NOTE 7—NOTES PAYABLE

The weighted-average stated interest rate of notes payable was 15% and 13%, respectively, for the years ended December 31, 2025 and 2024. The weighted-average effective interest rate of notes payable for the years ended December 31, 2025 and 2024 was 18% and 16%, respectively, after giving effect to discounts relating to warrants, conversion features and deferred financing cost in connection with these notes.

On February 9, 2021, the Company entered into a securities purchase agreement in which the Company sold and issued to purchasers in a private placement pursuant to Rule 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D thereunder approximately $14.5 million principal amount of convertible promissory notes of the Company at face value.

Commencing one year from the original issue date, the convertible promissory notes became convertible at the option of the holder into shares of the Company’s common stock at an initial conversion price of $1.48 per share, which equaled the “Average volume-weighted average price” ("Average VWAP") of the Company’s common stock on the effective date. The initial conversion price is subject to adjustment as of the end of each three-month period following the original issue date, commencing May 31, 2021, to equal the Average VWAP as of the end of such three-month period if such Average VWAP is less than the then-conversion price. There is no floor on the conversion price. The conversion price will be subject to further adjustment in the event of a stock split, reverse stock split or certain other events specified in the convertible promissory notes. In April 2024, $260 thousand principal amount plus accrued interest was converted into 2,019,608 shares of the Company's stock. In December 2025, the Company entered into Exchange Agreement with the convertible note holder to

which it agreed to issue 6,322,692 shares of the Company's stock in exchange of $2.4 million principal amount. Management accounted this transaction as troubled debt restructuring under ASC 470-60 since the Company was experiencing financial difficulty and the effective borrowing rate on the new debt is less than the effective borrowing rate on the original debt. As a result, the Company recognized fair value of equity approximately $72 thousand in additional paid in capital and deferred recognizing $2.4 million gain on restructured debt until the note is fully settled. For the year ended December 31, 2025 and 2024, the Company repaid $210 thousand and $455 thousand of the convertible promissory notes, respectively. As of December 31, 2025, the conversion price of the convertible promissory notes was $0.01 per share.

The convertible promissory notes bear interest at the rate of 2% per year (10% in case of default), payable semi-annually on the last business day of August and January of each year and will mature on the 3rd anniversary of the original issue date, unless earlier converted or prepaid. The convertible promissory notes are prepayable in whole or in part at the election of the holders. The convertible promissory notes are general, unsecured obligations of the Company.

In February and March 2024, Company entered into Exchange Agreements (the "Exchange Notes") with certain convertible notes holders pursuant to which it agreed to issue total of $11.1 million principal amount of convertible promissory notes of the Company due one year from issuance of the Exchange Notes in exchange for the surrender for cancellation and satisfaction in full of a like principal amount of our outstanding convertible promissory notes due in 2024. The surrendered notes bore interest at the annual rate of 2%, payable semi-annually, and were convertible at the election of the holder into shares of the Company's common stock at the conversion rate of $0.13 per share. The Exchange Notes bear interest at the annual rate of 10% and are convertible into shares of the Company’s common stock at an initial conversion rate of $0.13 per share, subject to decrease, but not increase, at the end of each three-month period from issuance to equal the VWAP (as defined) of the Company’s common stock and to adjustment in the event of a stock split, reverse stock split and similar events. The principal amount of and accrued interest on the Exchange Notes will be payable in two equal semi-annual installments. No additional consideration was paid in connection with the exchange. The convertible promissory notes are general, unsecured obligations of the Company. Management evaluated if the transaction qualified as troubled debt restructuring under ASC 470-60. Since the Company was experiencing financial difficulty and the effective borrowing rate on the restructured debt is less than the effective borrowing rate on the original debt, this transaction was accounted for as a troubled debt restructuring. As a result, the Company recorded a gain on restructured debt of $1.0 million in the consolidated statement of operations for the year ended December 31, 2024. As of December 31, 2025, $8.6 million principal amount of the Exchange Notes was due and payable on demand.

The conversion feature of the original convertible promissory notes and the Exchange Notes is separately accounted for at fair value as a derivative liability under guidance in ASC 815 that is remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value of the conversion feature liability recorded in the statements of operations. As of December 31, 2025, the convertible promissory note became due and the conversion rate exceeded stock price and, therefore, the fair value of conversion feature was determined to be zero.

The fair value and any change in fair value of conversion feature liability are determined using a binomial lattice model. The model produces an estimated fair value based on changes in the price of the underlying common stock.

In March 2023, Dr. Niihara and his wife and Hope International Hospice, Inc., loaned the Company $127 thousand and $100 thousand, respectively. Both loans are due on demand and bear interest at the rate of 10% annum.

In July 2023, Emmaus Medical reentered into a new Revenue Purchase Agreement pursuant to which it sold and assigned $828 thousand of future receipt in exchange for repayment of $204 thousand indebtedness from the previous agreement and net cash proceeds of approximately $300 thousand Under the new agreement, the Company agreed to pay the third party approximately $26 thousand weekly until the Future Receipts have been collected. In February 2024, the Company repaid all balance in accordance with the agreement.

