Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 15, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Entity Registrant Name | Emmaus Life Sciences, Inc. | ||
Entity Central Index Key | 0000822370 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2022 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-35527 | ||
Entity Tax Identification Number | 87-0419387 | ||
Entity Incorporation State Country Code | DE | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Address, Address Line One | 21250 Hawthorne Boulevard | ||
Entity Address, Address Line Two | Suite 800 | ||
Entity Address, City or Town | Torrance | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90503 | ||
City Area Code | 310 | ||
Local Phone Number | 214‑0065 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Common Stock, Shares Outstanding | 50,934,852 | ||
Entity Public Float | $ 15,596,954 | ||
Title of 12(g) Security | Common stock, par value $0.001 per share | ||
Auditor Name | BAKER TILLY US, LLP | ||
Auditor Location | San Diego, California | ||
Auditor Firm ID | 23 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,021 | $ 2,279 |
Accounts receivable, net | 375 | 1,040 |
Inventories, net | 2,379 | 4,392 |
Prepaid expenses and other current assets | 1,514 | 1,380 |
Total current assets | 6,289 | 9,091 |
Property and equipment, net | 75 | 147 |
Equity method investment | 18,828 | 17,616 |
Right of use assets | 2,799 | 3,485 |
Investment in convertible bond | 19,971 | 26,100 |
Other assets | 263 | 295 |
Total assets | 48,225 | 56,734 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 13,549 | 9,189 |
Operating lease liabilities, current portion | 703 | 740 |
Conversion feature derivative, notes payable | 3,248 | 7,507 |
Other current liabilities | 12,917 | 4,404 |
Revolving line of credit from related party | 400 | |
Warrant derivative liabilities | 70 | 1,503 |
Notes payable, current portion, net of discount | 6,814 | 2,399 |
Notes payable to related parties | 2,367 | 800 |
Convertible notes payable, net of discount | 14,655 | 10,158 |
Total current liabilities | 54,323 | 37,100 |
Operating lease liabilities, less current portion | 2,553 | 3,261 |
Other long-term liabilities | 21,714 | 33,173 |
Notes payable, less current portion | 380 | 1,500 |
Notes payable to related parties, net | 3,346 | |
Convertible notes payable | 3,150 | |
Total liabilities | 82,316 | 78,184 |
STOCKHOLDERS’ DEFICIT | ||
Preferred stock, par value $0.001 per share, 15,000,000 shares authorized, none issued or outstanding | ||
Common stock, par value $0.001 per share, 250,000,000 shares authorized, 49,583,501 and 49,311,864 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 50 | 49 |
Additional paid-in capital | 220,815 | 220,022 |
Accumulated other comprehensive loss | (2,619) | (255) |
Accumulated deficit | (252,337) | (241,266) |
Total stockholders' deficit | (34,091) | (21,450) |
Total liabilities & stockholders' deficit | $ 48,225 | $ 56,734 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 49,583,501 | 49,311,864 |
Common stock, outstanding | 49,583,501 | 49,311,864 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
REVENUES, NET | $ 18,390 | $ 20,610 |
COST OF GOODS SOLD | 2,588 | 3,312 |
GROSS PROFIT | 15,802 | 17,298 |
OPERATING EXPENSES | ||
Research and development | 1,725 | 4,110 |
Selling | 7,493 | 5,878 |
General and administrative | 13,170 | 13,438 |
Total operating expenses | 22,388 | 23,426 |
LOSS FROM OPERATIONS | (6,586) | (6,128) |
OTHER INCOME (EXPENSE) | ||
Loss on debt extinguishment | (501) | (365) |
Change in fair value of warrant derivative liabilities | 1,304 | (432) |
Change in fair value of conversion feature derivative, notes payable | 4,259 | (1,906) |
Loss on investment in convertible bond | (133) | |
Net loss on equity method investment | (1,913) | (2,733) |
Foreign exchange loss | (2,662) | (2,017) |
Interest and other income | 680 | 761 |
Interest expense | (5,013) | (3,101) |
Total other expense | (3,979) | (9,793) |
LOSS BEFORE INCOME TAXES | (10,565) | (15,921) |
Income tax provision | 60 | 25 |
NET LOSS | (10,625) | (15,946) |
COMPONENTS OF OTHER COMPREHENSIVE LOSS | ||
Unrealized loss on debt securities available for sale (net of tax) | (3,084) | (1,766) |
Reclassification adjustment for loss included in net income | 7 | |
Foreign currency translation adjustments | 713 | 367 |
Other comprehensive loss | (2,364) | (1,399) |
COMPREHENSIVE LOSS | $ (12,989) | $ (17,345) |
NET LOSS PER COMMON SHARE - BASIC | $ (0.21) | $ (0.32) |
NET LOSS PER COMMON SHARE - DILUTED | $ (0.21) | $ (0.32) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC | 49,439,867 | 49,253,156 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 49,439,867 | 49,253,156 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Balance, beginning at Dec. 31, 2020 | $ (5,158) | $ 49 | $ 218,728 | $ 1,144 | $ (225,079) |
Balance, beginning (in shares) at Dec. 31, 2020 | 48,987,189 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Fair value of warrants including down-round protection adjustments | 241 | (241) | |||
Common stock issued for services | 500 | 500 | |||
Common stock issued for services (in shares) | 324,675 | ||||
Share-based compensation | 553 | 553 | |||
Unrealized gain (loss) on debt securities available for sale (net of tax) | (1,766) | (1,766) | |||
Foreign currency translation effect | 367 | 367 | |||
Net loss | (15,946) | (15,946) | |||
Balance, ending at Dec. 31, 2021 | (21,450) | $ 49 | 220,022 | (255) | (241,266) |
Balance, ending (in shares) at Dec. 31, 2021 | 49,311,864 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Reclassification of warrants from liability to equity | 213 | 213 | |||
Fair value of warrants including down-round protection adjustments | 446 | (446) | |||
Common stock issued for services | 119 | $ 1 | 118 | ||
Common stock issued for services (in shares) | 271,637 | ||||
Share-based compensation | 16 | 16 | |||
Unrealized gain (loss) on debt securities available for sale (net of tax) | (3,084) | (3,084) | |||
Reclassification adjustment for loss included in net income | 7 | 7 | |||
Foreign currency translation effect | 713 | 713 | |||
Net loss | (10,625) | (10,625) | |||
Balance, ending at Dec. 31, 2022 | $ (34,091) | $ 50 | $ 220,815 | $ (2,619) | $ (252,337) |
Balance, ending (in shares) at Dec. 31, 2022 | 49,583,501 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (10,625) | $ (15,946) |
Adjustments to reconcile net loss to net cash flows used in operating activities | ||
Depreciation and amortization | 53 | 59 |
Inventory reserve | 1,565 | 2,221 |
Amortization of discount of notes payable and convertible notes payable | 1,815 | 1,810 |
Foreign exchange adjustments | 2,773 | 2,004 |
Net loss on investment in convertible bond | 133 | |
Loss on equity method investment | 1,913 | 2,733 |
Loss on debt extinguishment | 501 | 365 |
Loss (Gain) on disposal of property and equipment | 2 | (1) |
Loss on leased assets | 22 | |
Share-based compensation | 16 | 553 |
Shares issued for services | 119 | 500 |
Change in fair value of warrant derivative liabilities | (1,304) | 432 |
Change in fair value of conversion feature derivative, notes payable | (4,259) | 1,906 |
Changes in fair value of embedded derivative, note payable from related party | (6) | |
Net changes in operating assets and liabilities | ||
Accounts receivable | 607 | (845) |
Inventories | 434 | 462 |
Prepaid expenses and other current assets | (32) | 93 |
Other non-current assets | 591 | 566 |
Income tax receivable and payable | 25 | (30) |
Accounts payable and accrued expenses | 3,678 | 2,060 |
Other current liabilities | (2,777) | 707 |
Other long-term liabilities | (317) | (903) |
Net cash flows used in operating activities | (5,073) | (1,254) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of convertible bond | 2,919 | |
Purchases of property and equipment | (26) | (73) |
Loan to equity method investee | (5,280) | (6,304) |
Net cash flows used in investing activities | (2,387) | (6,377) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable issued, net of issuance cost | 6,468 | |
Proceeds from notes payable issued, net of issuance cost, related party | 3,900 | 1,700 |
Proceeds from convertible notes payable issued, net of issuance cost and discount | 14,490 | |
Payments of notes payable | (1,809) | (179) |
Payments of notes payable, related party | (976) | (1,400) |
Payments of convertible notes | (350) | (7,200) |
Net cash flows provided by financing activities | 7,233 | 7,411 |
Effect of exchange rate changes on cash | (31) | 12 |
Net decrease in cash, cash equivalents and restricted cash | (258) | (208) |
Cash, cash equivalents and restricted cash, beginning of period | 2,279 | 2,487 |
Cash, cash equivalents and restricted cash, end of period | 2,021 | 2,279 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES | ||
Interest paid | 1,335 | 945 |
Income taxes paid | 4 | 21 |
NON-CASH INVESING AND FINANCING ACTIVITIES | ||
Debt discount due to embedded derivative | 68 | $ 5,555 |
Debt discount due to deferred financing cost | 328 | |
Debt discount due to warrants | 84 | |
Note payable extinguished through issuance of related party note payable | $ 1,669 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1—DESCRIPTION OF BUSINESS Organization —On July 17, 2019 Emmaus Life Sciences, Inc. (formerly, “MYnd Analytics, Inc.” and herein the “Company” or “Emmaus”) completed its merger transaction (the “Merger”) with EMI Holding, Inc., formerly known as Emmaus Life Sciences, Inc. (“EMI Holding”). In the Merger, a wholly owned subsidiary of the Company merged into EMI Holding, with EMI Holding surviving the Merger as a wholly owned subsidiary. Immediately after completion of the Merger, the Company changed its name to “Emmaus Life Sciences, Inc.” The Merger was treated as a reverse recapitalization under the acquisition method of accounting in accordance with accounting principles generally accepted in the U.S. (“GAAP”) For accounting purposes, EMI Holding was considered to have acquired the Company. In connection with and prior to the Merger, the Company contributed and transferred to Telemynd, Inc. (“Telemynd”), a newly formed, subsidiary of the Company, all or substantially all of the Company’s historical business, assets and liabilities and the Company’s board of directors declared a stock dividend of share of the Telemynd common stock held by the Company for each outstanding share of Company common stock after giving effect to a 1-for-6 reverse stock of the Company’s outstanding shares of common stock. The dividend, together with the contribution and transfer of the Company’s historical business, assets, and liabilities described above, is referred to as the “spin-off.” As a result of the spin-off and the Merger, the Company’s ongoing business became EMI Holding’s business, which is that of a commercial-stage biopharmaceutical company focused on the development, marketing and sale of innovative treatments and therapies, including those in the rare and orphan disease categories. References herein to the “Company” or “Emmaus” means Emmaus Life Sciences, Inc. and its direct and direct subsidiaries. Nature of Business —The Company is a commercial-stage biopharmaceutical company engaged in the discovery, development, marketing and sales of innovative treatments and therapies, primarily for rare and orphan diseases. The Company’s lead product Endari® (prescription grade L-glutamine oral powder) is approved by the U.S. Food and Drug Administration, or FDA, to reduce the acute complications of sickle cell disease (“SCD”) in adult and pediatric patients five years of age and older. Endari® has received Orphan Drug designation from the FDA and Orphan Medicinal designation from the European Commission, which designations generally afford marketing exclusivity for Endari® for a seven-year period in the U.S. and for a ten-year period in the European Union, respectively, following marketing approval. Endari® is marketed and sold by the internal commercial sales team. Endari® is reimbursable by the Centers for Medicare and Medicaid Services, and every state provides coverage for Endari® for outpatient prescriptions to all eligible Medicaid enrollees within their state Medicaid programs. Endari® is also reimbursable by many commercial payors. The Company has agreements in place with the nation’s leading distributors, as well as physician group purchasing organizations and pharmacy benefits managers, making Endari® available at selected retail and specialty pharmacies nationwide. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation —The accompanying consolidated financial statements have been prepared in accordance with GAAP codified in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Going concern — The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. The Company incurred a net loss of $ 10.6 million for the year ended December 31, 2022 and had a working capital deficit of $ 48.0 million as of December 31, 2022. Management expects that the Company's current liabilities, operating losses and expected capital needs, including the expected costs relating to the commercialization of Endari® in the Middle East North Africa region and elsewhere and continued funding of EJ Holdings, will exceed its existing cash balances and cash expected to be generated from operations for the foreseeable future. In order to meet the Company’s current liabilities and future obligations, the Company will need to restructure or refinance its existing indebtedness and raise additional funds through related-party loans, third-party loans, equity and debt financings or licensing or other strategic agreements. The Company has no understanding or arrangement for any additional financing, and there can be no assurance that the Company will be able to obtain additional related-party or third-party loans or complete any additional equity or debt financings on favorable terms, or at all, or enter into licensing or other strategic arrangements. Due to the uncertainty of the Company’s ability to meet its current liability and operating expenses, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months from the date of this filing. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Principles of consolidation —The consolidated financial statements include the accounts of the Company and EMI Holding subsidiary and EMI Holding’s wholly‑owned subsidiary, Emmaus Medical Inc., and Emmaus Medical, Inc’s wholly‑owned subsidiaries. All significant intercompany transactions have been eliminated. Estimates —Financial statements prepared in accordance with GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include those relating to revenue recognition on product sales, the estimated useful lives of equipment, impairment of assets, the variables used to calculate the valuation of conversion features, stock options and warrants, and estimated accruals on an ongoing basis. The Company bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates under different assumptions or conditions. To the extent there are material differences between these estimates and actual results, the Company’s financial statements will be affected. Revenue recognition — The Company realizes net revenues primarily from sales of Endari® to distributors and specialty pharmacy providers. Distributors resell Endari® to other pharmacy and specialty pharmacy providers, health care providers, hospitals, and clinics. In addition to agreements with these distributors, the Company has contractual arrangements with specialty pharmacy providers, in-office dispensing providers, physician group purchasing organizations, pharmacy benefits managers and government entities that provide for government-mandated or privately negotiated rebates, chargebacks and discounts with respect to the purchase of Endari®. These various discounts, rebates, and chargebacks are referred to as “variable consideration.” Revenue from product sales is recorded net of variable consideration. Under ASC 606 Revenue from Contracts with Customers , the Company recognizes revenue when its customers obtain control of the Company's product, which typically occurs on delivery. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for the product, or transaction price. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company performs the following 5 steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the Company’s performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the relevant performance obligations. Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of sales discounts, returns, government rebates, chargebacks and commercial discounts. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible transaction prices. Actual variable consideration may differ from the Company's estimates. If actual results vary from the Company's estimates, the Company adjusts the variable consideration in the period such variances become known, which would affect net revenues in that period. The following are our significant categories of variable consideration: Sales Discounts : The Company provides its customers prompt payment discounts and from time to time offers additional discounts for bulk orders that are recorded as a reduction of revenues in the period the revenues are recognized. Product Returns : The Company offers distributors a right to return product purchased principally based upon (i) overstocks, (ii) inactive product or non-moving product due to market conditions, and (iii) expired products. Product return allowances are estimated and recorded at the time of sale. Government Rebates : The Company is subject to discount obligations under state Medicaid programs and the Medicare Part D prescription drug coverage gap program. Management estimates Medicaid and Medicare Part D prescription drug coverage gap rebates based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenues are recognized, resulting in a reduction of product revenues and the establishment of a current liability that is included as an accounts payable and accrued expenses in the consolidated balance sheets. The liability for these rebates consists primarily of estimates of claims expected to be received in future periods related to recognized revenues. Chargebacks and Discounts : Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to certain specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities at prices lower than the list prices charged to distributors. The distributors charge the Company for the difference between what they pay for the products and the Company’s contracted selling price to these specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities. In addition, the Company has contractual agreements with pharmacy benefit managers who charge us for rebates and administrative fee in connection with the utilization of product. These reserves are established in the same period that the related revenues are recognized, resulting in a reduction of revenues. Chargeback amounts are generally determined at the time of resale of products by the distributors. Leases — In accordance with ASC 842 Leases , the Company determines whether an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use assets and operating lease liabilities are recognized based on the present value of remaining lease payments over the lease term. When the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease costs such as common area costs and other operating costs are expensed as incurred. For all lease agreements, lease and non-lease components are combined. No right-of-use asset and related lease liability are recorded for leases with an initial term of 12 months or less. Cash and cash equivalents —Cash and cash equivalents include short‑term securities, if any, with original maturities of less than ninety days. The Company maintains its cash and cash equivalents at insured financial institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss due to uninsured deposit is minimal. Accounts receivable — Accounts receivables are primarily attributable to product sales to customers. The Company makes judgements as to its ability to collect outstanding receivables and provides an allowance for receivables if and when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the quality and age of those invoices. The Company believes the credit risks associated with its customers are not significant. Factoring accounts receivable — Emmaus Medical, Inc., or Emmaus Medical, the Company’s indirect wholly owned subsidiary, entered into a purchase and sales agreement with Prestige Capital Finance, LLC or Prestige Capital, pursuant to which Emmaus Medical may offer and sell to Prestige Capital from time to time eligible accounts receivable in exchange for Prestige Capital’s down payment, or advance, to Emmaus Medical of 75 % of the face amount of the accounts receivable, subject to a $ 7.5 million cap on advances at any time. The balance of the face amount of the accounts receivables will be reserved by Prestige Capital and paid to Emmaus Medical, less discount fees of Prestige Capital ranging from 2.25 % to 7.25 % of the face amount, as and when Prestige Capital collects the entire face amount of the accounts receivable. Emmaus Medical’s obligations to Prestige Capital under the purchase and sale agreement are secured by a security interest in the accounts receivable and all or substantially all other assets of Emmaus Medical. In connection with the purchase and sale agreement, Emmaus guarantees Emmaus Medical’s obligations under the purchase and sale agreement. At December 31, 2022 and 2021, accounts receivable included approximately $ 730,000 and $ 587,000 of factored accounts receivable, respectively, and other current liabilities included approximately $ 55,000 and $ 12,000 of liabilities from factoring, respectively. For years ended December 31, 2022 and 2021, the Company incurred approximately $ 473,000 and $ 317,000 , respectively, of factoring fees included in general and administrative expenses. Inventories —Inventories consist of raw materials, finished goods and work-in-process and are valued on a first‑in, first‑out basis at the lesser of cost or net realizable value. Work‑in‑process inventories consist of L‑glutamine for the Company’s products that has not yet been packaged and labeled for sale. Substantially all raw materials purchase during the years ended December 31, 2022 and 2021 were supplied, directly or indirectly by one supplier. Inventories are presented net of reserves totaling $ 5.0 million and $ 3.4 million as of December 31, 2022 and 2021, respectively. Prepaid expenses and other current assets — Prepaid expenses and other current assets consist primarily of cost paid for future services or refunds from vendors which will occur within a year. Prepaid expenses include prepayment in insurance, subscription services, consulting and other services which are being amortized over the contract terms or recognized upon services are performed. Property and equipment — Equipment, Furniture and fixtures are recorded at historical cost and amortized on a straight‑line basis over their estimated useful lives of five to seven years . Leasehold improvements are recorded at historical cost and amortized on a straight‑line basis over the shorter of their estimated useful lives or the lease terms. Maintenance and repairs are expensed as incurred, while major additions and improvements are capitalized. Gains and losses on disposition are included in other income (expenses), if any. Impairment of long‑lived assets —The Company evaluates the carrying value of its long‑lived assets for impairment whenever events or changes in circumstances indicate that such carrying values may not be recoverable. The Management uses its best judgment based on the current facts and circumstances relating to the Company’s business when determining whether any significant impairment factors exist. If the Company determines that the carrying values of long‑lived assets may not be recoverable based upon the existence of one or more indicators of impairment, the Company performs an undiscounted cash flow analysis to determine if impairment exists. If impairment exists, the Company measures the impairment based on the difference between the asset’s carrying amount and its fair value, and the impairment is reflected in the consolidated statement of operations in the period in which the long‑lived asset impairment is determined to have occurred. No impairment existed as of December 31, 2022 and 2021 . Research and development —Research and development consists of expenditures for the research and development of the Company’s products and product candidates, which primarily involve contract research, payroll‑related expenses and other related supplies. Research and development costs are expensed as incurred. Share‑based compensation —The Company recognizes compensation cost for share‑based compensation awards over the service term of the recipients of the share‑based awards. The fair value of share‑based compensation is calculated using the Black‑Scholes‑Merton pricing model. The Black‑Scholes‑Merton model requires subjective assumptions regarding future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of awards granted is calculated using the simplified method allowed under the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin Nos. 107 and 110. The risk‑free rate selected to value any grant is based on the U.S. Treasury rate on the grant date that corresponds to the expected term of the award. Income taxes —The Company accounts for income taxes under the asset and liability method, wherein deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through the generation of future taxable income for the related jurisdictions. When tax returns are filed, it is highly probable that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more‑likely‑than‑not recognition threshold are recorded at the largest amount of tax benefit that is more than 50 percent likely of being realized upon examination by the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. As of December 31, 2022 and 2021, the Company had no unrecognized tax benefits and no positions which, in the opinion of management, would be reversed if challenged by a taxing authority. In the event the Company is assessed interest or penalties, such amounts will be classified as income tax expense in the financial statements. Comprehensive loss —Comprehensive loss includes net loss and other comprehensive loss relating to foreign translation adjustments of the Company’s subsidiaries and the changes in fair value of investment in convertible bond classified as available for sale. Equity method investment – The Company owns 40 % of the capital shares of EJ Holdings. A variable interest entity (“VIE”) such as EJ Holdings is to be consolidated by its primary beneficiary if the beneficiary has both a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company determined that it does not meet the power criterion for consolidating EJ Holdings and, accordingly, accounts for its variable interest in EJ Holdings under the equity method. Investment in convertible bond – The Company has elected the fair value option measuring its investment in convertible bond. The convertible bond is classified as available for sale and the changes in fair value are reported in other comprehensive loss for each reporting period. Foreign currency translation —The Company’s reporting currency is the U.S. dollar. The functional currencies of its foreign subsidiaries are the primary currencies within the counties in which they operate. Assets and liabilities of their operations are translated into U.S. dollars at period‑end exchange rates, and revenues, if any, and expenses are translated into U.S. dollars at average exchange rates in effect during each reporting period. Adjustments resulting from the translation are reported in other comprehensive loss. Financial instruments —Financial instruments included in the financial statements are comprised of cash and cash equivalents, investment in convertible bond, accounts receivable, warrant derivative liabilities, accounts payable, certain accrued liabilities, convertible notes payable, notes payable, conversion feature liabilities and other contingent liabilities. Fair value measurements —The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in accordance with ASC 820. The Company measures fair value under a framework that provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2: Inputs to the valuation methodology include: Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; and Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 inputs must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value measurement level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying values of cash and cash equivalents, accounts receivables, other current assets, account payable and accrued expenses, other current liabilities and revolving line of credit approximate fair value due to the short-term maturity of those instruments. The fair value of the Company's convertible debt instruments was determined based on Level 2 inputs. The carrying value of the debt was discounted based on allocating proceeds to other financial instruments within the arrangement as discussed in Note 7. Certain outstanding warrants contain price adjustment provisions and, consequently, are accounted for as liabilities that are remeasured at fair value on a recurring basis using Level 3 inputs. The level 3 inputs in the valuation of the warrants include expected term and expected volatility as discussed in Note 8. There are no other assets or liabilities measured at fair value on a recurring basis. Net loss per share —In accordance with ASC 260, “Earnings per Share, ” the basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. Dilutive net loss per share is computed in a similar manner, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of December 31, 2022 and 2021, there were 52,338,872 shares and 23,310,698 shares, respectively, of potentially dilutive securities outstanding. None of the potentially dilutive securities were included in the calculation of diluted loss per share since their effect would be anti‑dilutive for both periods presented. Segment reporting —The Company operates in one reportable segment. Recent accounting pronouncements — Management has considered all recent accounting pronouncements and determined that they will not have a material effect on the Company’s consolidated financial statements. |
REVENUES, NET
REVENUES, NET | 12 Months Ended |
Dec. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
REVENUES, NET | NOTE 3—REVENUES, NET Revenues, net by category were as follows (in thousands): Years ended December 31, 2022 2021 Endari® $ 17,854 $ 20,117 Other 536 493 Revenues, net 18,390 20,610 The following table summarizes the revenue allowance and accrual activities for the years ended December 31, 2022, and 2021 (in thousands): Trade Discounts, Allowances and Chargebacks Government Rebates and Other Incentives Returns Total Balance as of December 31, 2020 $ 134 $ 2,119 $ 473 2,726 Provision related to sales in the current year 3,065 3,845 234 7,144 Adjustments related to prior period sales 13 226 ( 148 ) 92 Credit and payments made ( 1,731 ) ( 3,057 ) ( 20 ) ( 4,808 ) Balance as of December 31, 2021 1,481 3,133 539 5,153 Provision related to sales in the current year 2,672 2,857 1,416 6,945 Adjustments related to prior period sales ( 56 ) 18 537 499 Credit and payments made ( 2,739 ) ( 2,290 ) ( 2,077 ) ( 7,106 ) Balance as of December 31, 2022 $ 1,358 $ 3,718 $ 415 $ 5,491 The following table summarizes revenue attributable to each of the customers that accounted for 10% or more of net revenues in either of the period shown: Years Ended December 31, 2022 2021 Customer A 25 % 50 % Customer B 27 % 29 % Customer C 14 % 10 % Customer D 13 % — The Company is a party to a distributor agreement with Telcon RF Pharmaceutical, Inc., or Telcon, pursuant to which it granted Telcon exclusive rights to the Company’s PGLG oral powder for the treatment of diverticulosis in South Korea, Japan and China in exchange for Telcon’s payment of a $ 10 million upfront fee and agreement to purchase from the Company specified minimum quantities of the finished product. In a related license agreement with Telcon, the Company agreed to use commercially reasonable best efforts to obtain product registration in these territories within three years of obtaining FDA marketing authorization for PGLG in this indication. Telcon has the right to terminate the distributor agreement in certain circumstances for failure to obtain such product registrations, in which event the Company would be obliged to repay Telcon the $ 10 million upfront fee. The upfront fee of $ 10 million is included as unearned revenue in other current liabilities and other long-term liabilities as of December 31, 2022 and 2021, respectively. Refer Notes 11 and 12 for additional details of the Company’s agreement with Telcon. |
SELECTED FINANCIAL STATEMENT AS
SELECTED FINANCIAL STATEMENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
SELECTED FINANCIAL STATEMENT ASSETS | NOTE 4—SELECTED FINANCIAL STATEMENT ASSETS Inventories consisted of the following (in thousand): As of December 31 2022 2021 Raw materials and components $ 1,393 $ 1,439 Work-in-process 513 115 Finished goods 5,428 6,228 Inventory reserve ( 4,955 ) ( 3,390 ) Total inventories, net $ 2,379 $ 4,392 Prepaid expenses and other current assets consisted of the following (in thousands): As of December 31 2022 2021 Prepaid insurance $ 598 $ 660 Prepaid expenses 467 326 Other current assets 449 394 Total prepaid expenses and other current assets $ 1,514 $ 1,380 Property and equipment consisted of the following (in thousands): As of December 31 2022 2021 Equipment $ 367 $ 342 Leasehold improvements 39 39 Furniture and fixtures 99 103 Construction-in-progress — 57 Total property and equipment 505 541 Less: accumulated depreciation ( 430 ) ( 394 ) Total property and equipment, net $ 75 $ 147 F or the years ended December 31, 2022 and 2021, depreciation expenses were approximately $ 39,000 and $ 46,000 , respectively. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
INVESTMENTS | NOTE 5 — INVESTMENTS Investment in convertible bond - On September 28, 2020, the Company entered into a convertible bond purchase agreement pursuant to which it purchased at face value a convertible bond of Telcon in the principal amount of approximately $ 26.1 million which matures on October 16, 2030 and bears interest at the rate of 2.1 % per year, payable quarterly. Beginning October 16, 2021, the Company became entitled on a quarterly basis to call for early redemption of all or any portion of the principal amount of the convertible bond. The convertible bond is convertible at the holder’s option at any time and from time to time into common shares of Telcon at an initial conversion price of KRW 9,232 , or approximately $ 8.00 per share. The initial conversion price is subject to downward adjustment on a monthly based on the volume-weighted average market price of Telcon shares as reported on Korean Securities Dealers Automated Quotations (“KOSDAQ”) Market and in the event of the issuance of Telcon shares or share equivalents at a price below the market price of Telcon shares and to customary antidilution adjustments upon a merger or similar reorganization of Telcon or a stock split, reverse stock split, stock dividend or similar event. The conversion price as of December 31, 2022 is set forth in the “Investment in convertible bond” table below. The convertible bond and any proceeds therefrom, including proceeds from any exercise of the early redemption right described above or the call option described below, are pledged as collateral to secure the Company’s obligations under the revised API Supply Agreement with Telcon described in Note 6 and Note 11. Concurrent with the purchase of the convertible bond, the Company entered into an agreement dated September 28, 2020 with Telcon pursuant to which Telcon or its designee is entitled to repurchase, at par, up to 50 % in principal amount of the convertible bond at any time and from time to time commencing October 16, 2021 and prior to maturity. The Company has elected the fair value option method of accounting for the investment in convertible bond. The investment in convertible bond is classified as an available for sale security and remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value option recorded in other comprehensive loss. The fair value and any changes in fair value in the convertible bond is determined using a binominal lattice model. The model produces an estimated fair value based on changes in the price of the underlying common stock over successive periods of time. In February 2022, the Company and Telcon agreed to settle a “target shortfall” under the revised API agreement with Telcon for the years ended 2020 and 2021 by exchanging KRW 3.5 billion, or approximately US$ 2.9 million, principal amount and accrued and unpaid interest of the Telcon convertible bond and KRW 400 million, or approximately US$ 310,000 , in cash proceeds of the convertible bond. As a result, the Company realized a net loss on investment convertible bond of $ 126,000 , which previously was classified as unrealized loss on debt securities available-for-sale in the other comprehensive loss, and other income of $ 41,000 . See Notes 6 and 11 for additional information on the “target shortfall.” The following table sets forth the fair value and changes in fair value of the investment in the Telcon convertible bond as of December 31, 2022 and 2021 (in thousands): Investment in convertible bonds December 31, 2022 December 31, 2021 Balance, beginning of period $ 26,100 $ 27,866 Sales of convertible bond ( 2,919 ) — Net loss on investment in convertible bond ( 126 ) — Change in fair value included in the statement of other comprehensive loss ( 3,084 ) ( 1,766 ) Balance, end of period $ 19,971 $ 26,100 The fair values as of December 31, 2022 and December 31, 2021 were based upon following assumptions: December 31, 2022 December 31, 2021 Principal outstanding (South Korean won) KRW 26.5 billion KRW 30 billion Stock price KRW 1,015 KRW 2,925 Expected life (in years) 7.79 8.79 Selected yield 13.50 % 10.50 % Expected volatility (Telcon common stock) 78.50 % 81.31 % Risk-free interest rate (South Korea government bond) 3.74 % 2.19 % Expected dividend yield 0.00 % 0.00 % Conversion price KRW 1,068 (US$ 0.85 ) KRW 2,847 (US$ 2.39 ) Equity method investment – During 2018, the Company and Japan Industrial Partners, Inc., or JIP, formed EJ Holdings Inc., or EJ Holdings, to acquire, own and operate an amino acids manufacturing facility in Ube, Japan. In connection with the formation, the Company invested approximately $ 32,000 in exchange for 40 % of EJ Holdings voting shares. JIP owns 60 % of EJ Holdings voting shares. In October 2018, the Company entered into a loan agreement with EJ Holdings under which the Company made an unsecured loan to EJ Holdings in the amount of $ 13.6 million. The loan proceeds were used by EJ Holdings to purchase the Ube facility in December 2019 and pay related taxes. The loan matures on September 30, 2028 and bears interest at the rate of 1 % payable annually. The parties also contemplated that the Ube facility will eventually supply the Company with the facility’s output of amino acids, that the operation of the facility would be principally for the Company’s benefit and, as such, that major decisions affecting EJ Holdings and the Ube facility would be made by EJ Holdings’ board of directors, a majority of which are representatives of JIP, in consultation with the