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, 2025

Notes payable consisted of the following at December 31, 2025 and 2024 (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, 2025		Unamortized Discount December 31, 2025		Capitalized amount December 31, 2025		Carrying Amount December 31, 2025		Shares Underlying Notes December 31, 2025
Notes payable
2013	10%	Due on demand		—		$	638	$	—	$	—	$	638		—
2022	10% - 12%	Due on demand		—			505		—		—		505		—
2023	11%	Due on demand		—			3,093		—		—		3,093		—
2024	30%	Due on demand		—			1,400		—		—		1,400		—
2025	44% - 59%	18-37 weeks		—			2,574		191		—		2,383		—
						$	8,210	$	191	$	—	$	8,019		—
		Current				$	8,210	$	191	$	—	$	8,019		—
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		—			4,076		50		—		4,026		—
2023	10%-60%	Due on demand		—			577		—		—		577		—
						$	5,453	$	50	$	—	$	5,403		—
		Current				$	3,132	$	—	$	—	$	3,132		—
		Non-current				$	2,321	$	50	$	—	$	2,271		—
Convertible notes payable
2021	10%	Due on Demand	$	0.01			685		—		—		685		102,887,683
2023	13%	Due on Demand	$	10.00	(a)		3,150		—		—		3,150		419,338
2023	10%	Due on Demand	$	0.29			1,000		—		—		1,000		4,813,393
2024	12%	Due on Demand	$	0.01			8,630		—		3,915		12,545		200,000,000
						$	13,465	$	—	$	3,915	$	17,380		308,120,414
		Current				$	13,465	$	—	$	3,915	$	17,380		308,120,414
		Grand Total				$	27,128	$	241	$	3,915	$	30,802		308,120,414


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		—
		Non-current													—
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	$	0.03			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	$	0.03			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

(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, 2025, future contractual principal payments due on notes payable were as follows (in thousands):


Year Ending
2026	$	24,807
2027		2,321
2028		—
2029		—
2030		—
Total	$	27,128

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.


	November 2025			January 2024
Stock price	$	0.01		$	0.11
Exercise price	$	0.01		$	0.15
Expected term	5 years			5-5.75 years
Risk-free rate		3.68	%	3.80-3.81%
Dividend yield	—			—
Volatility		363.44	%	127.39-136.00%

Schedule of Fair Value Based upon Assumptions

The fair values as of December 31, 2025 and December 31, 2024 were based upon following assumptions:


	December 31, 2025			December 31, 2024
Principal outstanding (South Korean won)	KRW 17.0 billion			KRW 20.1 billion
Stock price	KRW 917			KRW 5870
Expected life (in years)		4.79			5.79
Selected yield		13.50	%		9.50	%
Expected volatility (Telcon common stock)		67.04	%		62.90	%
Risk-free interest rate (South Korea government bond)		3.21	%		2.78	%
Expected dividend yield		—			—
Conversion price	KRW1,000(US$0.69)			KRW5,850(US$3.96)

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, 2025 and December 31, 2024 (in thousands):


Conversion feature liability	December 31, 2025			December 31, 2024
Balance, beginning of year	$	162		$	451
Change in fair value included in the statement of operations		(162	)		(289	)
Balance, end of year	$	—		$	162

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

Schedule of Fair Value Based upon Assumptions

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


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