Emmaus Life Sciences, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2024

Notes payable consisted of the following at December 31, 2024 and 2023 (in thousands except for conversion price and underlying shares) excluding the revolving line of credit agreement with related party discussed below:


Year Issued	Interest Rate Range	Term of Notes	Conversion Price			Principal Outstanding December 31, 2024		Unamortized Discount December 31, 2024		Capitalized Accrued Interest December 31, 2024		Carrying Amount December 31, 2024		Shares Underlying Notes December 31, 2024
Notes payable
2013	10%	Due on demand		—		$	638	$	—	$	—	$	638		—
2022	10% - 12%	Due on demand		—			505		—		—		505		—
2023	10% - 13%	Due on demand		—			3,200		—		—		3,200		—
2024	30%-48%	Due on demand -34 weeks		—			2,854		104		—		2,750		—
						$	7,197	$	104	$	—	$	7,093		—
		Current				$	7,197	$	104	$	—	$	7,093		—
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		—			4,316		75		—		4,241		—
2023	10%-60%	Due on demand		—			577		—		—		577		—
						$	5,693	$	75	$	—	$	5,618		—
		Current				$	3,372	$	—	$	—	$	3,372		—
		Non-current				$	2,321	$	75	$	—	$	2,246		—
Convertible notes payable
2021	2%	Due on Demand	$	0.13			895		—		—		895		39,455,164
2023	13%	Due on Demand	$	10.00	(a)		3,150		—		—		3,150		378,388
2023	10%	Due on Demand	$	0.29			1,000		—		—		1,000		3,905,526
2024	10%	1 year	$	0.13			11,030		—		939		11,969		132,861,455
						$	16,075	$	—	$	939	$	17,014		176,600,533
		Current				$	16,075	$	—	$	939	$	17,014		176,600,533
		Grand Total				$	28,965	$	179	$	939	$	29,725		176,600,533


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		Shares Underlying Notes 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
		Grand 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.

Schedule of future contractual principal payments of notes payable

As of December 31, 2024, future contractual principal payments due on notes payable were as follows (in thousands):


Year Ending
2025	$	26,644
2026		—
2027		2,321
Total	$	28,965

Schedule of fair value of conversion feature liabilities

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 values as of December 31, 2024 and December 31, 2023 were based upon following assumptions:


	December 31, 2024			December 31, 2023
Principal outstanding (South Korean won)	KRW 20.1 billion			KRW 23.6 billion
Stock price	KRW 5870			KRW 873
Expected life (in years)		5.79			6.79
Selected yield		9.50	%		12.25	%
Expected volatility (Telcon common stock)		62.90	%		71.90	%
Risk-free interest rate (South Korea government bond)		2.78	%		3.16	%
Expected dividend yield		0.00	%		0.00	%
Conversion price	KRW5,850(US$3.96)			KRW705(US$0.54)

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


Conversion feature liability	December 31, 2024			December 31, 2023
Balance, beginning of year	$	451		$	3,248
Change in fair value included in the statement of operations		(289	)		(2,797	)
Balance, end of year	$	162		$	451

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

Schedule of Fair Value Based upon Assumptions

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


Convertible promissory notes	December 31, 2024			December 31, 2023
Stock price	$	0.01		$	0.10
Conversion price	$	0.03		$	0.13
Select yield		22.70	%		27.23	%
Expected volatility		50	%		50	%
Time until maturity (in years)		0.14			0.16
Dividend yield	—			—
Risk-free rate		4.42	%		5.51	%