Company. During the years ended December 31, 2022 and 2021, the Company made additional loans to EJ Holdings of $ 5.3 million and $ 6.3 million, respectively. As of December 31, 2022, and 2021, the loan receivables from EJ Holdings were approximately $ 25.0 million and $ 22.6 million, respectively as reflected in equity method investment on the consolidated balance sheets. EJ Holdings is engaged in seeking to refurbish and phase in the Ube facility with objective of eventually obtaining regulatory clearance for the manufacture of PGLG in accordance with cGMP. EJ Holdings has had no substantial revenues since its inception, has depended on loans from the Company to acquire the Ube facility and fund its operations and will continue to be dependent on loans from the Company or other financing unless and until its plant is activated and it can secure customers, including the Company, for its products. There is no assurance the Company can continue to provide needed funding EJ Holdings, or that needed funding will be available from other source. EJ Holdings has no commitments or understandings regarding any additional funding. If EJ Holdings fail to obtain needed funding, it may need to suspend activities at the Ube plant. Under the asset purchase agreement by which EJ Holdings purchased the Ube plant, the seller has the right to repurchase the plant at the purchase price, plus certain taxes, paid by EJ Holdings if the plant does not become operational within a reasonable period of time (not to exceed five years). In such event, it is likely that the Company would lose some or all of its investment. The Company has determined that EJ Holdings is a variable interest entity, or VIE, based upon its dependence on loan financing provided by the Company to acquire the Ube facility and to carry on EJ Holdings' activities and that the EJ Holdings’ activities, which are principally for the Company’s benefit. JIP, however, owns 60 % of EJ Holdings and is entitled to designate a majority of the directors of EJ Holdings as well as its Chief Executive Officer and outside auditors, and, as such, controls the management, business, and operations of EJ Holdings. Accordingly, the Company accounts for its variable interest in EJ Holdings under the equity method. The Company’s share of the losses reported by EJ Holdings are classified as net losses on equity method investment. The investment is evaluated for impairment if facts and circumstances indicate that the carrying value may not be recoverable, an impairment charge would be recorded. The following table sets forth certain unaudited financial information of EJ Holdings as of December 31, 2022 and 2021 and for the 12 months ended December 31, 2022 and 2021 (in thousands): As of December 31, 2022 2021 ASSETS Current assets $ 797 $ 505 Other assets 9,573 10,585 Total assets $ 10,370 $ 11,090 LIABILITIES Current liabilities $ 794 $ 931 Long-term liabilities 25,017 22,589 Total liabilities $ 25,811 $ 23,520 Noncontrolling interest $ ( 9,283 ) $ ( 7,458 ) Years Ended December 31, 2022 2021 Revenue, net $ 193 $ 234 Net loss $ ( 4,782 ) $ ( 6,833 ) |
SELECTED FINANCIAL STATEMENT LI
SELECTED FINANCIAL STATEMENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Payables And Accruals [Abstract] | |
SELECTED FINANCIAL STATEMENT LIABILITIES | NOTE 6—SELECTED FINANCIAL STATEMENT LIABILITIES Accounts payable and accrued expenses as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 December 31, 2021 Accounts payable: Clinical and regulatory expenses $ 361 $ 534 Professional fees 626 477 Selling expenses 1,363 932 Manufacturing costs 650 378 Non-employee board member compensation 484 136 Other vendors 301 262 Total accounts payable 3,785 2,719 Accrued interest payable, related parties 144 91 Accrued interest payable 2,381 579 Accrued expenses: Payroll expenses 1,263 1,097 Government rebates and other rebates 5,536 4,371 Other accrued expenses 440 332 Total accrued expenses 7,239 5,800 Total accounts payable and accrued expenses $ 13,549 $ 9,189 Other current liabilities consisted of the following (in thousands): As of December 31 2022 2021 Trade discount $ 1,200 $ 3,000 Unearned revenue 10,000 — Other current liabilities 1,717 1,404 Total other current liabilities $ 12,917 $ 4,404 Other long-term liabilities consisted of the following (in thousands): As of December 31 2022 2021 Trade discount $ 21,682 $ 23,148 Unearned revenue — 10,000 Other long-term liabilities 32 25 Total other long-term liabilities $ 21,714 $ 33,173 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 $ 0.6 million and $ 0.4 million of PGLG from Telcon during years ended December 31, 2022, and 2021, respectively, of which $ 644,000 and $ 382,000 were reflected in accounts payable and accrued expenses as of December 31, 2022 and 2021, 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 year ended December 31, 2022 of the target shortfall for 2021 and 2020 . |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7—NOTES PAYABLE Notes payable consisted of the following at December 31, 2022 and 2021 (in thousands except for conversion price and underlying shares) excluding the revolving line of credit agreement with related party discussed below: Year Interest Rate Term of Notes Conversion Principal Unamortized Discount December 31, 2022 Carrying Shares Notes payable 2013 10 % Due on demand — $ 763 $ — $ 763 — 2021 11 % Due on demand - 2 years — 2,843 — 2,843 — 2022 10 % - 28 % Due on demand - 15 months — 3,696 108 $ 3,588 $ 7,302 $ 108 $ 7,194 — Current $ 6,919 $ 105 $ 6,814 — Non-current $ 383 $ 3 $ 380 — 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 — 5,026 175 4,913 (c) — $ 5,826 $ 175 $ 5,713 — Current $ 2,305 $ — $ 2,367 — Non-current $ 3,521 $ 175 $ 3,346 — Convertible notes payable 2020 12 % 3 years $ 10.00 (a) 3,150 — 3,150 326,655 2021 2 % 3 years $ 0.37 (b) 14,140 2,635 11,505 41,318,094 $ 17,290 $ 2,635 $ 14,655 41,644,749 Current $ 17,290 $ 2,635 $ 14,655 41,644,749 Grand Total $ 30,418 $ 2,918 $ 27,562 41,644,749 Year Interest Rate Term of Notes Conversion Principal Unamortized Carrying Shares 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 12 % 3 years $ 10.00 (a) 3,150 — 3,150 316,756 2021 2 % 3 years $ 1.48 (b) 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 Grand 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 at December 31, 2022 . (c) Includes $ 62,000 of the fair value of embedded derivative. The weighted-average stated interest rate of notes payable was 8 % and 6 %, respectively, for the years ended December 31, 2022 and 2021. The weighted-average effective interest rate of notes payable for the years ended December 31, 2022 and 2021 was 20 % and 15 %, respectively, after giving effect to discounts relating to warrants, conversion features and deferred financing cost in connection with these notes. As of December 31, 2022, future contractual principal payments due on notes payable were as follows (in thousands): Year Ending 2023 26,514 2024 383 2025 — 2026 — 2027 3,521 Total $ 30,418 The Company is party to a revolving line of credit agreement with Yutaka Niihara., M.D., M.P.H., the Company’s Chairman and Chief Executive Officer. Under the agreement, at the Company’s request from time to time, Dr. Niihara may, but is not obligated to, loan or re-loan to the Company up to $ 1,000,000 . Outstanding amounts under the agreement are due and payable upon demand and bear interest, payable monthly, at a variable annual rate equal to the Prime Rate in effect from time to time plus 3 %. In addition to the payment of interest, the Company is obligated to pay Dr. Niihara a “tax gross-up” intended to make him whole for federal and state income and employment taxes payable by him with respect to interest and tax gross-up paid to him in the previous year. As of December 31, 2021, the outstanding principal balance under the agreement of $ 400,000 was reflected in revolving line of credit from related party on the consolidated balance sheets. As the revolving line of credit agreement was expired on November 22, 2022 , the Company paid outstanding principal balance of $ 400,000 and unpaid interest in December 2022. Refer to Note 12 for more related party information. On February 9, 2021, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue to the purchasers thereunder in a private placement pursuant to Rule 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D thereunder a total of up to $ 17 million in principal amount of convertible promissory notes of the Company for a purchase price equal to the principal amount thereof. The Company sold and issued approximately $ 14.5 million of the convertible promissory notes. 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 VWAP” (as defined) 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. As of December 31, 2022, the conversion price was $ 0.37 per share. The convertible promissory notes bear interest at the rate of 2 % per year, 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 redeemable in whole or in part at the election of the holders. The convertible promissory notes are general, unsecured obligations of the Company. The conversion feature of the convertible promissory 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. The following table sets forth the fair value of the conversion feature liability as of December 31, 2022 and December 31, 2021 (in thousands): Convertible promissory notes December 31, 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 ( 4,259 ) 1,913 Balance, end of period $ 3,248 $ 7,507 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. The fair value as of December 31, 2022 and December 31, 2021 was based on upon following assumptions: Convertible promissory notes December 31, 2022 December 31, 2021 Stock price $ 0.26 $ 1.67 Conversion price $ 0.37 $ 1.48 Select yield 27.50 % 21.99 % Expected volatility 50 % 50 % Time until maturity (in years) 1.16 2.16 Dividend yield — — Risk-free rate 4.68 % 0.77 % In June 2022, the Company entered into a Business Loan and Security Agreement and Addenda with a third-party lender pursuant to which the lender loaned the Company $ 1.8 million, which we refer to as the “loan amount,” of which we received net proceeds of approximately $ 1,666,000 after deduction of the lender’s origination fee but without deduction for other transaction expenses. The loan amount, together with interest of $ 738,000 , was payable over the 40-week loan term in weekly installments of $ 31,725 for the first eight weeks and $ 71,381 for the remaining 32 weeks. The loan amount and interest were prepayable by the Company at any time within 90 days from the disbursement date for a repayment amount of $ 2,250,000 , less all prior payments on the loan, unless an event of default has occurred under the Business Loan and Security Agreement. Repayment of the loan was secured by a security interest in all or substantially all our assets and all assets of our U.S. subsidiaries and was personally guaranteed by Yutaka Niihara, M.D., M.P.H., our Chairman and Chief Executive Officer and principal stockholder, and his wife and Hope Hospice International, Inc., which is wholly owned by Dr. Niihara and his wife. The personal guarantee was secured by a deed of trust on certain real property of Dr. Niihara and his wife. In August 2022, the Company repaid in full $ 1.6 million principal of the outstanding balance of the loan and recognized debt extinguishment loss of $ 422,000 . In July 2022, Dr. Niihara and his wife loaned the Company $ 370,000 , representing the net proceeds of personal loans to them from unaffiliated parties in the principal amount of $ 402,000 . The loan is due and payable in a lump sum on maturity on July 31, 2027 and bears interest at the rate of 12 % per annum, payable monthly in arrears. In connection with the loan, the Company granted Dr. Niihara a warrant as described in Note 8. The issuance cost of $ 32,000 and the fair value of warrant of $ 84,000 were treated as debt discount and will be amortized over the five-year term of the warrant using effective interest method. In August 2022, Dr. Niihara and his wife loaned the Company $ 1,576,574 , representing the net proceeds of personal loans to them from unaffiliated third parties in the principal amount of $ 1,668,751 , as well as $ 250,000 from personal funds. The loans are evidenced by promissory notes, which are due and payable in a lump sum on maturity on August 16, 2027 and bear interest at the rate of 10 % per annum, payable monthly in arrears. The foregoing loans were in addition to a $ 50,000 loan to us from Hope International Hospice, Inc., an affiliate of Dr. and Mrs. Niihara, on August 15, 2022, which is evidenced by a demand promissory note of the Company bearing interest at the rate of 10 % per annum. The proceeds of the loans were used to prepay $ 1,924,819 indebtedness of the Company under the Business Loan and Security Agreement referred to above. In September 2022, Seah Lim, M.D., Ph.D. loaned the Company $ 1.2 million, the proceeds of which were used to augment the Company’s working capital. The principal amount of the loan and interest thereon at the rate of 6 % per annum, together with 240,000 shares of the Company’s common stock, is due and payable in lump sum on maturity in September 2025 . In October 2022, Dr. Lim was appointed as a director of the Company. In accordance with ACS 815, the Company accounted for the right to receive shares as a bifurcated embedded derivative and the embedded derivative is measured at fair value at the inception and subsequently measured at fair value with changes in fair value recognized in income statements. The fair values of the embedded derivatives at the inception were $ 68,000 at inception and $ 62,000 as of December 31, 2022. In July 2022, Emmaus Medical, Inc., or Emmaus Medical, an indirect wholly owned subsidiary of the Company, entered into a Standard Merchant Cash Advance Agreement with a third party pursuant to which it sold $ 816,000 of accounts receivable (the “Receivables Purchased Amount”) in exchange for net proceeds of $ 516,000 . Under the agreement, the third party is entitled to collect a specified percentage of all accounts receivable of Emmaus Medical, not to exceed $ 34,000 weekly, until the third party receives total proceeds equal to the Receivables Purchased Amount. In September 2022, Emmaus Medical and the third party entered into a similar agreement pursuant to which Emmaus Medical sold $ 694,960 of accounts receivable (the “Receivables Purchased Amount”) for net proceeds of $ 500,000 . Under the agreement, the third party is entitled to collect a specified percentage of all accounts receivable of Emmaus Medical, not to exceed $ 25,969 weekly, until the third party receives total proceeds equal to the Receivables Purchased Amount. Emmaus Medical’s obligations under the two agreements are guaranteed by the Emmaus Life Sciences, Inc. Company and its U.S. subsidiaries, and the obligations of Emmaus Medical and the guarantors are secured by a security interest in all or substantially all the assets of Emmaus Life Sciences and its U.S. subsidiaries. In December 2022, both loans were repaid in full and recognized debt extinguishment loss of $ 79,000 as the Company entered into another agreement discussed below. In December 2022, the Company entered an Agreement for the Purchase and Sales of Future Receipts with a third party pursuant to which it sells $ 3,105,000 of future receipts (the "Purchased Amount") in exchange for net proceeds of $ 2,300,000 . Under the agreement, the Company agrees to pay $ 103,500 on a semi-monthly until the Purchased Amount is delivered. The portion of proceeds were used to prepay indebtedness of the Company under the Standard Merchant Cash Advance Agreements referred to above. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 8—STOCKHOLDERS’ DEFICIT Purchase agreement with Holder of a Convertible Promissory Note — On June 15, 2020, the holder of a convertible promissory note in the principal amount of $ 3,150,000 agreed to an extension of the maturity date to June 15, 2023 in exchange for an increase in the interest rate on the note from 11 % to 12 %. In conjunction with the amendment, the Company issued to the note holder five-year warrants to purchase a total of up to 1,250,000 shares of the Company common stock at an exercise price of $ 2.05 a share. The modification of debt was considered debt extinguishment and a $ 1.4 million loss on debt extinguishment was recognized in the consolidated statements of operation and comprehensive loss. Under ASC 815-40, the Company concluded that the related warrants should be recognized at fair value as a liability. The warrant liability is remeasured at fair value on a recurring basis using Level 3 input and any changes in the fair value of liability is recorded in earnings. Since the loan was no t repaid before June 15, 2022, the number of warrant shares became fixed per the warrant terms and the warrant was reclassified as equity. The following table presents the change in fair value of the warrants as of June 15, 2022 and 2021 (in thousands): Warrant liability— Convertible Promissory Note June 15, 2022 December 31, 2021 Balance, beginning of period $ 1,463 $ 988 Change in fair value included in the statement of operations ( 1,250 ) 475 Reclassification to equity ( 213 ) — Balance, end of period $ — $ 1,463 The fair value of the warrant derivative liabilities was determined using the Black-Scholes Merton model and was based upon following assumptions: June 15, 2022 December 31, 2021 Exercise price $ 2.05 $ 2.05 Stock price $ 0.36 $ 1.67 Risk‑free interest rate 3.35 % 1.04 % Expected volatility (peer group) 126.00 % 117.00 % Expected life (in years) 3.00 3.46 Expected dividend yield — — Number outstanding 1,250,000 1,250,000 A summary of the Company’s warrants activity for the years ended December 31, 2022 and 2021 is presented below: December 31, 2022 December 31, 2021 Number of Warrants Weighted Number of Warrants Weighted Warrants outstanding, beginning of period 8,236,017 $ 5.78 8,439,480 $ 6.09 Granted 500,000 $ 2.50 — $ — Exercised — $ — — $ — Cancelled, forfeited and expired ( 2,125,497 ) $ 14.38 ( 203,463 ) $ 4.36 Warrants outstanding, end of period 6,610,520 $ 2.22 8,236,017 $ 5.78 Warrant exercisable, end of period 6,610,520 $ 2.22 7,486,017 $ 6.12 Warrants — In September 2022, in connection with the loans from Dr. Niihara and his wife, the Company granted Dr. Niihara a five-year warrant to purchase up to 500,000 shares of common stock of the Company at an exercise price of $ 2.50 per share. Under ASC 480-10 and ASC 815, the warrant is classified as a liability. The fair value of the warrant liability was determined using Black-Scholes Merton model and the fair value of the warrant was $ 70,000 as of December 31, 2022. The change in fair value was recorded in the consolidated statements of operations. For the year ended December 31, 2022, the change in fair value of warrant liability was $ 14,000 . As of December 31, 2022, the weighted-average remaining contractual life of outstanding warrants was 2.1 years. Stock options — Upon completion of the Merger, the EMI Holding Amended and Restated 2011 Stock Incentive Plan was assumed by the Company. The 2011 Stock Incentive Plan permits grants of incentive stock options to employees, including executive officers, and other share-based awards such as stock appreciation rights, restricted stock, stock units, stock bonus and unrestricted stock awards to employees, directors, and consultants for up to 9,000,000 shares of common stock. Options granted under the 2011 Stock Incentive Plan expire ten years after grant. Options granted to directors vest in quarterly installments and all other option grants vest over a minimum period of three years , in each case, subject to continuous service with the Company. Each stock option outstanding under the 2011 Stock Incentive Plan at the effective time of the Merger was automatically converted into a stock option exercisable for a number of shares of the Company’s common stock and at an exercise price calculated based on the exchange ratios in the Merger. The 2011 Stock Incentive Plan expired in May 2021, after which no further awards may be made under the plan. The Company also had an Amended and Restated 2012 Omnibus Incentive Compensation Plan under which the Company may grant incentive stock options to selected employees including officers, non-employee consultants and non-employee directors. The Plan was terminated in September 2021. On September 29, 2021, the Board of Directors of the Company adopted the Emmaus Life Sciences, Inc. 2021 Stock Incentive Plan upon the recommendation of the Compensation Committee of the Board. The 2021 Stock Incentive Plan was approved by stockholders on November 23, 2021. No more than 4,000,000 shares of common stock may be issued pursuant to awards under the 2021 Stock Incentive Plan. The number of shares available for Awards, as well as the terms of outstanding awards, is subject to adjustment as provided in the Stock Incentive Plan for stock splits, stock dividends, reverse stock splits, recapitalizations and other similar events. As of December 31, 2022 and December 31, 2021, no awards were outstanding under the 2021 Stock Incentive Plan. Management has valued stock options at their date of grant utilizing the Black‑Scholes‑Merton Option pricing model. The fair value of the underlying shares was determined by the market value of stock of similar companies and recent arm’s length transactions involving the sale of the Company’s common stock. Prior the Merger, the Company lacked company-specific historical and implied volatility information for its common stock. Therefore, the expected volatility was calculated using the historical volatility of a comparative public traded companies. The following table presents the assumptions used on recent dates on which options were granted by the Company. 