In September 2023, the Company entered into a Business Loan and Security Agreement with a third-party lender pursuant to which the lender loaned the Company $2.2 million, of which the Company received net proceeds of approximately $2.1 million after deduction of the lender’s origination fee but without deduction for other transaction expenses. Under the agreement, the Company agree to pay the third party approximately $53 thousand weekly for 56 weeks, or total amount of approximately $3.0 million. The portion of proceeds were used to prepay indebtedness. In October 2024, the company repaid all balance in accordance with the agreement.

In September 2023, Smart Start Investments Limited, of which Wei Pei Zen is a director and 9.96% shareholder, loaned the Company the principal amount of $1 million in exchange for a convertible promissory note of the Company. The convertible promissory note was due on September 5, 2024, bore interest at the annual rate of 10%, payable at maturity, and was convertible at the option of the holder into shares of common stock at a conversion rate of $0.29 a share, subject to adjustment in the event of a stock split, reverse stock split or similar event. On March 5, 2024, the conversion feature of the convertible promissory note no longer met the scope exception in ASC 815-10-15-74 as the investors' Rule 144(d) holding period for the Company ended and separately accounted for at fair value as a derivative liability that is remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in fair value of the conversion feature liability recorded in the condensed consolidated statements of operations. As of March 5, 2024, the fair value of the conversion feature was $2 thousand. In September 2024, the convertible promissory note became due. As of December 31, 2024, the conversion rate exceeds stock price and therefore, the fair value of conversion feature was determined to be zero.

In October 2023, Emmaus Medical entered into a Purchase and Sales of Future Receivables Agreement with a third party pursuant to which it sold and assigned $1.4 million of future receipt (the "Purchased Amount") in exchange for net cash proceeds of $875 thousand. Under the agreement, the Company agreed to pay the third party approximately $81 thousand weekly until the Purchase Amount has collected. In February 2024, the Company repaid all balance in accordance with the agreement.

In November 2023, Emmaus Medical entered into an Agreement for the Purchase and Sale of Future Receipts with a third party pursuant to which it sold and assigned $762 thousand of future receipts (the "Purchase Amount") in exchange for net cash proceeds of $469 thousand. Under the agreement, the Company agreed to pay the third party approximately $49 thousand weekly until the Purchase Amount has been collected. In March 2024, the Company repaid all balances in accordance with the agreement.

In December 2023, Wei Peu Zen, a Director of the Company loaned the Company the principal amount of $700 thousand. The loan was due in two months and bears interest at the rate of 5% per month. In February 2024, the Company repaid $350 thousand in principal plus accrued interest on the loan.

Beginning in February 2024, two related holders of demand promissory notes of the Company in the aggregate principal amount of approximately $2.8 million demanded repayment of the notes plus accrued interest. The Company has

acknowledged its indebtedness to the holders and intends to seek to enter into a plan to repay the notes in installments. To date, the parties have not reached an agreement with respect to repayment of the notes.

In March 2024, Smart Start Investments Limited, of which Wei Peu Zen, a director of the Company is a director and 9.96% shareholder, loaned the Company the principal amount of $1.4 million. The loan was due in two months and bears interest at the rate of 2.5% per month. As of May 2024, the loan became due on demand and default rate of 5.0% per month became applicable.

In May 2024, Emmaus Medical entered into a Sale of Future Receipts Agreement with a third party pursuant to which it sold and assigned $1.6 million of future receipts (the "Purchased Amount") in exchange for net cash proceeds of $1.0 million. Under the agreement, the Company agreed to pay the third party approximately $58 thousand weekly until the Purchased Amount has been collected. In November 2024, the Company repaid all balance in accordance with the agreement.

In September 2024, Emmaus Medical entered into a Sale of Future Receipts Agreement with a third party pursuant to which it sold and assigned $1.3 million of future receipts (the "Purchased Amount") in exchange for net cash proceeds of $800 thousand. Under the agreement, the Company agreed to pay the third party $35 thousand weekly for 10 weeks and $41 thousand weekly thereafter until the Purchase Amount has been collected. In February 2025, the Company repaid in full the outstanding balance of $343 thousand and recognized debt extinguishment loss of $164 thousand as the Company entered into February 2025 loan discussed below.

In October 2024, the Company entered into a Note Amendment Agreement (the “Amendment”) with a third party note holder under which the annual interest rates under promissory notes issued in April 2022 and in April 2023 were reduced to 1% from 10% and 11%, respectively. No issuance costs were incurred in relation to the Amendment, and the remaining terms of the Notes remain in full force and effect. Management evaluated whether the transaction qualified as troubled debt restructuring under ASC 470-60. Since the Company was experiencing financial difficulty and the effective borrowing rate on the restructured debt was less than the effective borrowing rate on the original debt, the transaction was accounted for as a troubled debt restructuring. As the modified undiscounted future cash payments equaled to or exceeded the carrying amount at restructuring for each of the Notes, no gain was recognized on the restructuring.

