Quarterly report pursuant to Section 13 or 15(d)

NOTES PAYABLE (Tables)

v3.23.1
NOTES PAYABLE (Tables)
3 Months Ended
Mar. 31, 2023
Schedule of notes payable

Notes payable consisted of the following at March 31, 2023 and December 31, 2022 (in thousands except for number of underlying shares):

 

Year
Issued

 

Interest Rate
Range

 

Term of Notes

 

Conversion
Price

 

 

Principal
Outstanding March 31, 2023

 

 

Unamortized Discount March 31, 2023

 

 

Carrying
Amount March 31, 2023

 

 

Underlying Shares March 31, 2023

 

Notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2013

 

10%

 

Due on demand

 

 

 

 

$

750

 

 

$

 

 

$

750

 

 

 

 

 2021

 

11%

 

Due on demand - 2 years

 

 

 

 

 

2,058

 

 

 

 

 

 

2,058

 

 

 

 

 2022

 

10%-28%

 

Due on demand - 15 month

 

 

 

 

 

3,228

 

 

 

69

 

 

 

3,159

 

 

 

 

 2023

 

11%-60%

 

Due on demand - 32 weeks

 

 

 

 

 

2,385

 

 

 

27

 

 

 

2,358

 

 

 

 

 

 

 

 

 

 

 

 

$

8,421

 

 

$

96

 

 

$

8,325

 

 

 

 

 

 

 

Current

 

 

 

 

$

8,421

 

 

$

96

 

 

$

8,325

 

 

 

 

Notes payable - related parties

 

 

 

 

 

 

 

 

 

 

 

 

 

 2020

 

12%

 

Due on demand

 

 

 

 

 

100

 

 

 

 

 

 

100

 

 

 

 

 2021

 

12%

 

Due on demand

 

 

 

 

 

700

 

 

 

 

 

 

700

 

 

 

 

 2022

 

6%-12%

 

Due on demand - 5 years

 

 

 

 

 

4,976

 

 

 

168

 

 

 

4,881

 

(c)

 

 

 2023

 

10%

 

Due on demand

 

 

 

 

 

227

 

 

 

 

 

 

227

 

 

 

 

 

 

 

 

 

 

 

 

$

6,003

 

 

$

168

 

 

$

5,908

 

 

 

 

 

 

 

Current

 

 

 

 

$

2,482

 

 

$

 

 

$

2,482

 

 

 

 

 

 

 

Non-current

 

 

 

 

$

3,521

 

 

$

168

 

 

$

3,426

 

 

 

 

Convertible notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 2020

 

12%

 

3 years

 

$

10.00

 

(a)

 

3,150

 

 

 

 

 

 

3,150

 

 

 

335,605

 

 2021

 

2%

 

3 years

 

$

0.37

 

(b)

 

13,640

 

 

 

2,103

 

 

 

11,537

 

 

 

40,652,575

 

 

 

 

 

 

 

 

 

$

16,790

 

 

$

2,103

 

 

$

14,687

 

 

 

40,988,180

 

 

 

 

Current

 

 

 

 

$

16,790

 

 

$

2,103

 

 

$

14,687

 

 

 

40,988,180

 

Convertible notes payable - related parties

 

 

 

 

 

 

 

 

 

 

 

 

 

 2023

 

10%

 

2 years

 

$

0.50

 

 

 

1,000

 

 

 

 

 

 

1,000

 

 

 

2,040,000

 

 

 

 

 

 

 

 

 

$

1,000

 

 

$

 

 

$

1,000

 

 

 

2,040,000

 

 

 

 

Non-current

 

 

 

 

$

1,000

 

 

$

 

 

$

1,000

 

 

 

2,040,000

 

 

 

 

Total

 

 

 

 

$

32,214

 

 

$

2,367

 

 

$

29,920

 

 

 

43,028,180

 

 

Year
Issued

 

Interest Rate
Range

 

Term of Notes

 

Conversion
Price

 

 

Principal
Outstanding
December 31,
2022

 

 

Unamortized
Discount
December 31,
2022

 

 

Carrying
Amount
December 31,
2022

 

 

Underlying Shares
December 31, 2022

 

Notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2013

 

10%

 

Due on demand

 

 

 

 

$

763

 

 

$

 

 

$

763

 

 

 

 

 2021

 

11%

 

Due on demand - 2 years

 

 

 

 

 

2,843

 

 

 

 

 

 

2,843

 

 

 

 

 2022

 

10% - 28%

 

Due on demand - 15 months

 

 

 

 

 

3,696

 

 

 

108

 

 

$

3,588

 

 

 

 

 

 

 

 

 

 

 

 

$

7,302

 

 

$

108

 

 

$

7,194

 

 

 

 

