Emmaus Life Sciences, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Selected Financial Statement - Liabilities

Selected Financial Statement - Liabilities

3 Months Ended

Mar. 31, 2025

Selected Financial Statement - Liabilities

NOTE 6 — SELECTED FINANCIAL STATEMENT - LIABILITIES

Accounts payable and accrued expenses consisted of the following at March 31, 2025 and December 31, 2024 (in thousands):


	March 31, 2025		December 31, 2024
Accounts payable:
Clinical and regulatory expenses	$	514	$	452
Professional fees		608		904
Selling expenses		1,516		1,553
Manufacturing costs		695		706
Non-employee director compensation		954		966
Other vendors		520		594
Total accounts payable		4,807		5,175
Accrued interest payable, related parties		1,274		1,145
Accrued interest payable		3,492		2,874
Accrued expenses:
Payroll expenses		466		323
Government rebates and other rebates		7,809		7,229
Due to customers		—		15
Other accrued expenses		465		165
Total accrued expenses		8,740		7,732
Total accounts payable and accrued expenses	$	18,313		16,926

Other current liabilities consisted of the following at March 31, 2025 and December 31, 2024 (in thousands):


	March 31, 2025		December 31, 2024
Trade discount	$	5,100	$	5,000
Unearned revenue (a)		10,000		10,000
Other current liabilities		1,303		1,557
Total other current liabilities	$	16,403	$	16,557

(a) Refer to Note 3 for information regarding to due to Telcon.

Other long-term liabilities consisted of the following at March 31, 2025 and December 31, 2024 (in thousands):



	March 31, 2025		December 31, 2024
Trade discount	$	13,323	$	13,421
Other long-term liabilities		46		44
Total other long-term liabilities	$	13,369	$	13,465

On June 12, 2017, the Company entered into an API Supply Agreement with Telcon pursuant to which Telcon advanced to the Company approximately $31.8 million as an advance trade discount in consideration of the Company’s agreement to purchase from Telcon the Company’s estimated annual target for bulk containers of PGLG. On July 12, 2017, the Company entered into a raw material supply agreement with Telcon which revised certain items of the API Supply Agreement (the “revised API Agreement”). The Company purchased none and $125,000 of PGLG from Telcon for three months ended March 31, 2025 and 2024, respectively, of which $612,000 and $588,000 were reflected in accounts payable as of March 31, 2025 and December 31, 2024, respectively. The revised API Agreement provided for an annual API purchase target of $5 million and a target “profit” (i.e., gross margin) to Telcon of $2.5 million. To the extent these targets are not met, which management refers to as a “target shortfall,” Telcon may be entitled to payment of the target shortfall or to settle the target shortfall by exchange of principal and interest on the Telcon convertible bond and proceeds thereof that are pledged as a collateral to secure the Company’s obligations under the API Supply Agreement and the revised API Agreement. See Note 5 for information regarding the settlement of the target shortfall for 2023 and 2024.