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. A summary of the Company’s stock option activity for the years ended December 31, 2022 and 2021 is presented below : December 31, 2022 December 31, 2021 Number of Weighted‑ Number of Weighted‑ Options outstanding, beginning of period 5,968,338 $ 4.78 7,110,025 $ 4.63 Granted or deemed issued — $ — — $ — Exercised — $ — — $ — Cancelled, forfeited and expired ( 1,307,551 ) $ 3.73 ( 1,141,687 ) $ 3.82 Options outstanding, end of period 4,660,787 $ 5.08 5,968,338 $ 4.78 Options exercisable at end of year 4,645,286 $ 5.10 5,937,837 $ 4.80 Options available for future grant 4,000,000 4,000,000 During the years ended December 31, 2022 and 2021, the Company recognized $ 16,000 and $ 553,000 , respectively, of share‑based compensation expense. As of December 31, 2022, there was approximately $ 5,000 of total unrecognized compensation cost related to unvested share‑based compensation awards outstanding under the EMI Amended and Restated 2011 Stock Incentive Plan. That cost is expected to be recognized over the weighted-average remaining period of 0.5 years. Collaborative Research and Development Agreement with Kainos Medicine, Inc —On February 26, 2021, the Company entered into a collaborative and research and development agreement with Kainos Medicine, Inc. (“Kainos”) to lead the preclinical development of Kainos’ patented IRAK4 inhibitor (“KM10544”) as an anti-cancer drug and further advance the research and development activity currently underway at Kainos. The companies also entered into a letter of intent regarding possible future joint development of small molecule therapeutics and other pharmaceutical assets. Pursuant to the agreement, the Company paid and issued to Kainos $ 500,000 in cash and 324,675 shares of common stock of the Company equivalent to $ 500,000 in additional consideration, which were recorded as research and development expenses in the consolidated statements of operations and comprehensive loss. The Company, in turn, has been granted rights of first negotiation and first refusal for an exclusive license regarding the development and commercialization of products based on the intellectual property resulting from the agreement. On October 7, 2021, the Company entered into a License Agreement, with Kainos under which Kainos granted the Company an exclusive license in the territory encompassing the U.S., the U.K. and the EU to patent rights, know-how and other intellectual property relating to Kainos’s novel IRAK4 inhibitor, referred to as KM10544, for the treatment of cancers, including leukemia, lymphoma and solid tumor cancers. In consideration of the license, the Company paid Kainos a six-figure upfront fee in cash and agreed to make additional cash payments upon the achievement of specified milestones totaling in the mid-eight figures and pay a single-digit percentage royalty based on net sales of the licensed products and a similar percentage of any sublicensing consideration. During the year ended December 31, 2021, the Company incurred $ 1.5 million of research and development expenses related to the Kainos collaboration and license arrangements. During the year ended December 31, 2022, t he Company incurred no such expenses. Amended and Restated Warrants – The Company evaluated its outstanding amended and restated warrants to purchase up to 4,038,200 shares of common stock under ASC 815-40 and concluded that the warrants should be accounted for as equity. In June 2022, the exercise price of outstanding amended and restated warrants was reduced to $ 0.446 per share pursuant to the anti-dilution adjustment provisions of the warrants triggered by the Company’s issuance of restricted shares of common stock for professional relations and consulting services discussed below. The warrants were valued using the Black-Scholes Merton model and the $ 446,000 change in fair value was recorded as additional paid-in capital and accumulated deficit. Stock issued for services – In June 2022, the Company issued 246,637 shares of restricted share of common stock, with an estimated fair value of $ 110,000 for professional relations and consulting services to be rendered over the six-month period beginning July 1, 2022. The value of the shares issued in connection with this agreement was recorded in prepaid expenses at inception and was fully amortized for the year ended December 31, 2022. In December 2022, the Company issued 25,000 shares of restricted shares of common stock, with an estimated fair value of $ 9,000 for sales consulting services and professional services rendered. The value of the shares issued in connection with this agreement was recorded in sales and general and administrative expenses in the consolidated statements of operations. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9—INCOME TAXES The provision for income taxes consists of the following for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Current U.S. $ 30 $ 25 International 30 — Deferred U.S. — — International — — $ 60 $ 25 Deferred tax assets consisted of the following as of December 31, 2022 and 2021 (in thousands): 2022 2021 Net operating loss carryforward $ 17,978 $ 17,019 General business tax credit 11,837 11,393 Stock options 6,149 5,955 Charitable contribution 37 36 Accrued expenses 380 292 Unearned revenue 2,472 2,393 Allowance for bad debt 442 167 Unrealized gain on foreign exchange translation and others 789 133 Section 174 Expenditures 292 — Unrealized gain/ (loss) on LT investment 33 Other 4,130 3,188 Total gross deferred tax assets 44,539 40,576 Less valuation allowance ( 44,112 ) ( 40,147 ) Net deferred tax assets $ 427 $ 429 Deferred tax liabilities consisted of the following as of December 31, 2022 and 2021 (in thousands): 2022 2021 Unrealized gain on available-for-sale securities $ ( 426 ) $ ( 427 ) Other ( 1 ) ( 2 ) Total deferred tax liabilities $ ( 427 ) $ ( 429 ) A valuation allowance for the net deferred tax assets is recorded when it is more likely than not that the Company will not realize these assets through future operations. The valuation allowance increased by approximately $ 4.0 million and $ 2.7 million for the years ended December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022 and December 31, 2021, the Company had net operating loss carryforwards for federal income tax purposes of approximately $ 66.4 million and $ 62.6 million, respectively, available to offset future federal taxable i ncome, if any. Net operating loss generated in 2017 and prior years expire in various years through 2037 . Net operating losses for federal income tax purpose generated in 2018 and after will be available indefinitely. In addition, the Company had net operating loss carryforwards for state income tax purposes of approximately $ 61.2 million and $ 57.8 million respectively, which expire in various years through 2042 . As of December 31, 2022 and December 31, 2021, the Company has general business tax credits of $ 11.8 million and $ 11.4 million, respectively, for federal income tax purposes. The tax credits are available to offset future tax liabilities, if any, through 2042 . The Company’s utilization of net operating loss carryforwards could be subject to an annual limitation as a result of certain past or future events, such as stock sales or other equity events constituting a “change in ownership” under the provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations could result in the expiration of net operating loss carryforwards and tax credits before they can be utilized. The income tax provision differs from that computed using the statutory federal tax rate of 21 % due to the following factors (in thousands): 2022 2021 Tax benefit at statutory federal rate $ ( 2,242 ) $ ( 3,359 ) State taxes, net of federal tax benefit ( 453 ) ( 275 ) Increase (decreases) in valuation allowance 3,964 2,722 Permanent items ( 384 ) 1,337 General business tax credit ( 450 ) ( 902 ) Other ( 375 ) 502 $ 60 $ 25 As of December 31, 2022 and December 31, 2021, the Company had no unrecognized tax benefits or position which, in the opinion of management, would be reversed if challenged by a taxing authority. In the event the Company is assessed interest or penalties, such amounts would be classified as income tax ex pense. As of December 31, 2022, all federal tax returns since 2019 are subject to audit. The expiration of the state returns varies by state, but the 2018 and subsequent years’ returns generally are subject to audit. No tax returns are currently being examined by taxing authorities. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 10—LEASES Operating leases — During the years ended December 31, 2022 and 2021, the Company leased its office space under operating leases with unrelated entities. The Company leased 21,293 square feet of office space for its headquarters in Torrance, California, at a base rental of $ 84,272 per month, which lease will expire on September 30, 2026 . In addition, the Company leases 1,163 square feet of office space in Dubai, United Arb Emirates, which lease will expire on June 19, 2023 . During the year ended December 31, 2022, the Company terminated leases of office space in New York, New York and Tokyo, Japan. Upon termination of New York lease, the Company recognized $ 31,000 of loss on leased assets. Rent expense was $ 1.1 million and $ 1.2 million for the years ended December 31, 2022 and 2021, respectively. Future minimum lease payments were as follows as of December 31, 2022 (in thousands): Amount 2023 1,049 2024 1,063 2025 1,092 2026 and thereafter 836 Total lease payments 4,040 Less: Interest ( 784 ) Operating lease liabilities $ 3,256 As of December 31, 2022 and 2021, the Company had an operating lease right-of-use asset of $ 2.8 million and $ 3.5 million, respectively and lease liability of $ 3.3 million and $ 4.0 million, respectively. The weighted average remaining term of the Company’s leases as of December 31, 2022 was 3.7 years and the weighted-average discount rate was 12.9 %. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11—COMMITMENTS AND CONTINGENCIES API Supply Agreement — On June 12, 2017, the Company entered into an API Supply Agreement (the “API Agreement”) with Telcon pursuant to which Telcon paid the Company approximately $ 31.8 million in consideration of the right to supply 25 % of the Company’s requirements for bulk containers of PGLG for a fifteen-year term. The amount was recorded as deferred trade discount. On July 12, 2017, the Company entered into a raw material supply agreement with Telcon which revised certain terms of the API supply agreement (the “revised API agreement”). The revised API agreement is effective for a term of five years and will renew automatically for 10 successive one-year renewal periods, except as either party may determine. In the revised API agreement, the Company has agreed to purchase a cumulative total of $ 47.0 million of PGLG over the term of the agreement. 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, Telcon may be entitled to payment of the shortfall or to offset the shortfall against the Telcon convertible bond and proceeds there of that are pledged as a collateral to secure our obligations. In September 2018, the Company entered into an agreement with Ajinomoto and Telcon to facilitate Telcon’s purchase of PGLG from Ajinomoto for resale to the Company under the revised API agreement. The PGLG raw material purchased from Telcon is recorded in inventory at net realizable value and the excess purchase price is recorded against deferred trade discount. Refer to Notes 5 and 6 for more information. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12—RELATED PARTY TRANSACTIONS The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2022 (in thousands except for conversion rate and share information): Class Lender Interest Date of Term of Loan Principal Amount Outstanding December 31, 2022 Highest Amount of Amount of Current, Promissory note payable to related parties: Willis Lee(2) 12 % 10/29/2020 Due on Demand 100 100 — — Soomi Niihara(1) 12 % 12/7/2021 Due on Demand 700 700 — — Soomi Niihara(1) 12 % 1/18/2022 Due on Demand — 300 300 32 Yasushi Nagasaki(2) 10 % 2/9/2022 Due on Demand — 50 50 4 Hope International Hospice, Inc.(1) 10 % 2/9/2022 Due on Demand 350 350 — — Hope International Hospice, Inc.(1) 10 % 2/15/2022 Due on Demand 210 210 — — Soomi Niihara(1) 10 % 2/15/2022 Due on Demand 100 100 — — George Sekulich(2) 10 % 2/16/2022 Due on Demand — 26 26 2 Soomi Niihara(1) 10 % 3/7/2022 Due on Demand — 200 200 15 Hope International Hospice, Inc.(1) 12 % 3/15/2022 Due on Demand 150 150 — — Hope International Hospice, Inc.(1) 12 % 3/30/2022 Due on Demand 150 150 — — Wei Peu Derek Zen(2) 10 % 3/31/2022 Due on Demand 200 200 — — Willis Lee(2) 10 % 4/14/2022 Due on Demand 45 45 — — Hope International Hospice, Inc.(1) 10 % 5/25/2022 Due on Demand 40 40 — — Yutaka and Soomi Niihara(1) 12 % 7/27/2022 5 years 402 402 — 20 Hope International Hospice, Inc.(1) 10 % 8/15/2022 Due on Demand 50 50 — — Yutaka and Soomi Niihara(1) 10 % 8/16/2022 5 years 250 250 — 8 Yutaka and Soomi Niihara(1) 10 % 8/16/2022 5 years 1,669 1,669 — 56 Hope International Hospice, Inc.(1) 10 % 8/17/2022 Due on Demand 50 50 — — Yutaka and Soomi Niihara(1) 10 % 8/17/2022 Due on Demand 60 60 — — Seah Lim(2) 6 % 9/16/2022 3 years 1,200 1,200 — — Hope International Hospice, Inc. 10 % 10/20/2022 Due on Demand 100 100 — — Subtotal $ 5,826 $ 6,402 $ 576 $ 137 Revolving line of credit agreement Yutaka Niihara(2) 5.25 % (3) 12/27/2019 Due on Demand — 400 — 110 Subtotal $ — $ 400 $ — $ 110 Total $ 5,826 $ 6,802 $ 576 $ 247 The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2021 (in thousands except for conversion rate and share information): Class Lender Interest Date of Term of Loan Principal Amount Outstanding December 31, 2021 Highest Amount of Amount of Current, Promissory note payable to related parties: Willis Lee (2) 12 % 10/29/2020 Due on Demand $ 100 $ 100 $ — $ — Soomi Niihara (1) 12 % 1/20/2021 Due on Demand — 700 700 13 Soomi Niihara (1) 12 % 9/15/2021 Due on Demand — 300 300 3 Soomi Niihara (1) 12 % 12/7/2021 Due on Demand 700 700 — — Subtotal $ 800 $ 1,800 $ 1,000 $ 16 Revolving line of credit Yutaka Niihara (1) 5.25 % 12/27/2019 Due on Demand 400 800 400 35 Subtotal 400 800 400 35 Total $ 1,200 $ 2,600 $ 1,400 $ 51 (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also a director and the Chief Executive Officer of Hope International Hospice, Inc. (2) Officer or director. (3) The rate varies with changes in the prime rate and does not give effect to the “tax gross-up” described in Note 7. See Note 7 for a discussion of the Company’s revolving line of credit agreement with Dr. Niihara and Note 8 for a discussion of the amendment to the previously issued warrant to Dr. Niihara. See Notes 6 and 11 for a discussion of the Company’s distribution and supply agreements with Telcon, which holds 4,147,491 shares of the Company common stock, or approximately 8.4 % of the common stock outstanding as of December 31, 2022. The Company holds a convertible bond of Telcon in the principal amount of KRW 26.5 billion, or approximately $ 21.0 million as of December 31, 2022 which matures on October 16, 2030 and bears interest at 2.1 % a year, payable quarterly. See Note 5 for more information regarding the convertible bond. |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2022 | |
Compensation And Retirement Disclosure [Abstract] | |
DEFINED CONTRIBUTION PLAN | NOTE 13—DEFINED CONTRIBUTION PLAN The Company has a defined contribution plan (the “401(k) Plan”) covering substantially all the Company’s employees. The Emmaus 401(k) Plan is a tax-qualified retirement saving plan, pursuant to which covered employees are able to contribute the lesser of 90 % of their eligible annual compensation or the limit prescribed by the Internal Revenue Service (the “IRS”) to the 401(k) Plan on a before-tax basis. Since January 1, 2020, the Company has matched 50 % of employee contributions to the Company’s 401(k) Plan based on each participant’s contribution during the plan year up to 4.0 % of each participant’s annual compensation. For the years ended December 31, 2022 and 2021, the Company made matching contributions to the Company’s 401(k) Plan of $ 74,000 and $ 91,000 , respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14—SUBSEQUENT EVENTS Subsequent to December 31, 2022, the Company received net proceeds of $ 1.0 million in exchange for the issuance of a convertible promissory note in like amount to a related party, $ 227,000 of net proceeds from related party loans and $ 500,000 of net proceeds from third party loans. In addition, the Company’s Emmaus Medical, Inc. subsidiary received net proceeds of $ 984,125 from its sale and assignment to third parties of a total of $ 1,400,424 of future receipts. The net proceeds from these transactions have been or will be used to augment the Company’s working capital and for general corporate purposes. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation —The accompanying consolidated financial statements have been prepared in accordance with GAAP codified in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Going concern | Going concern — The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. The Company incurred a net loss of $ 10.6 million for the year ended December 31, 2022 and had a working capital deficit of $ 48.0 million as of December 31, 2022. Management expects that the Company's current liabilities, operating losses and expected capital needs, including the expected costs relating to the commercialization of Endari® in the Middle East North Africa region and elsewhere and continued funding of EJ Holdings, will exceed its existing cash balances and cash expected to be generated from operations for the foreseeable future. In order to meet the Company’s current liabilities and future obligations, the Company will need to restructure or refinance its existing indebtedness and raise additional funds through related-party loans, third-party loans, equity and debt financings or licensing or other strategic agreements. The Company has no understanding or arrangement for any additional financing, and there can be no assurance that the Company will be able to obtain additional related-party or third-party loans or complete any additional equity or debt financings on favorable terms, or at all, or enter into licensing or other strategic arrangements. Due to the uncertainty of the Company’s ability to meet its current liability and operating expenses, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months from the date of this filing. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Principles of consolidation | Principles of consolidation —The consolidated financial statements include the accounts of the Company and EMI Holding subsidiary and EMI Holding’s wholly‑owned subsidiary, Emmaus Medical Inc., and Emmaus Medical, Inc’s wholly‑owned subsidiaries. All significant intercompany transactions have been eliminated. |