 

 

 

Current

 

 

 

 

$

6,919

 

 

$

105

 

 

$

6,814

 

 

 

 

 

 

 

Non-current

 

 

 

 

$

383

 

 

$

3

 

 

$

380

 

 

 

 

Notes payable - related parties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2020

 

12%

 

Due on demand

 

 

 

 

 

100

 

 

 

 

 

 

100

 

 

 

 

 2021

 

12%

 

Due on demand

 

 

 

 

 

700

 

 

 

 

 

 

700

 

 

 

 

 2022

 

6%-12%

 

Due on demand - 5 years

 

 

 

 

 

5,026

 

 

 

175

 

 

 

4,913

 

(c)

 

 

 

 

 

 

 

 

 

 

$

5,826

 

 

$

175

 

 

$

5,713

 

 

 

 

 

 

 

Current

 

 

 

 

$

2,305

 

 

$

 

 

$

2,367

 

 

 

 

 

 

 

Non-current

 

 

 

 

$

3,521

 

 

$

175

 

 

$

3,346

 

 

 

 

Convertible notes payable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2020

 

12%

 

3 years

 

$

10.00

 

(a)

 

3,150

 

 

 

 

 

 

3,150

 

 

 

326,655

 

 2021

 

2%

 

3 years

 

$

0.37

 

(b)

 

14,140

 

 

 

2,635

 

 

 

11,505

 

 

 

41,318,094

 

 

 

 

 

 

 

 

 

$

17,290

 

 

$

2,635

 

 

$

14,655

 

 

 

41,644,749

 

 

 

 

Current

 

 

 

 

$

17,290

 

 

$

2,635

 

 

$

14,655

 

 

 

41,644,749

 

 

 

 

Grand Total

 

 

 

 

$

30,418

 

 

$

2,918

 

 

$

27,562

 

 

 

41,644,749

 

 

(a)
This note is convertible into shares of EMI Holding, Inc., a wholly owned subsidiary of Emmaus Life Sciences, Inc.
(b)
The notes are convertible into shares of common stock of Emmaus Life Sciences, Inc. Beginning February 28, 2022, the note holders became entitled to call for redemption of the convertible notes payable at any time. Accordingly, the notes are classified as current liabilities.
(c)
Includes $73,000 and $63,000 of the fair value of embedded derivative as of March 31, 2023 and December 31, 2022, respectively.
Schedule of future contractual principal payments of notes payable

As of March 31, 2023, future contractual principal payments due on notes payable were as follows (in thousands):

 

Year Ending

 

 

 

2023 (nine months)

$

25,930

 

 (a)

2024

 

1,763

 

 

2025

 

2,200

 

 

2027

 

2,321

 

 

Total

$

32,214

 

 

(a)
Includes 13.6 million principal amount of convertible notes subject to redemption at any time at the election of the holders.
Schedule of Fair Value Based upon Assumptions

The fair value as of March 31, 2022 and December 31, 2022 was based upon following assumptions:

 

 

March 31, 2023

 

 

December 31, 2022

 

Principal outstanding (South Korean won)

 

KRW 26.5 billion

 

 

KRW 26.5 billion

 

Stock price

 

KRW1,065

 

 

KRW 1,015

 

Expected life (in years)

 

 

7.55

 

 

 

7.79

 

Selected yield

 

 

14.25

%

 

 

13.50

%

Expected volatility (Telcon common stock)

 

 

80.30

%

 

 

78.50

%

Risk-free interest rate (South Korea government bond)

 

 

3.30

%

 

 

3.74

%

Expected dividend yield

 

 

 

 

 

 

Conversion price

 

KRW1,068(US$0.82)

 

 

KRW1,068(US$0.85)

 

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

The fair value as of March 31, 2023 and December 31, 2022 was based upon following assumptions:

Convertible promissory notes

 

March 31, 2023

 

 

December 31, 2022

 

Stock price

 

$

0.33

 

 

$

0.26

 

Conversion price

 

$

0.37

 

 

$

0.37

 

Selected yield

 

 

29.35

%

 

 

27.50

%

Expected volatility

 

 

50

%

 

 

50

%

Time until maturity (in years)

 

 

0.92

 

 

 

1.16

 

Dividend yield

 

 

 

 

Risk-free rate

 

 

4.69

%

 

 

4.68

%

Level 3 [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 liability as of March 31, 2023 and December 31, 2022 (in thousands):

 

Convertible promissory notes

 

March 31, 2023

 

 

December 31, 2022

 

Balance, beginning of period

 

$

3,248

 

 

$

7,507

 

Change in fair value included in the statement of operations

 

 

(89

)

 

 

(4,259

)

Balance, end of period

 

$

3,159

 

 

$

3,248