Emmaus Life Sciences, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2024

Notes payable consisted of the following at June 30, 2024 and December 31, 2023 (in thousands except for number of underlying shares):


Year Issued	Interest Rate Range	Term of Notes	Conversion Price			Principal Outstanding June 30, 2024		Unamortized Discount June 30, 2024		Carrying Amount June 30, 2024		Underlying Shares June 30, 2024
Notes payable
2013	10%	Due on demand		—		$	621	$	—	$	621		—
2022	10%-12%	Due on demand		—			1,249		—		1,249		—
2023	11%-40%	Due on demand - 32 weeks		—			3,833		11		3,822		—
2024	30%	2 month		—			2,245		58		2,187		—
						$	7,948	$	69	$	7,879		—
		Current				$	7,948	$	69	$	7,879		—
Notes payable - related parties
2020	12%	Due on demand		—			100		—		100		—
2021	12%	Due on demand		—			700		—		700		—
2022	10%-12%	Due on demand - 5 years		—			3,716		85		3,631		—
2023	10%-60%	Due on demand - 2 month		—			577		—		577
						$	5,093	$	85	$	5,008		—
		Current				$	2,772	$	—	$	2,772		—
		Non-current				$	2,321	$	85	$	2,236		—
Convertible notes payable
2021	10%	Due on demand	$	0.13	(b)		1,120				1,120		10,444,856
2023	12%	6 months	$	10.00	(a)		3,150		—		3,150		357,745
2023	10%	1 year	$	0.29			1,000		1		999		3,731,695
2024	10%	1 year	$	0.13			11,060		—		11,060		88,778,279
						$	16,330	$	1	$	16,329		103,312,575
		Current				$	16,330	$	1	$	16,329		103,312,575
		Total				$	29,371	$	154	$	29,217		103,312,575


Year Issued	Interest Rate Range	Term of Notes	Conversion Price			Principal Outstanding December 31, 2023		Unamortized Discount December 31, 2023		Carrying Amount December 31, 2023		Underlying Shares December 31, 2023
Notes payable
2013	10%	Due on demand		—		$	709	$	—	$	709		—
2022	10% - 12%	Due on demand		—			1,284		—		1,284		—
2023	10% - 57%	Due on demand - 56 months		—			6,337		115	$	6,222		—
						$	8,330	$	115	$	8,215		—
		Current				$	8,330	$	115	$	8,215		—
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		—			3,716		95		3,621		—
2023	10%-60%	Due on demand - 2 months		—			927		—		927
						$	5,443	$	95	$	5,348		—
		Current				$	3,122	$	—	$	3,122		—
		Non-current				$	2,321	$	95	$	2,226		—
Convertible notes payable
2021	2%	3 years	$	0.13			12,640		407		12,233		113,009,154
2023	13%	Due on demand	$	10.00	(a)		3,150		—		3,150		337,326
2023	10%	1 year	$	0.29			1,000		—		1,000		3,559,754
						$	16,790	$	407	$	16,383	$	116,906,234
		Current				$	16,790	$	407	$	16,383	$	116,906,234
		Total				$	30,563	$	617	$	29,946	$	116,906,234

(a)

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

(b)

The stated interest for the notes was 2%. As the loan is default as of March 31, 2024, the default interest rate is applicable.

Schedule of future contractual principal payments of notes payable

As of June 30, 2024, future contractual principal payments due on notes payable were as follows (in thousands):


Year Ending
2024 (six months)	$	27,050
2025		—
2026		—
2027		2,321
Total	$	29,371

Schedule of fair value of conversion feature liabilities

The following table presents the assumptions used on the recent dates on which options were granted by the Company. The risk‑free interest rate is based on the implied yield available on U.S. Treasury issues with a term approximating the expected life of the options depending on the date of the grant and expected life of the respective options.


	January 2024		January 2023
Stock Price	$	0.11	$	0.31
Exercise Price	$	0.15	$	4.50
Expected term	5-5.75 years		5-6 years
Risk-Free Rate	3.80-3.81%		3.51-3.53%
Dividend Yield	—		—
Volatility	127.39-136.00%		108.16-116.40%

Schedule of Fair Value Based upon Assumptions

The fair value as of June 30, 2023 and December 31, 2023 was based upon following assumptions:


	June 30, 2024			December 31, 2023
Principal outstanding (South Korean won)	KRW 20.1 billion			KRW 23.6 billion
Stock price	KRW727			KRW 873
Expected life (in years)		6.29			6.79
Selected yield		14.50	%		12.25	%
Expected volatility (Telcon common stock)		65.60	%		71.90	%
Risk-free interest rate (South Korea government bond)		3.22	%		3.16	%
Expected dividend yield		—			—
Conversion price	KRW705(US$0.51)			KRW705(US$0.54)

Conversion Feature Liabilities [Member] | Convertible Promissory Notes [Member]

Schedule of Fair Value Based upon Assumptions

The fair value as of June 30, 2024 and December 31, 2023 was based upon following assumptions:


Convertible promissory notes	June 30, 2024			December 31, 2023
Stock price	$	0.10		$	0.10
Conversion price	$	0.09		$	0.13
Selected yield		29.83	%		27.23	%
Expected volatility		50	%		50	%
Time until maturity (in years)		0.65			0.16
Dividend yield	—			—
Risk-free rate		5.26	%		5.51	%

Conversion Feature Liabilities [Member] | Smart Start Convertible Note [Member]

Schedule of Fair Value Based upon Assumptions

The following table presents the assumptions used to value the conversion features:


Smart Start Convertible Note	June 30, 2024			March 5, 2024
Stock price	$	0.10		$	0.10
Conversion price	$	0.29		$	0.29
Selected yield		30.78	%		25.75	%
Expected volatility		50	%		50	%
Time until maturity (in years)		0.18			0.50
Dividend yield	—			—
Risk-free rate		5.48	%		5.35	%

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 June 30, 2024 and December 31, 2023 (in thousands):


Convertible promissory notes	June 30, 2024		December 31, 2023
Balance, beginning of period	$	451	$	3,248
Change in fair value included in the statement of operations		2,348		(2,797	)
Balance, end of period	$	2,799	$	451