

1.48

 

Selected yield

 

 

21.62

%

 

 

20.29

%

Expected volatility

 

 

50

%

 

 

50

%

Time until maturity (in years)

 

 

2.41

 

 

 

3.00

 

Dividend yield

 

 

 

 

Risk-free rate

 

 

0.38

%

 

 

0.30

%