In December 2024, Emmaus Medical entered into a Sale of Future Receipts Agreement ("December 2024 loan") with a third party pursuant to which it sold and assigned $1.5 million of future receipts (the "Purchased Amount") in exchange for net cash proceeds of $910 thousand. Under the agreement, the Company agreed to pay the third party $43 thousand weekly until the Purchase Amount has been collected. In May 2025, the Company repaid in full the outstanding balance of $412 thousand and recognized debt extinguishment loss of $212 thousand as the Company entered into May 2025 loan discussed below.

In February 2025, the Company entered into an Agreement for the Purchase and Sales of Future Receipts (the "February 2025 loan") with a third party to which it sells $1.9 million of future receipts (the "Purchased Amount") in exchange for net proceeds of $1.3 million with origination fee of $119 thousand. Under the agreement, the Company agreed to pay the third party approximately $49 thousand weekly until the Purchased Amount has been collected. A portion of the net proceeds were used to pay off the September 2024 loan discussed above. In August 2025, the Company repaid in full the outstanding balance of $612,000 and recognized debt extinguishment loss of $296 thousand as the Company entered into August 2025 loan discussed below.

In May 2025, the Company entered into an Agreement ("May 2025 loan") for the Purchase and Sales of Future Receipts with a third party pursuant to which it sells $2.1 million of future receipts (the "Purchase Amount") in exchange for net proceeds of $1.5 million with origination fee of $131 thousand. Under the agreement, the Company agrees to pay the third party approximately $62 thousand weekly until the Purchased Amount has been collected. A portion of the net proceeds were used to pay off the December 2024 loan discussed above. In October 2025, the Company repaid in full the outstanding balance of approximately $648 thousand as the Company entered into October 29, 2025 loan discussed below.

In June 2025, the Company entered into an Agreement for the Future Receivables Sale and Purchase Agreement (the "June 2025 loan") with a third party pursuant to which it sold and assigned $1,012,500 of future receipts (the "Purchased Amount") in exchange for net proceeds of $712,500 with origination fee of $37,550. Under the agreement, the Company agrees to pay the third party approximately $51,000 weekly until the Purchased Amount has been collected. In October 2025, the Company repaid in full the outstanding balance of principal $150 thousand and recognized debt extinguishment loss of $54,000 as the Company entered into October 1, 2025 loan discussed below.

In August 2025, the Company entered into an Agreement for the Purchase and Sale of Future Receipts ("August 2025 loan") with a third party pursuant to which it sold and assigned $1.9 million of future receipts (the "Purchased Amount") in

exchange for net proceeds of $1.2 million, net of an origination fee of $117,000. Under the agreement, the Company agrees to pay the third party approximately $59 thousand weekly until the Purchased Amount has been collected. A portion of the net proceeds were used to pay off the February 2025 loan. In October 2025 the Company repaid in full the outstanding balance of $832 thousand as the Company entered into October 29, 2025 loan discussed below.

In September 2025, the Company entered into a Purchase of Future Receipts Agreement ("September 2025 loan") with a third party. It loaned principal amount of $141 thousand with a financial charge of $65 thousand. Under the agreement, the Company agrees to pay the third party approximately $11 thousand weekly for 18 weeks. As of December 31, 2025, the outstanding balance of the loan was $33 thousand. In January 2026, the Company repaid all balance in accordance with the agreement.

In October 2025, the Company entered into an Agreement for the Purchase and Sale of Future Receipts ("October 1, 2025 loan") with a third party pursuant to which it sold and assigned $938 thousand of future receipts (the "Purchase Amount") in exchange for net proceeds of $641 thousand net of origination fee of $34 thousand. Under the agreement, the Company agrees to pay the third party approximately $52 thousand weekly until the Purchase Amount has been collected. A portion of the net proceeds were used to prepay June 2025 loan. As of December 2025, the outstanding balance of the loan was $174 thousand.

In October 2025, the Company entered into an Agreement for the Purchase and Sale of Future Receipts ("October 29, 2025 loan") with a third party pursuant to which it sold and assigned $3.6 million of future receipts (the "Purchase Amount") in exchange for net proceeds of $2.3 million net of origination fee of $250 thousand. Under the agreement, the Company agrees to pay the third party approximately $94 thousand weekly until the Purchase Amount has been collected. A portion of the net proceeds were used to prepay the May 2025 and August 2025 loan and the Company recognized debt extinguishment of $637 thousand. As of December 31, 2025, the outstanding balance of the loan was $2.0 million.

In December 2025, the Company entered into an Agreement for the Purchase and Sale of Future Receipts ("December 2025 loan") with a third party pursuant to which it sold and assigned $750 thousand of future receipts (the "Purchase Amount") in exchange for net proceeds of $455 thousand net of origination fee of $45 thousand. Under the agreement, the Company agrees to pay the third party approximately $54 thousand weekly until the Purchase Amount has been collected. As of December 31, 2025, the outstanding balance of the loan was $393 thousand. In Feburary 2026, the Company repaid in full the outstanding balance as the Company entered into a new loan discussed in Note 14.

Except as otherwise indicated above, the proceeds of the foregoing loans and other arrangements were used to augment the Company's working capital. See Note 14 for more information regarding notes payable agreements entered subsequent to December 31, 2025.