Estimates | Estimates —Financial statements prepared in accordance with GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include those relating to revenue recognition on product sales, the estimated useful lives of equipment, impairment of assets, the variables used to calculate the valuation of conversion features, stock options and warrants, and estimated accruals on an ongoing basis. The Company bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates under different assumptions or conditions. To the extent there are material differences between these estimates and actual results, the Company’s financial statements will be affected. |
Revenue recognition | Revenue recognition — The Company realizes net revenues primarily from sales of Endari® to distributors and specialty pharmacy providers. Distributors resell Endari® to other pharmacy and specialty pharmacy providers, health care providers, hospitals, and clinics. In addition to agreements with these distributors, the Company has contractual arrangements with specialty pharmacy providers, in-office dispensing providers, physician group purchasing organizations, pharmacy benefits managers and government entities that provide for government-mandated or privately negotiated rebates, chargebacks and discounts with respect to the purchase of Endari®. These various discounts, rebates, and chargebacks are referred to as “variable consideration.” Revenue from product sales is recorded net of variable consideration. Under ASC 606 Revenue from Contracts with Customers , the Company recognizes revenue when its customers obtain control of the Company's product, which typically occurs on delivery. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for the product, or transaction price. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company performs the following 5 steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the Company’s performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the relevant performance obligations. Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of sales discounts, returns, government rebates, chargebacks and commercial discounts. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible transaction prices. Actual variable consideration may differ from the Company's estimates. If actual results vary from the Company's estimates, the Company adjusts the variable consideration in the period such variances become known, which would affect net revenues in that period. The following are our significant categories of variable consideration: Sales Discounts : The Company provides its customers prompt payment discounts and from time to time offers additional discounts for bulk orders that are recorded as a reduction of revenues in the period the revenues are recognized. Product Returns : The Company offers distributors a right to return product purchased principally based upon (i) overstocks, (ii) inactive product or non-moving product due to market conditions, and (iii) expired products. Product return allowances are estimated and recorded at the time of sale. Government Rebates : The Company is subject to discount obligations under state Medicaid programs and the Medicare Part D prescription drug coverage gap program. Management estimates Medicaid and Medicare Part D prescription drug coverage gap rebates based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenues are recognized, resulting in a reduction of product revenues and the establishment of a current liability that is included as an accounts payable and accrued expenses in the consolidated balance sheets. The liability for these rebates consists primarily of estimates of claims expected to be received in future periods related to recognized revenues. Chargebacks and Discounts : Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to certain specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities at prices lower than the list prices charged to distributors. The distributors charge the Company for the difference between what they pay for the products and the Company’s contracted selling price to these specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities. In addition, the Company has contractual agreements with pharmacy benefit managers who charge us for rebates and administrative fee in connection with the utilization of product. These reserves are established in the same period that the related revenues are recognized, resulting in a reduction of revenues. Chargeback amounts are generally determined at the time of resale of products by the distributors. |
Leases | Leases — In accordance with ASC 842 Leases , the Company determines whether an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use assets and operating lease liabilities are recognized based on the present value of remaining lease payments over the lease term. When the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term. Variable lease costs such as common area costs and other operating costs are expensed as incurred. For all lease agreements, lease and non-lease components are combined. No right-of-use asset and related lease liability are recorded for leases with an initial term of 12 months or less. |
Cash and cash equivalents | Cash and cash equivalents —Cash and cash equivalents include short‑term securities, if any, with original maturities of less than ninety days. The Company maintains its cash and cash equivalents at insured financial institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss due to uninsured deposit is minimal. |
Accounts Receivable | Accounts receivable — Accounts receivables are primarily attributable to product sales to customers. The Company makes judgements as to its ability to collect outstanding receivables and provides an allowance for receivables if and when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the quality and age of those invoices. The Company believes the credit risks associated with its customers are not significant. |
Factoring accounts receivable | Factoring accounts receivable — Emmaus Medical, Inc., or Emmaus Medical, the Company’s indirect wholly owned subsidiary, entered into a purchase and sales agreement with Prestige Capital Finance, LLC or Prestige Capital, pursuant to which Emmaus Medical may offer and sell to Prestige Capital from time to time eligible accounts receivable in exchange for Prestige Capital’s down payment, or advance, to Emmaus Medical of 75 % of the face amount of the accounts receivable, subject to a $ 7.5 million cap on advances at any time. The balance of the face amount of the accounts receivables will be reserved by Prestige Capital and paid to Emmaus Medical, less discount fees of Prestige Capital ranging from 2.25 % to 7.25 % of the face amount, as and when Prestige Capital collects the entire face amount of the accounts receivable. Emmaus Medical’s obligations to Prestige Capital under the purchase and sale agreement are secured by a security interest in the accounts receivable and all or substantially all other assets of Emmaus Medical. In connection with the purchase and sale agreement, Emmaus guarantees Emmaus Medical’s obligations under the purchase and sale agreement. At December 31, 2022 and 2021, accounts receivable included approximately $ 730,000 and $ 587,000 of factored accounts receivable, respectively, and other current liabilities included approximately $ 55,000 and $ 12,000 of liabilities from factoring, respectively. For years ended December 31, 2022 and 2021, the Company incurred approximately $ 473,000 and $ 317,000 , respectively, of factoring fees included in general and administrative expenses. |
Inventories | Inventories —Inventories consist of raw materials, finished goods and work-in-process and are valued on a first‑in, first‑out basis at the lesser of cost or net realizable value. Work‑in‑process inventories consist of L‑glutamine for the Company’s products that has not yet been packaged and labeled for sale. Substantially all raw materials purchase during the years ended December 31, 2022 and 2021 were supplied, directly or indirectly by one supplier. Inventories are presented net of reserves totaling $ 5.0 million and $ 3.4 million as of December 31, 2022 and 2021, respectively. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets — Prepaid expenses and other current assets consist primarily of cost paid for future services or refunds from vendors which will occur within a year. Prepaid expenses include prepayment in insurance, subscription services, consulting and other services which are being amortized over the contract terms or recognized upon services are performed. |
Property and equipment | Property and equipment — Equipment, Furniture and fixtures are recorded at historical cost and amortized on a straight‑line basis over their estimated useful lives of five to seven years . Leasehold improvements are recorded at historical cost and amortized on a straight‑line basis over the shorter of their estimated useful lives or the lease terms. Maintenance and repairs are expensed as incurred, while major additions and improvements are capitalized. Gains and losses on disposition are included in other income (expenses), if any. |
Impairment of long-lived assets | Impairment of long‑lived assets —The Company evaluates the carrying value of its long‑lived assets for impairment whenever events or changes in circumstances indicate that such carrying values may not be recoverable. The Management uses its best judgment based on the current facts and circumstances relating to the Company’s business when determining whether any significant impairment factors exist. If the Company determines that the carrying values of long‑lived assets may not be recoverable based upon the existence of one or more indicators of impairment, the Company performs an undiscounted cash flow analysis to determine if impairment exists. If impairment exists, the Company measures the impairment based on the difference between the asset’s carrying amount and its fair value, and the impairment is reflected in the consolidated statement of operations in the period in which the long‑lived asset impairment is determined to have occurred. No impairment existed as of December 31, 2022 and 2021 . |
Research and development | Research and development —Research and development consists of expenditures for the research and development of the Company’s products and product candidates, which primarily involve contract research, payroll‑related expenses and other related supplies. Research and development costs are expensed as incurred. |
Share-based compensation | Share‑based compensation —The Company recognizes compensation cost for share‑based compensation awards over the service term of the recipients of the share‑based awards. The fair value of share‑based compensation is calculated using the Black‑Scholes‑Merton pricing model. The Black‑Scholes‑Merton model requires subjective assumptions regarding future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of awards granted is calculated using the simplified method allowed under the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin Nos. 107 and 110. The risk‑free rate selected to value any grant is based on the U.S. Treasury rate on the grant date that corresponds to the expected term of the award. |
Income taxes | Income taxes —The Company accounts for income taxes under the asset and liability method, wherein deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through the generation of future taxable income for the related jurisdictions. When tax returns are filed, it is highly probable that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more‑likely‑than‑not recognition threshold are recorded at the largest amount of tax benefit that is more than 50 percent likely of being realized upon examination by the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. As of December 31, 2022 and 2021, the Company had no unrecognized tax benefits and no positions which, in the opinion of management, would be reversed if challenged by a taxing authority. In the event the Company is assessed interest or penalties, such amounts will be classified as income tax expense in the financial statements. |
Comprehensive loss | Comprehensive loss —Comprehensive loss includes net loss and other comprehensive loss relating to foreign translation adjustments of the Company’s subsidiaries and the changes in fair value of investment in convertible bond classified as available for sale. |
Equity method investment | Equity method investment – The Company owns 40 % of the capital shares of EJ Holdings. A variable interest entity (“VIE”) such as EJ Holdings is to be consolidated by its primary beneficiary if the beneficiary has both a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company determined that it does not meet the power criterion for consolidating EJ Holdings and, accordingly, accounts for its variable interest in EJ Holdings under the equity method. |
Investment in convertible bond | Investment in convertible bond – The Company has elected the fair value option measuring its investment in convertible bond. The convertible bond is classified as available for sale and the changes in fair value are reported in other comprehensive loss for each reporting period. |
Foreign currency translation | Foreign currency translation —The Company’s reporting currency is the U.S. dollar. The functional currencies of its foreign subsidiaries are the primary currencies within the counties in which they operate. Assets and liabilities of their operations are translated into U.S. dollars at period‑end exchange rates, and revenues, if any, and expenses are translated into U.S. dollars at average exchange rates in effect during each reporting period. Adjustments resulting from the translation are reported in other comprehensive loss. |
Financial Instruments | Financial instruments —Financial instruments included in the financial statements are comprised of cash and cash equivalents, investment in convertible bond, accounts receivable, warrant derivative liabilities, accounts payable, certain accrued liabilities, convertible notes payable, notes payable, conversion feature liabilities and other contingent liabilities. |
Fair value measurements | Fair value measurements —The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in accordance with ASC 820. The Company measures fair value under a framework that provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2: Inputs to the valuation methodology include: Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; and Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 inputs must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value measurement level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying values of cash and cash equivalents, accounts receivables, other current assets, account payable and accrued expenses, other current liabilities and revolving line of credit approximate fair value due to the short-term maturity of those instruments. The fair value of the Company's convertible debt instruments was determined based on Level 2 inputs. The carrying value of the debt was discounted based on allocating proceeds to other financial instruments within the arrangement as discussed in Note 7. Certain outstanding warrants contain price adjustment provisions and, consequently, are accounted for as liabilities that are remeasured at fair value on a recurring basis using Level 3 inputs. The level 3 inputs in the valuation of the warrants include expected term and expected volatility as discussed in Note 8. There are no other assets or liabilities measured at fair value on a recurring basis. |
Net loss per share | Net loss per share —In accordance with ASC 260, “Earnings per Share, ” the basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. Dilutive net loss per share is computed in a similar manner, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of December 31, 2022 and 2021, there were 52,338,872 shares and 23,310,698 shares, respectively, of potentially dilutive securities outstanding. None of the potentially dilutive securities were included in the calculation of diluted loss per share since their effect would be anti‑dilutive for both periods presented. |
Segment reporting | Segment reporting —The Company operates in one reportable segment. |
Recent accounting pronouncements | Recent accounting pronouncements — Management has considered all recent accounting pronouncements and determined that they will not have a material effect on the Company’s consolidated financial statements. |
REVENUES, NET (Tables)
REVENUES, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Summary of revenues net by category | Revenues, net by category were as follows (in thousands): Years ended December 31, 2022 2021 Endari® $ 17,854 $ 20,117 Other 536 493 Revenues, net 18,390 20,610 |
Revenue Allowance and Accrual Activities | The following table summarizes the revenue allowance and accrual activities for the years ended December 31, 2022, and 2021 (in thousands): Trade Discounts, Allowances and Chargebacks Government Rebates and Other Incentives Returns Total Balance as of December 31, 2020 $ 134 $ 2,119 $ 473 2,726 Provision related to sales in the current year 3,065 3,845 234 7,144 Adjustments related to prior period sales 13 226 ( 148 ) 92 Credit and payments made ( 1,731 ) ( 3,057 ) ( 20 ) ( 4,808 ) Balance as of December 31, 2021 1,481 3,133 539 5,153 Provision related to sales in the current year 2,672 2,857 1,416 6,945 Adjustments related to prior period sales ( 56 ) 18 537 499 Credit and payments made ( 2,739 ) ( 2,290 ) ( 2,077 ) ( 7,106 ) Balance as of December 31, 2022 $ 1,358 $ 3,718 $ 415 $ 5,491 |
Summarizes revenue attributable to each of the customers that accounted for 10% or more of net revenues | The following table summarizes revenue attributable to each of the customers that accounted for 10% or more of net revenues in either of the period shown: Years Ended December 31, 2022 2021 Customer A 25 % 50 % Customer B 27 % 29 % Customer C 14 % 10 % Customer D 13 % — |
SELECTED FINANCIAL STATEMENT _2
