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)

9 Months Ended

Sep. 30, 2024

Notes payable consisted of the following at September 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 September 30, 2024		Unamortized Discount September 30, 2024		Carrying Amount September 30, 2024		Underlying Shares September 30, 2024
Notes payable
2013	10%	Due on demand		—		$	702	$	—	$	702		—
2022	10%-12%	Due on demand		—			1,231		—		1,231		—
2023	11%-40%	Due on demand - 56 weeks		—			3,495		1		3,494		—
2024	30%-48%	2 month - 33 weeks		—			2,572		84		2,488		—
						$	8,000	$	85	$	7,915		—
						$	8,000	$	85	$	7,915		—
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		80		3,636		—
2023	10%-60%	Due on demand - 2 month		—			577		—		577		—
						$	5,093	$	80	$	5,013		—
		Current				$	2,772	$	—	$	2,772		—
		Non-current				$	2,321	$	80	$	2,241		—
Convertible notes payable
2021	10%	Due on demand	$	0.13	(b)		995		—		995		9,691,358
2023	13%	6 months	$	10.00	(a)		3,150		—		3,150		368,066
2023	10%	1 year	$	0.29			1,000		—		1,000		3,818,611
2024	10%	1 year	$	0.13			11,060		—		11,060		90,708,390
						$	16,205	$	—	$	16,205		104,586,425
		Current				$	16,205	$	—	$	16,205		104,586,425
		Total				$	29,298	$	165	$	29,133		104,586,425


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 of 10% became applicable.

Schedule of future contractual principal payments of notes payable

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


Year Ending
2024 (three months)	$	15,375
2025		11,602
2026		—
2027		2,321
Total	$	29,298

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 September 30, 2024 and December 31, 2023 was based upon following assumptions:


	September 30, 2024			December 31, 2023
Principal outstanding (South Korean won)	KRW 20.1 billion			KRW 23.6 billion
Stock price	KRW 592			KRW 873
Expected life (in years)		6.04			6.79
Selected yield		11.50	%		12.25	%
Expected volatility (Telcon common stock)		63.20	%		71.90	%
Risk-free interest rate (South Korea government bond)		2.91	%		3.16	%
Expected dividend yield		—			—
Conversion price	KRW598(US$0.46)			KRW705(US$0.54)

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

Schedule of Fair Value Based upon Assumptions

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


Convertible promissory notes	September 30, 2024			December 31, 2023
Stock price	$	0.03		$	0.10
Conversion price	$	0.09		$	0.13
Selected yield		24.88	%		27.23	%
Expected volatility		50	%		50	%
Time until maturity (in years)		0.39			0.16
Dividend yield	—			—
Risk-free rate		4.53	%		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	March 5, 2024
Stock price	$	0.10
Conversion price	$	0.29
Selected yield		25.75	%
Expected volatility		50	%
Time until maturity (in years)		0.50
Dividend yield	—
Risk-free rate		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 September 30, 2024 and December 31, 2023 (in thousands):


Convertible promissory notes
Balance as of December 31, 2023	$	451
Change in fair value included in the statement of operations		72
Balance as of September 30, 2024	$	523