Year

Issued

Interest Rate

Range

Term of Notes

Conversion

Price

Principal

Outstanding September 30, 2022

Unamortized Discount September 30, 2022

Carrying

Amount September 30, 2022

Underlying Shares September 30, 2022

Notes payable

2013

10%

Due on demand

—

$

692

$

—

$

692

—

2021

11%

Due on demand - 2 years

—

2,719

—

2,719

—

2022

11%-36%

Due on demand - 7 month

—

2,243

19

2,224

—

$

5,654

$

19

$

5,635

—

Current

$

5,654

$

19

$

5,635

—

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

—

5,501

135

5,361

(c)

—

$

6,301

$

135

$

6,161

—

Current

$

2,780

$

—

$

2,780

—

Non-current

$

3,521

$

135

$

3,381

—

Convertible notes payable

2020(a)

12%

3 years

$

10.00

3,150

—

3,150

320,067

2021(b)

2%

3 years

$

0.37

14,315

3,119

11,196

41,112,131

$

17,465

$

3,119

$

14,346

41,432,198

Current

$

17,465

$

3,119

$

14,346

41,432,198

Total

$

29,421

$

3,273

$

26,143

41,432,198

Year

Issued

Interest Rate

Range

Term of Notes

Conversion

Price

Principal

Outstanding

December 31,

2021

Unamortized

Discount

December 31,

2021

Carrying

Amount

December 31,

2021

Underlying Shares

December 31, 2021

Notes payable

2013

10%

Due on demand

—

$

869

$

—

$

869

—

2021

11%

Due on demand - 2 years

—

3,030

—

3,030

—

$

3,899

$

—

$

3,899

—

Current

$

2,399

$

—

$

2,399

—

Non-current

$

1,500

$

—

$

1,500

—

Notes payable - related parties

2020

12%

Due on demand

—

$

100

$

—

$

100

—

2021

12%

Due on demand

—

700

—

700

—

$

800

$

—

$

800

—

Current

$

800

$

—

$

800

—

Convertible notes payable

2020(a)

12%

3 years

$

10.00

3,150

—

3,150

316,756

2021(b)

2%

3 years

$

1.48

14,490

4,332

10,158

9,856,343

$

17,640

$

4,332

$

13,308

10,173,099

Current

$

14,490

$

4,332

$

10,158

9,856,343

Non-current

$

3,150

$

—

$

3,150

316,756

Total

$

22,339

$

4,332

$

18,007

$

10,173,099

(a)

This note is convertible into shares of EMI Holding, Inc., a wholly owned subsidiary of Emmaus Life Sciences, Inc.

(b)

The notes are convertible into shares of common stock of Emmaus Life Sciences, Inc. Beginning February 28, 2022, the note holders became entitled to call for redemption of the convertible notes payable at any time. Accordingly, the notes are classified as current liabilities.

(c)

Includes $41,000 of the fair value of embedded derivative.

September 30, 2022

December 31, 2021

Principal outstanding (South Korean won)

KRW 26.5 billion

KRW 30 billion

Stock price

KRW1,075

KRW2,925

Expected life (in years)

8.04

8.79

Selected yield

16.75

%

10.50

%

Expected volatility (Telcon common stock)

78.80

%

81.31

%

Risk-free interest rate (South Korea government bond)

4.14

%

2.19

%

Expected dividend yield

—

—

Conversion price

KRW1,150 (US$0.80)

KRW2,847 (US$2.39)

Convertible promissory notes

September 30, 2022

December 31, 2021

Stock price

$

0.17

$

1.67

Conversion price

$

0.37

$

1.48

Selected yield

30.93

%

21.99

%

Expected volatility

50

%

50

%

Time until maturity (in years)

1.41

2.16

Dividend yield

—

—

Risk-free rate

4.12

%

0.77

%

Convertible promissory notes

September 30, 2022

December 31, 2021

Balance, beginning of period

$

7,507

$

—

Fair value at issuance date

—

5,594

Change in fair value included in the statement of operations

(3,235

)

1,913

Balance, end of period

$

4,272

$

7,507