SELECTED FINANCIAL STATEMENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventory | Inventories consisted of the following (in thousand): As of December 31 2022 2021 Raw materials and components $ 1,393 $ 1,439 Work-in-process 513 115 Finished goods 5,428 6,228 Inventory reserve ( 4,955 ) ( 3,390 ) Total inventories, net $ 2,379 $ 4,392 |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following (in thousands): As of December 31 2022 2021 Prepaid insurance $ 598 $ 660 Prepaid expenses 467 326 Other current assets 449 394 Total prepaid expenses and other current assets $ 1,514 $ 1,380 |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): As of December 31 2022 2021 Equipment $ 367 $ 342 Leasehold improvements 39 39 Furniture and fixtures 99 103 Construction-in-progress — 57 Total property and equipment 505 541 Less: accumulated depreciation ( 430 ) ( 394 ) Total property and equipment, net $ 75 $ 147 F |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Schedule of Fair Value and Changes in Fair Value of Investment in Convertible Bonds | The following table sets forth the fair value and changes in fair value of the investment in the Telcon convertible bond as of December 31, 2022 and 2021 (in thousands): Investment in convertible bonds December 31, 2022 December 31, 2021 Balance, beginning of period $ 26,100 $ 27,866 Sales of convertible bond ( 2,919 ) — Net loss on investment in convertible bond ( 126 ) — Change in fair value included in the statement of other comprehensive loss ( 3,084 ) ( 1,766 ) Balance, end of period $ 19,971 $ 26,100 |
Schedule of fair value based upon assumptions | The fair values as of December 31, 2022 and December 31, 2021 were based upon following assumptions: December 31, 2022 December 31, 2021 Principal outstanding (South Korean won) KRW 26.5 billion KRW 30 billion Stock price KRW 1,015 KRW 2,925 Expected life (in years) 7.79 8.79 Selected yield 13.50 % 10.50 % Expected volatility (Telcon common stock) 78.50 % 81.31 % Risk-free interest rate (South Korea government bond) 3.74 % 2.19 % Expected dividend yield 0.00 % 0.00 % Conversion price KRW 1,068 (US$ 0.85 ) KRW 2,847 (US$ 2.39 ) |
Schedule of Certain Unaudited Financial Information of EJ Holdings | The following table sets forth certain unaudited financial information of EJ Holdings as of December 31, 2022 and 2021 and for the 12 months ended December 31, 2022 and 2021 (in thousands): As of December 31, 2022 2021 ASSETS Current assets $ 797 $ 505 Other assets 9,573 10,585 Total assets $ 10,370 $ 11,090 LIABILITIES Current liabilities $ 794 $ 931 Long-term liabilities 25,017 22,589 Total liabilities $ 25,811 $ 23,520 Noncontrolling interest $ ( 9,283 ) $ ( 7,458 ) Years Ended December 31, 2022 2021 Revenue, net $ 193 $ 234 Net loss $ ( 4,782 ) $ ( 6,833 ) |
SELECTED FINANCIAL STATEMENT _3
SELECTED FINANCIAL STATEMENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables And Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses as of December 31, 2022 and 2021 consisted of the following (in thousands): December 31, 2022 December 31, 2021 Accounts payable: Clinical and regulatory expenses $ 361 $ 534 Professional fees 626 477 Selling expenses 1,363 932 Manufacturing costs 650 378 Non-employee board member compensation 484 136 Other vendors 301 262 Total accounts payable 3,785 2,719 Accrued interest payable, related parties 144 91 Accrued interest payable 2,381 579 Accrued expenses: Payroll expenses 1,263 1,097 Government rebates and other rebates 5,536 4,371 Other accrued expenses 440 332 Total accrued expenses 7,239 5,800 Total accounts payable and accrued expenses $ 13,549 $ 9,189 |
Schedule of other current liabilities | Other current liabilities consisted of the following (in thousands): As of December 31 2022 2021 Trade discount $ 1,200 $ 3,000 Unearned revenue 10,000 — Other current liabilities 1,717 1,404 Total other current liabilities $ 12,917 $ 4,404 |
Schedule of other long-term liabilities | Other long-term liabilities consisted of the following (in thousands): As of December 31 2022 2021 Trade discount $ 21,682 $ 23,148 Unearned revenue — 10,000 Other long-term liabilities 32 25 Total other long-term liabilities $ 21,714 $ 33,173 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of notes payable | Notes payable consisted of the following at December 31, 2022 and 2021 (in thousands except for conversion price and underlying shares) excluding the revolving line of credit agreement with related party discussed below: Year Interest Rate Term of Notes Conversion Principal Unamortized Discount December 31, 2022 Carrying Shares Notes payable 2013 10 % Due on demand — $ 763 $ — $ 763 — 2021 11 % Due on demand - 2 years — 2,843 — 2,843 — 2022 10 % - 28 % Due on demand - 15 months — 3,696 108 $ 3,588 $ 7,302 $ 108 $ 7,194 — Current $ 6,919 $ 105 $ 6,814 — Non-current $ 383 $ 3 $ 380 — 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 — 5,026 175 4,913 (c) — $ 5,826 $ 175 $ 5,713 — Current $ 2,305 $ — $ 2,367 — Non-current $ 3,521 $ 175 $ 3,346 — Convertible notes payable 2020 12 % 3 years $ 10.00 (a) 3,150 — 3,150 326,655 2021 2 % 3 years $ 0.37 (b) 14,140 2,635 11,505 41,318,094 $ 17,290 $ 2,635 $ 14,655 41,644,749 Current $ 17,290 $ 2,635 $ 14,655 41,644,749 Grand Total $ 30,418 $ 2,918 $ 27,562 41,644,749 Year Interest Rate Term of Notes Conversion Principal Unamortized Carrying Shares 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 12 % 3 years $ 10.00 (a) 3,150 — 3,150 316,756 2021 2 % 3 years $ 1.48 (b) 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 Grand 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 at December 31, 2022 . (c) Includes $ 62,000 of the fair value of embedded derivative. |
Schedule of future contractual principal payments of notes payable | As of December 31, 2022, future contractual principal payments due on notes payable were as follows (in thousands): Year Ending 2023 26,514 2024 383 2025 — 2026 — 2027 3,521 Total $ 30,418 |
Schedule of fair value based upon assumptions | The fair values as of December 31, 2022 and December 31, 2021 were based upon following assumptions: December 31, 2022 December 31, 2021 Principal outstanding (South Korean won) KRW 26.5 billion KRW 30 billion Stock price KRW 1,015 KRW 2,925 Expected life (in years) 7.79 8.79 Selected yield 13.50 % 10.50 % Expected volatility (Telcon common stock) 78.50 % 81.31 % Risk-free interest rate (South Korea government bond) 3.74 % 2.19 % Expected dividend yield 0.00 % 0.00 % Conversion price KRW 1,068 (US$ 0.85 ) KRW 2,847 (US$ 2.39 ) |
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, 2022 and December 31, 2021 (in thousands): Convertible promissory notes December 31, 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 ( 4,259 ) 1,913 Balance, end of period $ 3,248 $ 7,507 |
Conversion Feature Liabilities [Member] | Convertible Promissory Notes [Member] | |
Schedule of fair value based upon assumptions | The fair value as of December 31, 2022 and December 31, 2021 was based on upon following assumptions: Convertible promissory notes December 31, 2022 December 31, 2021 Stock price $ 0.26 $ 1.67 Conversion price $ 0.37 $ 1.48 Select yield 27.50 % 21.99 % Expected volatility 50 % 50 % Time until maturity (in years) 1.16 2.16 Dividend yield — — Risk-free rate 4.68 % 0.77 % |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of fair value based upon assumptions | The fair values as of December 31, 2022 and December 31, 2021 were based upon following assumptions: December 31, 2022 December 31, 2021 Principal outstanding (South Korean won) KRW 26.5 billion KRW 30 billion Stock price KRW 1,015 KRW 2,925 Expected life (in years) 7.79 8.79 Selected yield 13.50 % 10.50 % Expected volatility (Telcon common stock) 78.50 % 81.31 % Risk-free interest rate (South Korea government bond) 3.74 % 2.19 % Expected dividend yield 0.00 % 0.00 % Conversion price KRW 1,068 (US$ 0.85 ) KRW 2,847 (US$ 2.39 ) |
Summary of outstanding warrants | A summary of the Company’s warrants activity for the years ended December 31, 2022 and 2021 is presented below: December 31, 2022 December 31, 2021 Number of Warrants Weighted Number of Warrants Weighted Warrants outstanding, beginning of period 8,236,017 $ 5.78 8,439,480 $ 6.09 Granted 500,000 $ 2.50 — $ — Exercised — $ — — $ — Cancelled, forfeited and expired ( 2,125,497 ) $ 14.38 ( 203,463 ) $ 4.36 Warrants outstanding, end of period 6,610,520 $ 2.22 8,236,017 $ 5.78 Warrant exercisable, end of period 6,610,520 $ 2.22 7,486,017 $ 6.12 |
Summary of stock option activity | A summary of the Company’s stock option activity for the years ended December 31, 2022 and 2021 is presented below : December 31, 2022 December 31, 2021 Number of Weighted‑ Number of Weighted‑ Options outstanding, beginning of period 5,968,338 $ 4.78 7,110,025 $ 4.63 Granted or deemed issued — $ — — $ — Exercised — $ — — $ — Cancelled, forfeited and expired ( 1,307,551 ) $ 3.73 ( 1,141,687 ) $ 3.82 Options outstanding, end of period 4,660,787 $ 5.08 5,968,338 $ 4.78 Options exercisable at end of year 4,645,286 $ 5.10 5,937,837 $ 4.80 Options available for future grant 4,000,000 4,000,000 |
Convertible Promissory Note [Member] | |
Schedule of fair value of conversion feature liabilities | The following table presents the change in fair value of the warrants as of June 15, 2022 and 2021 (in thousands): Warrant liability— Convertible Promissory Note June 15, 2022 December 31, 2021 Balance, beginning of period $ 1,463 $ 988 Change in fair value included in the statement of operations ( 1,250 ) 475 Reclassification to equity ( 213 ) — Balance, end of period $ — $ 1,463 |
Schedule of fair value based upon assumptions | The fair value of the warrant derivative liabilities was determined using the Black-Scholes Merton model and was based upon following assumptions: June 15, 2022 December 31, 2021 Exercise price $ 2.05 $ 2.05 Stock price $ 0.36 $ 1.67 Risk‑free interest rate 3.35 % 1.04 % Expected volatility (peer group) 126.00 % 117.00 % Expected life (in years) 3.00 3.46 Expected dividend yield — — Number outstanding 1,250,000 1,250,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes consists of the following for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Current U.S. $ 30 $ 25 International 30 — Deferred U.S. — — International — — $ 60 $ 25 |
Schedule of deferred tax assets and liabilities | Deferred tax assets consisted of the following as of December 31, 2022 and 2021 (in thousands): 2022 2021 Net operating loss carryforward $ 17,978 $ 17,019 General business tax credit 11,837 11,393 Stock options 6,149 5,955 Charitable contribution 37 36 Accrued expenses 380 292 Unearned revenue 2,472 2,393 Allowance for bad debt 442 167 Unrealized gain on foreign exchange translation and others 789 133 Section 174 Expenditures 292 — Unrealized gain/ (loss) on LT investment 33 Other 4,130 3,188 Total gross deferred tax assets 44,539 40,576 Less valuation allowance ( 44,112 ) ( 40,147 ) Net deferred tax assets $ 427 $ 429 Deferred tax liabilities consisted of the following as of December 31, 2022 and 2021 (in thousands): 2022 2021 Unrealized gain on available-for-sale securities $ ( 426 ) $ ( 427 ) Other ( 1 ) ( 2 ) Total deferred tax liabilities $ ( 427 ) $ ( 429 ) |
Schedule of income tax provision computed using the statutory federal tax rate | The income tax provision differs from that computed using the statutory federal tax rate of 21 % due to the following factors (in thousands): 2022 2021 Tax benefit at statutory federal rate $ ( 2,242 ) $ ( 3,359 ) State taxes, net of federal tax benefit ( 453 ) ( 275 ) Increase (decreases) in valuation allowance 3,964 2,722 Permanent items ( 384 ) 1,337 General business tax credit ( 450 ) ( 902 ) Other ( 375 ) 502 $ 60 $ 25 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | Future minimum lease payments were as follows as of December 31, 2022 (in thousands): Amount 2023 1,049 2024 1,063 2025 1,092 2026 and thereafter 836 Total lease payments 4,040 Less: Interest ( 784 ) Operating lease liabilities $ 3,256 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of outstanding loans from related parties | The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2022 (in thousands except for conversion rate and share information): Class Lender Interest Date of Term of Loan Principal Amount Outstanding December 31, 2022 Highest Amount of Amount of Current, Promissory note payable to related parties: Willis Lee(2) 12 % 10/29/2020 Due on Demand 100 100 — — Soomi Niihara(1) 12 % 12/7/2021 Due on Demand 700 700 — — Soomi Niihara(1) 12 % 1/18/2022 Due on Demand — 300 300 32 Yasushi Nagasaki(2) 10 % 2/9/2022 Due on Demand — 50 50 4 Hope International Hospice, Inc.(1) 10 % 2/9/2022 Due on Demand 350 350 — — Hope International Hospice, Inc.(1) 10 % 2/15/2022 Due on Demand 210 210 — — Soomi Niihara(1) 10 % 2/15/2022 Due on Demand 100 100 — — George Sekulich(2) 10 % 2/16/2022 Due on Demand — 26 26 2 Soomi Niihara(1) 10 % 3/7/2022 Due on Demand — 200 200 15 Hope International Hospice, Inc.(1) 12 % 3/15/2022 Due on Demand 150 150 — — Hope International Hospice, Inc.(1) 12 % 3/30/2022 Due on Demand 150 150 — — Wei Peu Derek Zen(2) 10 % 3/31/2022 Due on Demand 200 200 — — Willis Lee(2) 10 % 4/14/2022 Due on Demand 45 45 — — Hope International Hospice, Inc.(1) 10 % 5/25/2022 Due on Demand 40 40 — — Yutaka and Soomi Niihara(1) 12 % 7/27/2022 5 years 402 402 — 20 Hope International Hospice, Inc.(1) 10 % 8/15/2022 Due on Demand 50 50 — — Yutaka and Soomi Niihara(1) 10 % 8/16/2022 5 years 250 250 — 8 Yutaka and Soomi Niihara(1) 10 % 8/16/2022 5 years 1,669 1,669 — 56 Hope International Hospice, Inc.(1) 10 % 8/17/2022 Due on Demand 50 50 — — Yutaka and Soomi Niihara(1) 10 % 8/17/2022 Due on Demand 60 60 — — Seah Lim(2) 6 % 9/16/2022 3 years 1,200 1,200 — — Hope International Hospice, Inc. 10 % 10/20/2022 Due on Demand 100 100 — — Subtotal $ 5,826 $ 6,402 $ 576 $ 137 Revolving line of credit agreement Yutaka Niihara(2) 5.25 % (3) 12/27/2019 Due on Demand — 400 — 110 Subtotal $ — $ 400 $ — $ 110 Total $ 5,826 $ 6,802 $ 576 $ 247 The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2021 (in thousands except for conversion rate and share information): Class Lender Interest Date of Term of Loan Principal Amount Outstanding December 31, 2021 Highest Amount of Amount of Current, Promissory note payable to related parties: Willis Lee (2) 12 % 10/29/2020 Due on Demand $ 100 $ 100 $ — $ — Soomi Niihara (1) 12 % 1/20/2021 Due on Demand — 700 700 13 Soomi Niihara (1) 12 % 9/15/2021 Due on Demand — 300 300 3 Soomi Niihara (1) 12 % 12/7/2021 Due on Demand 700 700 — — Subtotal $ 800 $ 1,800 $ 1,000 $ 16 Revolving line of credit Yutaka Niihara (1) 5.25 % 12/27/2019 Due on Demand 400 800 400 35 Subtotal 400 800 400 35 Total $ 1,200 $ 2,600 $ 1,400 $ 51 (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also a director and the Chief Executive Officer of Hope International Hospice, Inc. (2) Officer or director. (3) The rate varies with changes in the prime rate and does not give effect to the “tax gross-up” described in Note 7. |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended | |
Jul. 17, 2019 | Dec. 31, 2022 | |
US [Member] | ||
Description Of Business [Line Items] | ||
Orphan drug designation provides market exclusivity period after marketing approval | 7 years | |
EU [Member] | ||
Description Of Business [Line Items] | ||
Orphan drug designation provides market exclusivity period after marketing approval | 10 years | |
Emmaus Life Sciences, Inc. [Member] | ||
Description Of Business [Line Items] | ||
Reverse split, conversion ratio | 0.167 | |
Reverse split | 1-for-6 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | |||
Feb. 22, 2021 USD ($) | Dec. 31, 2022 USD ($) Vendor Segment shares | Dec. 31, 2021 USD ($) Vendor shares | Dec. 31, 2018 | |
Summary Of Significant Accounting Policy [Line Items] | ||||
Net income (loss) | $ (10,625,000) | $ (15,946,000) | ||
Working capital deficit | 48,000,000 | |||
Accounts receivable, net | 375,000 | 1,040,000 | ||
Other current liabilities | $ 12,917,000 | $ 4,404,000 | ||
Number of vendors | Vendor | 1 | 1 | ||
Inventories, net of reserve | $ 4,955,000 | $ 3,390,000 | ||
Impairment of long lived assets | 0 | 0 | ||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Potentially dilutive securities outstanding | shares | 52,338,872 | 23,310,698 | ||
Number of reportable segments | Segment | 1 | |||
EJ Holding, Inc. [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Equity method investment, ownership percentage | 40% | |||
Minimum [Member] | Equipment [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Useful life | 5 years | |||
Minimum [Member] | Furniture and Fixtures [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Useful life | 5 years | |||
Maximum [Member] | Equipment [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Useful life | 7 years | |||
Maximum [Member] | Furniture and Fixtures [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Useful life | 7 years | |||
Prestige Capital Finance, LLC [Member] | Purchase and Sale Agreement [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Percentage of down payment or advance receivable on face amount of accounts receivable at time of sale of accounts receivable | 75% | |||
Cap on advances under agreement | $ 7,500,000 | |||
Accounts receivable, net | $ 730,000 | $ 587,000 | ||
Other current liabilities | 55,000 | 12,000 | ||
Factoring fee | $ 473,000 | $ 317,000 | ||
Prestige Capital Finance, LLC [Member] | Purchase and Sale Agreement [Member] | Minimum [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Percentage of discount fees on face amount of accounts receivable | 2.25% | |||
Prestige Capital Finance, LLC [Member] | Purchase and Sale Agreement [Member] | Maximum [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Percentage of discount fees on face amount of accounts receivable | 7.25% |
REVENUES, NET (Details)
REVENUES, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues, net | $ 18,390 | $ 20,610 |
Endari [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues, net | 17,854 | 20,117 |
Other [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues, net | $ 536 | $ 493 |
REVENUES, NET (Details 1)
REVENUES, NET (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | $ 5,153 | $ 2,726 |
Provision related to sales in the current year | 6,945 | 7,144 |
Adjustments related to prior period sales | 499 | 92 |
Credit and payments made | (7,106) | (4,808) |
Ending Balance | 5,491 | 5,153 |
Trade Discounts, Allowances and Chargebacks [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | 1,481 | 134 |
Provision related to sales in the current year | 2,672 | 3,065 |
Adjustments related to prior period sales | (56) | 13 |
Credit and payments made | (2,739) | (1,731) |
Ending Balance | 1,358 | 1,481 |
Government Rebates and Other Incentives [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | 3,133 | 2,119 |
Provision related to sales in the current year | 2,857 | 3,845 |
Adjustments related to prior period sales | 18 | 226 |
Credit and payments made | (2,290) | (3,057) |
Ending Balance | 3,718 | 3,133 |
Returns [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Beginning Balance | 539 | 473 |
Provision related to sales in the current year | 1,416 | 234 |
Adjustments related to prior period sales | 537 | (148) |
Credit and payments made | (2,077) | (20) |
Ending Balance | $ 415 | $ 539 |
REVENUES, NET (Details 2)
REVENUES, NET (Details 2) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer A [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk, percentage | 25% | 50% |
Customer B [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk, percentage | 27% | 29% |
Customer C [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk, percentage | 14% | 10% |
Customer D [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Concentration risk, percentage | 13% |
REVENUES, NET (Details Narrativ
REVENUES, NET (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue From Contract With Customer Excluding Assessed Tax | $ 18,390 | $ 20,610 |
Telcon, Inc. ("Telcon") [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Upfront payment | 10,000 | |
Telcon, Inc. ("Telcon") [Member] | Distribution Agreement [Member] | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue From Contract With Customer Excluding Assessed Tax | $ 10,000 | $ 10,000 |
SELECTED FINANCIAL STATEMENT _4
SELECTED FINANCIAL STATEMENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 1,393 | $ 1,439 |
