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]

Selected Financial Statement Liabilities

Selected Financial Statement Liabilities

12 Months Ended

Dec. 31, 2025

Payables and Accruals [Abstract]

Selected Financial Statement Liabilities

NOTE 6—SELECTED FINANCIAL STATEMENT LIABILITIES

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


	As of December 31,
	2025		2024
Accounts payable:
Clinical and regulatory expenses	$	565	$	452
Professional fees		927		904
Selling expenses		1,721		1,553
Manufacturing costs		1,466		706
Non-employee director compensation		1,018		966
Other vendors		282		594
Total accounts payable		5,979		5,175
Accrued interest payable, related parties		1,474		1,145
Accrued interest payable		5,841		2,874
Accrued expenses:
Payroll expenses		452		323
Government rebates and other rebates		8,538		7,229
Other accrued expenses		331		180
Total accrued expenses		9,321		7,732
Total accounts payable and accrued expenses	$	22,615	$	16,926

Other current liabilities consisted of the following (in thousands):


	As of December 31
	2025		2024
Trade discount	$	3,190	$	5,000
Unearned revenue (a)		13,000		10,000
Other current liabilities		1,375		1,557
Total other current liabilities	$	17,565	$	16,557

(a) Refer Note 3 for information regarding to the unearned revenue.

Other long-term liabilities consisted of the following (in thousands):


	As of December 31
	2025		2024
Trade discount	$	12,239	$	13,421
Other long-term liabilities		53		44
Total other long-term liabilities	$	12,292	$	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”). As of December 31, 2025 and 2024, the total trade discounts were $15.4 million and $18.4 million, respectively. The Company purchased $1.0 million and $0.4 million of PGLG from Telcon during years ended December 31, 2025, and 2024, respectively, of which $1.1 million and $0.6 million were reflected in accounts payable and accrued expenses as of December 31, 2025 and 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 in the years ended December 31, 2025 and 2024 of the target shortfall.