Year

Issued

Interest Rate

Range

Term of Notes

Conversion

Price

Principal

Outstanding June 30, 2022

Unamortized Discount June 30, 2022

Carrying

Amount June 30, 2022

Underlying Shares June 30, 2022

Notes payable

2013

10%

Due on demand

—

$

734

$

—

$

734

—

2021

11%

Due on demand - 2 years

—

2,793

—

2,793

—

2022

11%-41%

Due on demand - 10 month

—

2,985

118

2,867

—

$

6,512

$

118

$

6,394

—

Current

$

6,512

$

118

$

6,394

—

Notes payable - related parties

2020

12%

Due on demand

—

100

—

100

—

2021

12%

Due on demand

—

700

—

700

—

2022

10%-12%

Due on demand

—

2,071

—

2,071

—

$

2,871

$

—

$

2,871

—

Current

$

2,871

$

—

$

2,871

—

Convertible notes payable

2020

12%

3 years

$

10.00

(b)

3,150

—

3,150

323,016

2021

2%

3 years

$

0.37

(a)

14,490

3,578

10,912

40,739,519

$

17,640

$

3,578

$

14,062

41,062,535

Current

$

17,640

$

3,578

$

14,062

41,062,535

Total

$

27,023

$

3,696

$

23,326

41,062,535

Year

Issued

Interest Rate

Range

Term of Notes

Conversion

Price

Principal

Outstanding

December 31,

2021

Unamortized

Discount

December 31,

2021

Carrying

Amount

December 31,

2021

Underlying Shares

December 31, 2021

Notes payable

2013

10%

Due on demand

—

$

869

$

—

$

869

—

2021

11%

Due on demand - 2 years

—

3,030

—

3,030

—

$

3,899

$

—

$

3,899

—

Current

$

2,399

$

—

$

2,399

—

Non-current

$

1,500

$

—

$

1,500

—

Notes payable - related parties

2020

12%

Due on demand

—

$

100

$

—

$

100

—

2021

12%

Due on demand

—

700

—

700

—

$

800

$

—

$

800

—

Current

$

800

$

—

$

800

—

Convertible notes payable

2020

12%

3 years

$

10.00

(b)

3,150

—

3,150

316,756

2021

2%

3 years

$

1.48

(a)

14,490

4,332

10,158

9,856,343

$

17,640

$

4,332

$

13,308

10,173,099

Current

$

14,490

$

4,332

$

10,158

9,856,343

Non-current

$

3,150

$

—

$

3,150

316,756

Total

$

22,339

$

4,332

$

18,007

$

10,173,099

(a)

The notes are convertible into Emmaus Life Sciences, Inc. shares. Beginning February 28, 2022, the note holders became entitled to call for early redemption of the convertible notes payable, because the Company common stock was not approved for listing on a Trading Market (as defined in the agreement). Accordingly, the notes are classified as current liabilities.

(b)

This note is convertible into shares of EMI Holding, Inc., a wholly owned subsidiary of Emmaus Life Sciences, Inc.

June 30, 2022

December 31, 2021

Principal outstanding (South Korean won)

KRW 26.5 billion

KRW 30 billion

Stock price

KRW1,400

KRW2,925

Expected life (in years)

8.30

8.79

Selected yield

14.75

%

10.50

%

Expected volatility (Telcon common stock)

79.50

%

81.31

%

Risk-free interest rate (South Korea government bond)

3.64

%

2.19

%

Expected dividend yield

—

—

Conversion price

KRW1,498 (US$1.16)

KRW2,847 (US$2.39)

Convertible promissory notes

June 30, 2022

December 31, 2021

Stock price

$

0.45

$

1.67

Conversion price

$

0.37

$

1.48

Selected yield

27.60

%

21.99

%

Expected volatility

50

%

50

%

Time until maturity (in years)

1.66

2.16

Dividend yield

—

—

Risk-free rate

2.88

%

0.77

%

Convertible promissory notes

June 30, 2022

December 31, 2021

Balance, beginning of period

$

7,507

$

—

Fair value at issuance date

—

5,594

Change in fair value included in the statement of operations

615

1,913

Balance, end of period

$

8,122

$

7,507