Work-in-process | 513 | 115 |
Finished goods | 5,428 | 6,228 |
Inventory reserve | (4,955) | (3,390) |
Total | $ 2,379 | $ 4,392 |
SELECTED FINANCIAL STATEMENT _5
SELECTED FINANCIAL STATEMENT ASSETS (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid insurance | $ 598 | $ 660 |
Prepaid expenses | 467 | 326 |
Other current assets | 449 | 394 |
Total | $ 1,514 | $ 1,380 |
SELECTED FINANCIAL STATEMENT _6
SELECTED FINANCIAL STATEMENT ASSETS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and equipment | ||
Property and equipment, gross | $ 505 | $ 541 |
Less: accumulated depreciation | (430) | (394) |
Total property and equipment, net | 75 | 147 |
Equipment [Member] | ||
Property and equipment | ||
Property and equipment, gross | 367 | 342 |
Leasehold Improvements [Member] | ||
Property and equipment | ||
Property and equipment, gross | 39 | 39 |
Furniture and Fixtures [Member] | ||
Property and equipment | ||
Property and equipment, gross | $ 99 | 103 |
Construction-in-Progress [Member] | ||
Property and equipment | ||
Property and equipment, gross | $ 57 |
SELECTED FINANCIAL STATEMENT _7
SELECTED FINANCIAL STATEMENT ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expenses | $ 39,000 | $ 46,000 |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) ₩ / shares in Units, $ / shares in Units, ₩ in Millions | 1 Months Ended | 12 Months Ended | |||||||
Sep. 28, 2020 USD ($) $ / shares | Sep. 28, 2020 ₩ / shares | Feb. 28, 2022 USD ($) | Feb. 28, 2022 KRW (₩) | Oct. 31, 2018 USD ($) | Dec. 31, 2022 USD ($) | Feb. 28, 2022 KRW (₩) | Dec. 31, 2021 USD ($) | Dec. 31, 2018 USD ($) | |
Schedule Of Investments [Line Items] | |||||||||
Secured debt percentage | 1% | ||||||||
Call option agreement date | Sep. 28, 2020 | ||||||||
Realized net loss on investment bond | $ 126,000 | ||||||||
Other Income | 41,000 | ||||||||
Investment amount | $ 32,000 | ||||||||
Unsecured debt | $ 13,600,000 | ||||||||
Debt instrument, maturity date | Sep. 30, 2028 | ||||||||
Unsecured debt, additional borrowings | $ 5,300,000 | $ 6,300,000 | |||||||
Notes Receivable Gross | $ 25,000,000 | $ 22,600,000 | |||||||
E J Holdings Inc [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Equity method investment, ownership percentage | 40% | ||||||||
Telcon, Inc. ("Telcon") [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Convertible bond maturity date | Oct. 16, 2030 | Oct. 16, 2030 | |||||||
Secured debt percentage | 2.10% | 2.10% | 2.10% | ||||||
Convertible bond initial conversion price | (per share) | $ 8 | ₩ 9,232 | |||||||
Offset amount against principal amount of convertible bond | 2,900,000 | ₩ 3,500 | |||||||
Cash proceeds to shortfall in revenue and profits | $ 310,000 | ₩ 400 | |||||||
Japan Industrial Partners [Member] | E J Holdings Inc [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Equity method investment, ownership percentage | 60% | ||||||||
Maximum [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Percentage of principal amount of convertible bond to be repurchased | 50% | ||||||||
Convertible Bond Purchase Agreement [Member] | Telcon, Inc. ("Telcon") [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Purchase of principal amount of convertible bond at face value | $ 26,100,000 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Investments [Line Items] | ||
Balance, beginning of period | $ 26,100 | $ 27,866 |
Sales of convertible bond | (2,919) | |
Net loss on investment in convertible bond | (126) | |
Change in fair value included in the statement of other comprehensive loss | (3,084) | (1,766) |
Balance, end of period | $ 19,971 | $ 26,100 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain Loss On Investment In Convertible Bond | |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax | Other Comprehensive Income Unrealized Holding Gain Loss On Securities Arising During Period Net Of Tax |
INVESTMENTS (Details 1)
INVESTMENTS (Details 1) - Valuation Technique Binomial Monte-Carlo Cliquet Option Pricing Model [Member] ₩ / shares in Units, ₩ in Billions | 12 Months Ended | |||
Dec. 31, 2022 KRW (₩) ₩ / shares | Dec. 31, 2021 KRW (₩) ₩ / shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Schedule Of Investments [Line Items] | ||||
Principal outstanding (South Korean won) | ₩ | ₩ 26.5 | ₩ 30 | ||
Stock price | ₩ / shares | ₩ 1,015 | ₩ 2,925 | ||
Expected Life (in years) [Member] | ||||
Schedule Of Investments [Line Items] | ||||
Expected life (in years) | 7 years 9 months 14 days | 8 years 9 months 14 days | ||
Selected Yield [Member] | ||||
Schedule Of Investments [Line Items] | ||||
Investment in convertible bonds, measurement input | 0.1350 | 0.1050 | ||
Expected Volatility (Telcon common stock) [Member] | ||||
Schedule Of Investments [Line Items] | ||||
Investment in convertible bonds, measurement input | 0.7850 | 0.8131 | ||
Risk-free Interest Rate (South Korea government bond) [Member] | ||||
Schedule Of Investments [Line Items] | ||||
Investment in convertible bonds, measurement input | 0.0374 | 0.0219 | ||
Expected Dividend Yield [Member] | ||||
Schedule Of Investments [Line Items] | ||||
Investment in convertible bonds, measurement input | 0 | 0 | ||
Conversion Price [Member] | ||||
Schedule Of Investments [Line Items] | ||||
Conversion price | (per share) | ₩ 1,068 | ₩ 2,847 | $ 0.85 | $ 2.39 |
INVESTMENTS (Details 2)
INVESTMENTS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
ASSETS | ||
Current assets | $ 6,289 | $ 9,091 |
Other assets | 263 | 295 |
Total assets | 48,225 | 56,734 |
LIABILITIES | ||
Current liabilities | 54,323 | 37,100 |
Total liabilities | 82,316 | 78,184 |
Revenues, net | 18,390 | 20,610 |
Net loss | (10,625) | (15,946) |
EJ Holdings, Inc. [Member] | ||
ASSETS | ||
Current assets | 797 | 505 |
Other assets | 9,573 | 10,585 |
Total assets | 10,370 | 11,090 |
LIABILITIES | ||
Current liabilities | 794 | 931 |
Long-term liabilities | 25,017 | 22,589 |
Total liabilities | 25,811 | 23,520 |
Noncontrolling interest | (9,283) | (7,458) |
Revenues, net | 193 | 234 |
Net loss | $ (4,782) | $ (6,833) |
SELECTED FINANCIAL STATEMENT _8
SELECTED FINANCIAL STATEMENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts payable: | ||
Clinical and regulatory expenses | $ 361 | $ 534 |
Professional fees | 626 | 477 |
Selling expenses | 1,363 | 932 |
Manufacturing costs | 650 | 378 |
Non-employee board member compensation | 484 | 136 |
Other vendors | 301 | 262 |
Total accounts payable | 3,785 | 2,719 |
Accrued interest payable, related parties | 144 | 91 |
Accrued interest payable | 2,381 | 579 |
Accrued expenses: | ||
Payroll expenses | 1,263 | 1,097 |
Government rebates and other rebates | 5,536 | 4,371 |
Other accrued expenses | 440 | 332 |
Total accrued expenses | 7,239 | 5,800 |
Total accounts payable and accrued expenses | $ 13,549 | $ 9,189 |
SELECTED FINANCIAL STATEMENT _9
SELECTED FINANCIAL STATEMENT LIABILITIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Current Liabilities [Line Items] | ||
Other current liabilities | $ 12,917 | $ 4,404 |
Other Current Liabilities [Member] | ||
Other Current Liabilities [Line Items] | ||
Other current liabilities | 1,717 | 1,404 |
Unearned Revenue [Member] | ||
Other Current Liabilities [Line Items] | ||
Other current liabilities | 10,000 | |
Trade Discount [Member] | ||
Other Current Liabilities [Line Items] | ||
Other current liabilities | $ 1,200 | $ 3,000 |
SELECTED FINANCIAL STATEMENT_10
SELECTED FINANCIAL STATEMENT LIABILITIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Long Term Liabilities [Line Items] | ||
Other long-term liabilities | $ 21,714 | $ 33,173 |
Trade Discount [Member] | ||
Other Long Term Liabilities [Line Items] | ||
Other long-term liabilities | 21,682 | 23,148 |
Unearned Revenue [Member] | ||
Other Long Term Liabilities [Line Items] | ||
Other long-term liabilities | 10,000 | |
Other Long-Term Liabilities [Member] | ||
Other Long Term Liabilities [Line Items] | ||
Other long-term liabilities | $ 32 | $ 25 |
SELECTED FINANCIAL STATEMENT_11
SELECTED FINANCIAL STATEMENT LIABILITIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Jul. 12, 2017 | Jun. 12, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary Of Significant Accounting Policy [Line Items] | ||||
Accounts payable and accrued expenses | $ 13,549,000 | $ 9,189,000 | ||
API Supply Agreement [Member] | Telcon, Inc. ("Telcon") [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Proceeds from supply agreement | $ 31,800,000 | |||
Revised API Agreement [Member] | Telcon, Inc. ("Telcon") [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
Annual purchase target amount | $ 5,000,000 | |||
Target profit | $ 2,500,000 | |||
PGLG [Member] | API Supply Agreement [Member] | Telcon, Inc. ("Telcon") [Member] | ||||
Summary Of Significant Accounting Policy [Line Items] | ||||
PGLG, purchase price | 600,000 | 400,000 | ||
Accounts payable and accrued expenses | $ 644,000 | $ 382,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Equity_Instrument $ / shares | Dec. 31, 2021 USD ($) Equity_Instrument $ / shares | Oct. 31, 2018 | ||
Debt Instrument [Line Items] | ||||
Interest rate | 1% | |||
Principal Outstanding | $ 30,418 | $ 22,339 | ||
Unamortized Discount | 2,918 | 4,332 | ||
Carrying Amount | $ 27,562 | $ 18,007 | ||
Shares Underlying Notes | Equity_Instrument | 41,644,749 | 10,173,099 | ||
2013 Notes payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 10% | 10% | ||
Term of Notes | Due on demand | Due on demand | ||
Principal Outstanding | $ 763 | $ 869 | ||
Carrying Amount | $ 763 | $ 869 | ||
2021 Notes payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 11% | 11% | ||
Term of Notes | Due on demand - 2 years | Due on demand - 2 years | ||
Term of Notes | 2 years | 2 years | ||
Principal Outstanding | $ 2,843 | $ 3,030 | ||
Carrying Amount | $ 2,843 | 3,030 | ||
2022 Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Term of Notes | Due on demand - 15 months | |||
Term of Notes | 15 months | |||
Principal Outstanding | $ 3,696 | |||
Unamortized Discount | 108 | |||
Carrying Amount | $ 3,588 | |||
2022 Notes Payable [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 10% | |||
2022 Notes Payable [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 28% | |||
Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $ 7,302 | 3,899 | ||
Unamortized Discount | 108 | |||
Carrying Amount | 7,194 | 3,899 | ||
Principal Outstanding, Current | 6,919 | 2,399 | ||
Unamortized Discount, Current | 105 | |||
Notes payable, current | 6,814 | 2,399 | ||
Principal Outstanding, Non Current | 383 | 1,500 | ||
Unamortized Discount, Noncurrent | 3 | |||
Notes payable, non-current | $ 380 | $ 1,500 | ||
2020 Notes payable - related parties [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 12% | 12% | ||
Term of Notes | Due on demand | Due on demand | ||
Principal Outstanding | $ 100 | $ 100 | ||
Carrying Amount | $ 100 | $ 100 | ||
2021 Notes payable - related parties [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 12% | 12% | ||
Term of Notes | Due on demand | Due on demand | ||
Principal Outstanding | $ 700 | $ 700 | ||
Carrying Amount | $ 700 | 700 | ||
2022 Notes payable - related parties [Member] | ||||
Debt Instrument [Line Items] | ||||
Term of Notes | Due on demand - 5 years | |||
Term of Notes | 5 years | |||
Principal Outstanding | $ 5,026 | |||
Unamortized Discount | 175 | |||
Carrying Amount | [1] | 4,913 | ||
Fair value of embedded derivative | $ 62,000 | |||
2022 Notes payable - related parties [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6% | |||
2022 Notes payable - related parties [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 12% | |||
Notes payable - related parties [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $ 5,826 | 800 | ||
Unamortized Discount | 175 | |||
Carrying Amount | 5,713 | 800 | ||
Principal Outstanding, Current | 2,305 | 800 | ||
Notes payable, current | 2,367 | $ 800 | ||
Principal Outstanding, Non Current | 3,521 | |||
Unamortized Discount, Noncurrent | 175 | |||
Notes payable, non-current | $ 3,346 | |||
2020 Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 12% | 12% | ||
Term of Notes | 3 years | 3 years | ||
Term of Notes | 3 years | 3 years | ||
Conversion Price | $ / shares | [2] | $ 10 | $ 10 | |
Principal Outstanding | $ 3,150 | $ 3,150 | ||
Carrying Amount | $ 3,150 | $ 3,150 | ||
Shares Underlying Notes | Equity_Instrument | 326,655 | 316,756 | ||
2021 Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2% | 2% | ||
Term of Notes | 3 years | 3 years | ||
Term of Notes | 3 years | 3 years | ||
Conversion Price | $ / shares | [3] | $ 0.37 | $ 1.48 | |
Principal Outstanding | $ 14,140 | $ 14,490 | ||
Unamortized Discount | 2,635 | 4,332 | ||
Carrying Amount | $ 11,505 | $ 10,158 | ||
Shares Underlying Notes | Equity_Instrument | 41,318,094 | 9,856,343 | ||
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $ 17,290 | $ 17,640 | ||
Unamortized Discount | 2,635 | 4,332 | ||
Carrying Amount | $ 14,655 | $ 13,308 | ||
Shares Underlying Notes | Equity_Instrument | 41,644,749 | 10,173,099 | ||
Principal Outstanding, Current | $ 17,290 | $ 14,490 | ||
Unamortized Discount, Current | 2,635 | 4,332 | ||
Notes payable, current | $ 14,655 | $ 10,158 | ||
Shares Underlying Notes, Current | Equity_Instrument | 41,644,749 | 9,856,343 | ||
Principal Outstanding, Non Current | $ 3,150 | |||
Notes payable, non-current | $ 3,150 | |||
Shares Underlying Notes, Non Current | Equity_Instrument | 316,756 | |||
[1] Includes $ 62,000 of the fair value of embedded derivative. This note is convertible into shares of EMI Holding, Inc., a wholly owned subsidiary of Emmaus Life Sciences, Inc . 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 at December 31, 2022 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||||
Aug. 15, 2022 | Feb. 09, 2021 | Jun. 15, 2020 | Dec. 31, 2022 | Sep. 30, 2022 | Aug. 31, 2022 | Jul. 31, 2022 | Jun. 30, 2022 | Oct. 31, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 16, 2022 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||||||||||
Weighted-average stated interest rate | 8% | 8% | 6% | ||||||||||
Weighted-average effective interest rate | 20% | 20% | 15% | ||||||||||
Prepayments of convertible debentures | $ 350,000 | $ 7,200,000 | |||||||||||
Interest rate | 1% | ||||||||||||
Loss on debt extinguishment | 501,000 | 365,000 | |||||||||||
Debt instrument, maturity date | Sep. 30, 2028 | ||||||||||||
Common stock | $ 50,000 | $ 50,000 | $ 49,000 | ||||||||||
Common stock | 49,583,501 | 49,583,501 | 49,311,864 | ||||||||||
Issuance cost | $ 32,000 | ||||||||||||
Fair value of warrants | 84,000 | ||||||||||||
Debt Instrument Principle Payments | $ 1,600,000 | ||||||||||||
Proceeds from convertible notes payable issued | $ 14,490,000 | ||||||||||||
Purchase and Sales of Future Receipts [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Installment payment | $ 103,500 | ||||||||||||
Hope International Hospice, Inc. [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 10% | ||||||||||||
Principal amount | $ 50,000 | ||||||||||||
Prepayment amount | $ 1,924,819 | ||||||||||||
Seah Lim [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 6% | ||||||||||||
Debt instrument, maturity date | Sep. 30, 2025 | ||||||||||||
Common stock | 240,000 | ||||||||||||
Fair values of the embedded derivatives | 62,000 | $ 62,000 | $ 68,000 | ||||||||||
Principal amount | $ 1,200,000 | ||||||||||||
Receivables Purchased Amount [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Loss on debt extinguishment | (79,000) | ||||||||||||
Receivables Purchased Amount [Member] | Emmaus Medical [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Sale of accounts receivable | $ 694,960 | 816,000 | |||||||||||
Proceeds from sale of notes receivable | 500,000 | 516,000 | |||||||||||
Weekly amount to be received under agreement by third party | $ 25,969 | $ 34,000 | |||||||||||
Purchased Amount [Member] | Purchase and Sales of Future Receipts [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Sale of accounts receivable | 3,105,000 | ||||||||||||
Proceeds from sale of notes receivable | 2,300,000 | ||||||||||||
Revolving Line of Credit Facility [Member] | Prime Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument variable annual rate | 3% | ||||||||||||
Revolving Line of Credit Facility [Member] | Dr. Yutaka Niihara [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit maximum borrowing capacity | 1,000,000 | $ 1,000,000 | |||||||||||
Line of credit outstanding balance | $ 400,000 | $ 400,000 | $ 400,000 | ||||||||||
Line of credit expiration date | Nov. 22, 2022 | ||||||||||||
Convertible Promissory Note [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 2% | 12% | 11% | ||||||||||
Loss on debt extinguishment | $ 1,400,000 | ||||||||||||
Proceeds from convertible notes payable issued | $ 14,500,000 | ||||||||||||
Conversion price | $ 1.48 | $ 0.37 | $ 0.37 | ||||||||||
Debt instrument, frequency of periodic payment | The convertible promissory notes bear interest at the rate of 2% per year, 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. | ||||||||||||
Convertible Promissory Note [Member] | Maximum [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 17,000,000 | ||||||||||||
Business Loan And Security Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Loss on debt extinguishment | $ 422,000 | ||||||||||||
Principal amount | $ 1,800,000 | ||||||||||||
Net proceeds | 1,666,000 | ||||||||||||
Installment payment | $ 738,000 | ||||||||||||
Prepayment Period | 90 days | ||||||||||||
Prepayment amount | $ 2,250,000 | ||||||||||||
Business Loan And Security Agreement [Member] | First Eight Weeks [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Installment payment | 31,725 | ||||||||||||
Business Loan And Security Agreement [Member] | Remaining Thirty Two Weeks [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Installment payment | $ 71,381 | ||||||||||||
Promissory Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 10% | 12% | |||||||||||
Debt instrument, maturity date | Aug. 16, 2027 | Jul. 31, 2027 | |||||||||||
Promissory Notes [Member] | Unaffiliated Third Parties [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 1,668,751 | $ 402,000 | |||||||||||
Promissory Notes [Member] | Personal Funds [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | 250,000 | ||||||||||||
Promissory Notes [Member] | Dr Niihara And His Wife [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount | $ 1,576,574 | $ 370,000 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Long Term Debt By Maturity [Abstract] | |
2023 | $ 26,514 |
2024 | 383 |
2027 | 3,521 |
Total | $ 30,418 |
NOTES PAYABLE (Details 2)
NOTES PAYABLE (Details 2) - Convertible Promissory Notes [Member] - Conversion Feature Liabilities [Member] - Other Current Liabilities [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Balance, beginning of period | $ 7,507 | |
Fair value at issuance date | $ 5,594 | |
Change in fair value included in the statement of operations | $ (4,259) | $ 1,913 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain Loss On Conversion Feature Derivative Note Payable | Gain Loss On Conversion Feature Derivative Note Payable |
Balance, end of period | $ 3,248 | $ 7,507 |
NOTES PAYABLE (Details 3)
NOTES PAYABLE (Details 3) - Valuation Technique Binomial Lattice Option Pricing Model [Member] - Convertible Promissory Notes [Member] | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Debt Instrument [Line Items] | ||
Stock price | $ 0.26 | $ 1.67 |
Conversion Price [Member] | ||
Debt Instrument [Line Items] | ||
Conversion price | $ 0.37 | $ 1.48 |
Selected Yield [Member] | ||
Debt Instrument [Line Items] | ||
Selected yield | 27.50 | 21.99 |
Expected Volatility [Member] | ||
Debt Instrument [Line Items] | ||
Selected yield | 50 | 50 |
Time Until Maturity [Member] | ||
Debt Instrument [Line Items] | ||
Expected life (in years) | 1 year 1 month 28 days | 2 years 1 month 28 days |
Risk-Free Rate [Member] | ||
Debt Instrument [Line Items] | ||
Selected yield | 4.68 | 0.77 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Feb. 26, 2021 | Jun. 15, 2020 | Sep. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 15, 2022 | Sep. 29, 2021 | Feb. 09, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Oct. 31, 2018 | |
Class Of Warrant Or Right [Line Items] | |||||||||||||
Convertible notes principal amount | $ 27,562,000 | $ 18,007,000 | |||||||||||
Percentage of monthly payments interest rate | 1% | ||||||||||||
Loss on debt extinguishment | $ 501,000 | $ 365,000 | |||||||||||
Common stock, issued | 49,583,501 | 49,311,864 | |||||||||||
Warrant derivative liabilities | $ 70,000 | $ 1,503,000 | |||||||||||
Change in fair value of warrant derivative liabilities | $ 1,304,000 | (432,000) | |||||||||||
Average remaining contractual terms for warrants | 2 years 1 month 6 days | ||||||||||||
Share-based compensation | $ 16,000 | 553,000 | |||||||||||
Research and development | 1,725,000 | 4,110,000 | |||||||||||
Adjustment of warrants change in fair value increase additional paid in capital and accumulated loss | $ 446,000 | ||||||||||||
Common stock issued for services | $ 119,000 | $ 500,000 | |||||||||||
Common Stock [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Common stock issued for services (in shares) | 271,637 | 324,675 | |||||||||||
Common stock issued for services | $ 1,000 | ||||||||||||
Stock Options [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Period remaining for recognition of unrecognized compensation cost | 6 months | ||||||||||||
2011 Stock Incentive Option Plan [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Total unrecognized compensation cost | $ 5,000 | ||||||||||||
2011 Stock Incentive Option Plan [Member] | Stock Options [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Number of shares authorized under the plan | 9,000,000 | ||||||||||||
Expiration period | 10 years | ||||||||||||
Vesting period | 3 years | ||||||||||||
Share-based compensation | $ 16,000 | $ 553,000 | |||||||||||
2021 Stock Incentive Option Plan [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Common stock, issued | 4,000,000 | ||||||||||||
Kainos Medicine, Inc [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Payments to research and development expense | $ 500,000 | ||||||||||||
Common stock shares issued for consideration | 324,675 | ||||||||||||
Addition to equity for common stock | $ 500,000 | ||||||||||||
Research and development | $ 0 | $ 1,500,000 | |||||||||||
Amended and Restated Warrants [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Debt instrument exercise price | $ 0.446 | $ 0.446 | |||||||||||
Number of common stock to be purchased | 4,038,200 | ||||||||||||
Professional Relations and Consulting Service [Member] | Restricted Stock [Member] | Common Stock [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Common stock issued for services (in shares) | 246,637 | 25,000 | |||||||||||
Common stock issued for services | $ 110,000 | $ 9,000 | |||||||||||
Dr. Yutaka Niihara [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Warrants granted to purchase common stock | 500,000 | ||||||||||||
Debt instrument exercise price | $ 2.50 | ||||||||||||
Warrants granted, term | 5 years | ||||||||||||
Warrant derivative liabilities | 70,000 | ||||||||||||
Change in fair value of warrant derivative liabilities | $ 14,000 | ||||||||||||
Convertible Promissory Note [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Number outstanding | 1,250,000 | 1,250,000 | |||||||||||
Convertible Promissory Note [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Class Of Warrant Or Right [Line Items] | |||||||||||||
Convertible notes principal amount | $ 3,150,000 | ||||||||||||
Debt instrument exercise price | $ 2.05 | ||||||||||||
Percentage of monthly payments interest rate | 12% | 2% | 11% | ||||||||||
Extended maturity date | Jun. 15, 2023 | ||||||||||||
Number outstanding | 1,250,000 | ||||||||||||
Loss on debt extinguishment | $ 1,400,000 | ||||||||||||
Repayment of debt | $ 0 | ||||||||||||
Expected life (in years) | 5 years |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - Convertible Promissory Note [Member] - Liability Instrument - Warrants [Member] - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 15, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class Of Warrant Or Right [Line Items] | |||
Balance, beginning of period | $ 1,463 | $ 1,463 | $ 988 |
Change in fair value included in the statement of operations | (1,250) | $ 475 | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain Loss On Conversion Feature Derivative Note Payable | Gain Loss On Conversion Feature Derivative Note Payable | |
Reclassification to equity | $ (213) | ||
Balance, end of period | $ 1,463 |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 1) - Convertible Promissory Note [Member] | Jun. 15, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares |
Class Of Warrant Or Right [Line Items] | ||
Stock price | $ 0.36 | $ 1.67 |
Number outstanding | shares | 1,250,000 | 1,250,000 |
Measurement Input, Exercise Price [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Exercise price | $ 2.05 | $ 2.05 |
Risk-free Interest Rate (South Korea government bond) [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Warrants and rights outstanding, measurement input | 3.35 | 1.04 |
Expected Volatility (Telcon common stock) [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Warrants and rights outstanding, measurement input | 126 | 117 |
Expected Life (in years) [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Expected life (in years) | 3 years | 3 years 5 months 15 days |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details 2) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding, beginning | 8,236,017 | 8,439,480 |
Granted | 500,000 | |
Cancelled, forfeited and expired | (2,125,497) | 203,463 |
Warrants outstanding, ending | 6,610,520 | 8,236,017 |
Warrants exercisable ending | 6,610,520 | 7,486,017 |
Weighted Average Exercise Price, Outstanding | $ 5.78 | $ 6.09 |
Granted | 2.50 | |
Cancelled, forfeited or expired | 14.38 | 4.36 |
Weighted Average Exercise Price, Outstanding | 2.22 | 5.78 |
Weighted Average Exercise Price, Exercisable | $ 2.22 | $ 6.12 |
STOCKHOLDERS' DEFICIT (Detail_4
STOCKHOLDERS' DEFICIT (Details 3) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
2011 Stock Incentive Option Plan [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Options outstanding, beginning | 5,968,338 | 7,110,025 |
Number of Options, Cancelled, forfeited and expired | (1,307,551) | (1,141,687) |
Number of Options outstanding, end | 4,660,787 | 5,968,338 |
Number of Options, Options exercisable | 4,645,286 | 5,937,837 |
Number of Options, Options available for future grant | 4,000,000 | |
Weighted-Average Exercise Price, Options outstanding, beginning | $ 4.78 | $ 4.63 |
Weighted-Average Exercise Price, Cancelled, forfeited and expired | 3.73 | 3.82 |
Weighted-Average Exercise Price, Options outstanding, end | 5.08 | 4.78 |
Weighted-Average Exercise Price, Options exercisable | $ 5.10 | $ 4.80 |
2021 Stock Incentive Option Plan [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Number of Options, Options available for future grant | 4,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current | ||
Current U.S. | $ 30 | $ 25 |
International | 30 | |
Deferred | ||
INCOME TAXES (BENEFIT) | $ 60 | $ 25 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Components of net deferred tax assets | ||
Net operating loss carryforward | $ 17,978 | $ 17,019 |
General business tax credit | 11,837 | 11,393 |
Stock options | 6,149 | 5,955 |
Charitable contribution | 37 | 36 |
Accrued expenses | 380 | 292 |
Unearned revenue | 2,472 | 2,393 |
Allowance for bad debt | 442 | 167 |
Unrealized gain on foreign exchange translation and others | 789 | 133 |
Section 174 Expenditures | 292 | |
Unrealized gain/ (loss) on LT investment | 33 | |
Other | 4,130 | 3,188 |
Total gross deferred tax assets | 44,539 | 40,576 |
Less valuation allowance | (44,112) | (40,147) |
Net deferred tax assets | $ 427 | $ 429 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Unrealized gain on available-for-sale securities | $ (426) | $ (427) |
Other | (1) | (2) |
Total deferred tax liabilities | $ (427) | $ (429) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance increase (decrease) | $ 4 | $ 2.7 |
General business tax credits | $ 11.8 | 11.4 |
Statutory federal tax rate (in percent) | 21% | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards expiration year | 2037 | |
Business credits expiration year | 2042 | |
Net operating loss carryforwards | $ 66.4 | 62.6 |
State and Local | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards expiration year | 2042 | |
Net operating loss carryforwards | $ 61.2 | $ 57.8 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of effective income tax | ||
Tax benefit at statutory federal rate | $ (2,242) | $ (3,359) |
State taxes, net of federal tax benefit | (453) | (275) |
Increase (decreases) in valuation allowance | 3,964 | 2,722 |
Permanent items | (384) | 1,337 |
General business tax credit | (450) | (902) |
Other | (375) | 502 |
INCOME TAXES (BENEFIT) | $ 60 | $ 25 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 12 Months Ended | |
Dec. 31, 2022 USD ($) ft² | Dec. 31, 2021 USD ($) | |
Leases [Line Items] | ||
Gain (loss) on termination of lease | $ (31,000) | |
Rent expense | 1,100,000 | $ 1,200,000 |
Right of use assets | 2,799,000 | 3,485,000 |
Operating lease liabilities | $ 3,256,000 | $ 4,000,000 |
Weighted average remaining term of leases | 3 years 8 months 12 days | |
Weighted average discount rate | 12.90% | |
Torrance, California [Member] | ||
Leases [Line Items] | ||
Operating lease, leased space | ft² | 21,293 | |
Operating lease, base rental per month | $ 84,272 | |
Operating lease, expiration date | Sep. 30, 2026 | |
Dubai, United Arab Emirates [Member] | ||
Leases [Line Items] | ||
Operating lease, leased space | ft² | 1,163 | |
Operating lease, expiration date | Jun. 19, 2023 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 1,049 | |
2024 | 1,063 | |
2025 | 1,092 | |
2026 and thereafter | 836 | |
Total lease payments | 4,040 | |
Less: Interest | (784) | |
Operating lease liabilities | $ 3,256 | $ 4,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Telcon RF Pharmaceuticals, Inc. ("Telcon") [Member] $ in Millions | Jul. 12, 2017 USD ($) Number | Jun. 12, 2017 USD ($) |
API Supply Agreement [Member] | ||
Proceeds from supply agreement | $ 31.8 | |
API Supply Agreement [Member] | PGLG [Member] | ||
Percentage of right to supply | 25% | |
Agreement term | 15 years | |
Revised API Agreement [Member] | ||
Agreement term | 5 years | |
Number of renewals | Number | 10 | |
Cumulative purchase amount | $ 47 | |
Annual purchase target amount | 5 | |
Target profit | $ 2.5 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | ||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | $ 27,562 | $ 18,007 | |||
Willis Lee [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 12% | 12% | ||
Date of Loan | [1] | Oct. 29, 2020 | Oct. 29, 2020 | ||
Term of Loan | [1] | Due on Demand | Due on Demand | ||
Principal Amount Outstanding | [1] | $ 100 | $ 100 | ||
Highest Principal Outstanding | [1] | $ 100 | $ 100 | ||
Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 12% | 12% | ||
Date of Loan | [2] | Dec. 07, 2021 | Jan. 20, 2021 | ||
Term of Loan | [2] | Due on Demand | Due on Demand | ||
Principal Amount Outstanding | [2] | $ 700 | |||
Highest Principal Outstanding | [2] | $ 700 | $ 700 | ||
Amount of Principal Repaid or Converted into Stock | [2] | 700 | |||
Amount of Interest Paid | [2] | $ 13 | |||
Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 12% | 12% | ||
Date of Loan | [2] | Jan. 18, 2022 | Sep. 15, 2021 | ||
Term of Loan | [2] | Due on Demand | Due on Demand | ||
Highest Principal Outstanding | [2] | $ 300 | $ 300 | ||
Amount of Principal Repaid or Converted into Stock | [2] | 300 | 300 | ||
Amount of Interest Paid | [2] | $ 32 | $ 3 | ||
Yasushi Nagasaki [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 10% | |||
Date of Loan | [1] | Feb. 09, 2022 | |||
Term of Loan | [1] | Due on Demand | |||
Highest Principal Outstanding | [1] | $ 50 | |||
Amount of Principal Repaid or Converted into Stock | [1] | 50 | |||
Amount of Interest Paid | [1] | $ 4 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Feb. 09, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 350 | |||
Highest Principal Outstanding | [2] | $ 350 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Feb. 15, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 210 | |||
Highest Principal Outstanding | [2] | $ 210 | |||
Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | 12% | ||
Date of Loan | [2] | Feb. 15, 2022 | Dec. 07, 2021 | ||
Term of Loan | [2] | Due on Demand | Due on Demand | ||
Principal Amount Outstanding | [2] | $ 100 | $ 700 | ||
Highest Principal Outstanding | [2] | $ 100 | 700 | ||
George Sekulich [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 10% | |||
Date of Loan | [1] | Feb. 16, 2022 | |||
Term of Loan | [1] | Due on Demand | |||
Highest Principal Outstanding | [1] | $ 26 | |||
Amount of Principal Repaid or Converted into Stock | [1] | 26 | |||
Amount of Interest Paid | [1] | $ 2 | |||
Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Mar. 07, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Highest Principal Outstanding | [2] | $ 200 | |||
Amount of Principal Repaid or Converted into Stock | [2] | 200 | |||
Amount of Interest Paid | [2] | $ 15 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 12% | |||
Date of Loan | [2] | Mar. 15, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 150 | |||
Highest Principal Outstanding | [2] | $ 150 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 12% | |||
Date of Loan | [2] | Mar. 30, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 150 | |||
Highest Principal Outstanding | [2] | $ 150 | |||
Wei Peu Derek Zen [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 10% | |||
Date of Loan | [1] | Mar. 31, 2022 | |||
Term of Loan | [1] | Due on Demand | |||
Principal Amount Outstanding | [1] | $ 200 | |||
Highest Principal Outstanding | [1] | $ 200 | |||
Willis Lee [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 10% | |||
Date of Loan | [1] | Apr. 14, 2022 | |||
Term of Loan | [1] | Due on Demand | |||
Principal Amount Outstanding | [1] | $ 45 | |||
Highest Principal Outstanding | [1] | $ 45 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | May 25, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 40 | |||
Highest Principal Outstanding | [2] | $ 40 | |||
Yutaka and Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 12% | |||
Date of Loan | [2] | Jul. 27, 2022 | |||
Term of Loan | [2] | 5 years | |||
Principal Amount Outstanding | [2] | $ 402 | |||
Highest Principal Outstanding | [2] | 402 | |||
Amount of Interest Paid | [2] | $ 20 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Aug. 15, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 50 | |||
Highest Principal Outstanding | [2] | $ 50 | |||
Yutaka and Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Aug. 16, 2022 | |||
Term of Loan | [2] | 5 years | |||
Principal Amount Outstanding | [2] | $ 250 | |||
Highest Principal Outstanding | [2] | 250 | |||
Amount of Interest Paid | [2] | $ 8 | |||
Yutaka and Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Aug. 16, 2022 | |||
Term of Loan | [2] | 5 years | |||
Principal Amount Outstanding | [2] | $ 1,669 | |||
Highest Principal Outstanding | [2] | 1,669 | |||
Amount of Interest Paid | [2] | $ 56 | |||
Hope International Hospice, Inc. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Aug. 17, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 50 | |||
Highest Principal Outstanding | [2] | $ 50 | |||
Yutaka and Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 10% | |||
Date of Loan | [2] | Aug. 17, 2022 | |||
Term of Loan | [2] | Due on Demand | |||
Principal Amount Outstanding | [2] | $ 60 | |||
Highest Principal Outstanding | [2] | $ 60 | |||
Seah Lim [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 6% | |||
Date of Loan | [1] | Sep. 16, 2022 | |||
Term of Loan | [1] | 3 years | |||
Principal Amount Outstanding | [1] | $ 1,200 | |||
Highest Principal Outstanding | [1] | $ 1,200 | |||
Hope International Hospice, Inc. | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10% | ||||
Date of Loan | Oct. 20, 2022 | ||||
Term of Loan | Due on Demand | ||||
Principal Amount Outstanding | $ 100 | ||||
Highest Principal Outstanding | 100 | ||||
Promissory note payable to related parties [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | 5,826 | 800 | |||
Highest Principal Outstanding | 6,402 | 1,800 | |||
Amount of Principal Repaid or Converted into Stock | 576 | 1,000 | |||
Amount of Interest Paid | 137 | 16 | |||
Promissory note payable and Revolving line of credit [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | 5,826 | 1,200 | |||
Highest Principal Outstanding | 6,802 | 2,600 | |||
Amount of Principal Repaid or Converted into Stock | 576 | 1,400 | |||
Amount of Interest Paid | $ 247 | $ 51 | |||
Yutaka Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 5.25% | [1],[3] | 5.25% | [2] | |
Date of Loan | Dec. 27, 2019 | [1] | Dec. 27, 2019 | [2] | |
Term of Loan | Due on Demand | [1] | Due on Demand | [2] | |
Principal Amount Outstanding | [2] | $ 400 | |||
Highest Principal Outstanding | $ 400 | [1] | 800 | [2] | |
Amount of Principal Repaid or Converted into Stock | [2] | 400 | |||
Amount of Interest Paid | 110 | [1] | 35 | [2] | |
Revolving Line of Credit Facility [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | 400 | ||||
Highest Principal Outstanding | 400 | 800 | |||
Amount of Principal Repaid or Converted into Stock | 400 | ||||
Amount of Interest Paid | $ 110 | $ 35 | |||
[1] (2) Officer or director. (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also a director and the Chief Executive Officer of Hope International Hospice, Inc. (3) The rate varies with changes in the prime rate and does not give effect to the “tax gross-up” described in Note 7. |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) $ in Millions, ₩ in Billions | 12 Months Ended | |||
Sep. 28, 2020 | Dec. 31, 2022 KRW (₩) shares | Dec. 31, 2022 USD ($) shares | Oct. 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Secured debt percentage | 1% | |||
Telcon, Inc. ("Telcon") [Member] | ||||
Related Party Transaction [Line Items] | ||||
Marketable securities common stock outstanding | 4,147,491 | 4,147,491 | ||
Percentage of marketable securities common stock outstanding | 8.40% | 8.40% | ||
Convertible notes payable, carrying amount | ₩ 26.5 | $ 21 | ||
Convertible bond maturity date | Oct. 16, 2030 | Oct. 16, 2030 | ||
Secured debt percentage | 2.10% | 2.10% | 2.10% |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Maximum eligible annual compensation percent | 90% | |
Company matching percentage of employee contributions | 50% | |
Company matching contributions to 401(k) plans | $ 74,000 | $ 91,000 |
Maximum [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Participant's annual compensation percentage | 4% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 12 Months Ended | ||
Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||
Net proceeds from related party loans | $ 3,900,000 | $ 1,700,000 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Net proceeds in exchange for issuance of convertible promissory note | $ 1,000,000 | ||
Net proceeds from related party loans | 227,000 | ||
Net proceeds from third party loans | 500,000 | ||
Subsequent Event [Member] | Emmaus Medical [Member] | |||
Subsequent Event [Line Items] | |||
Subsidiary received net proceeds | 984,125 | ||
Net proceeds from sale and assignment to third parties | $ 1,400,424 |