Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 11, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | Emmaus Life Sciences, Inc. | |
Entity Central Index Key | 0000822370 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | 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 Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 48,471,446 | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | EMMA | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Common Stock Purchase Warrants [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | EMMAW | |
Title of 12(b) Security | Common Stock Purchase Warrants |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents ($12,220 and $13,175 attributable to the VIE) | $ 13,546 | $ 17,080 |
Accounts receivable, net | 1,900 | 1,351 |
Inventories, net | 7,491 | 4,705 |
Investment in marketable securities | 27,643 | 49,343 |
Marketable securities, pledged to creditor | 238 | |
Prepaid expenses and other current assets ($610 and $273 attributable to the VIE) | 1,194 | 743 |
Total current assets | 51,774 | 73,460 |
PROPERTY AND EQUIPMENT, NET | 163 | 152 |
OTHER ASSETS | ||
Long-term investment at cost | 538 | |
Intangibles, net | 44 | 54 |
Right of use assets | 4,118 | |
Deposits and other assets | 383 | 352 |
Total other assets | 4,545 | 944 |
Total assets | 56,482 | 74,556 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses ($148 and $0 attributable to the VIE) | 10,706 | 9,122 |
Deferred rent | 19 | |
Operating lease liabilities | 844 | |
Other current liabilities | 5,412 | 5,181 |
Embedded conversion option liabilities | 264 | |
Notes payable, net | 3,886 | 6,394 |
Notes payable to related party, net | 193 | 468 |
Convertible debentures | 11,000 | |
Convertible notes payable, net | 2,928 | 11,253 |
Convertible notes payable to related parties, net | 5,089 | |
Total current liabilities | 35,233 | 37,526 |
LONG-TERM LIABILITIES | ||
Deferred rent | 268 | |
Operating lease liabilities | 3,714 | |
Other long-term liabilities | 34,556 | 36,222 |
Warrant derivative liabilities | 1,399 | |
Embedded conversion option liabilities | 29 | |
Notes payable, net | 1,021 | |
Convertible debentures | 1,200 | |
Convertible notes payable, net | 5,485 | |
Convertible notes payable to related parties, net | 8,529 | |
Total long-term liabilities | 39,499 | 52,924 |
Total liabilities | 74,732 | 90,450 |
STOCKHOLDERS’ DEFICIT | ||
Preferred stock — par value $0.001 per share, 15,000,000 shares authorized, none issued and outstanding | ||
Common stock — par value $0.001 per share, 250,000,000 shares authorized, 47,671,446 shares and 37,341,393 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 47 | 37 |
Additional paid-in capital | 199,395 | 140,903 |
Accumulated other comprehensive income (loss) | (51) | (69) |
Accumulated deficit | (216,916) | (156,668) |
Total stockholders’ equity (deficit) | (17,525) | (15,797) |
Noncontrolling interest | (725) | (97) |
Total liabilities & stockholders’ equity (deficit) | $ 56,482 | $ 74,556 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
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 | 47,671,446 | 37,341,393 |
Common stock, outstanding | 47,671,446 | 37,341,393 |
Cash and cash equivalents | $ 13,546 | $ 17,080 |
Prepaid expenses and other current assets | 1,194 | 743 |
Accounts payable and accrued expenses | 10,706 | 9,122 |
Variable Interest Entity [Member] | ||
Cash and cash equivalents | 12,220 | 13,175 |
Prepaid expenses and other current assets | 610 | 273 |
Accounts payable and accrued expenses | $ 148 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
REVENUES, NET | $ 6,084 | $ 4,882 | $ 17,260 | $ 8,235 |
COST OF GOODS SOLD | 178 | 141 | 573 | 497 |
GROSS PROFIT | 5,906 | 4,741 | 16,687 | 7,738 |
OPERATING EXPENSES | ||||
Research and development | 725 | 466 | 1,778 | 1,273 |
Selling | 1,789 | 1,224 | 5,177 | 3,663 |
General and administrative | 6,991 | 5,182 | 14,523 | 12,130 |
Total operating expenses | 9,505 | 6,872 | 21,478 | 17,066 |
LOSS FROM OPERATIONS | (3,599) | (2,131) | (4,791) | (9,328) |
OTHER INCOME (EXPENSE) | ||||
Other income | 738 | 738 | ||
Loss on debt extinguishment | (6,427) | (6,427) | (3,245) | |
Impairment loss on long-term investment | (524) | |||
Change in fair value of warrant derivative liabilities | 424 | 19,456 | 623 | 20,351 |
Change in fair value of embedded conversion option | 342 | 342 | 466 | |
Net loss on investment in marketable securities | (5,248) | 2,023 | (21,718) | (31,627) |
Transaction cost | (309) | (309) | ||
Notes conversion expense | (3,906) | (3,906) | ||
Interest and other income (loss) | (17) | 8 | 146 | 43 |
Interest expense | (7,318) | (5,525) | (22,757) | (16,269) |
Total other income (expense) | (22,459) | 16,700 | (54,530) | (29,543) |
INCOME (LOSS) BEFORE INCOME TAXES | (26,058) | 14,569 | (59,321) | (38,871) |
INCOME TAXES | 25 | 242 | 2 | |
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST | (26,083) | 14,569 | (59,563) | (38,873) |
Net (income) loss attributable to noncontrolling interest | (54) | 620 | ||
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | (26,137) | 14,569 | (58,943) | (38,873) |
COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation adjustments | 11 | (5) | 10 | 11 |
Other comprehensive income (loss) | 11 | (5) | 10 | 11 |
COMPREHENSIVE INCOME (LOSS) | (26,072) | 14,564 | (59,553) | (38,862) |
Amounts attributable to noncontrolling interest: | ||||
Net (income) loss attributable to noncontrolling interest | (54) | 620 | ||
Foreign currency translation adjustments | (6) | 8 | ||
Comprehensive (income) loss attributable to noncontrolling interest | (60) | 628 | ||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ (26,132) | $ 14,564 | $ (58,925) | $ (38,862) |
NET INCOME (LOSS) PER COMMON SHARE - BASIC | $ (0.60) | $ 0.40 | $ (1.49) | $ (1.06) |
NET INCOME (LOSS) PER COMMON SHARE - DILUTIVE | $ (0.60) | $ (0.13) | $ (1.49) | $ (1.58) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | 46,020,507 | 36,719,892 | 40,474,847 | 36,644,377 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasure Stock, at cost [Member] | Accumulated Deficit [Member] | Total Emmaus Stockholders' Equity / Deficit [Member] | Non-controlling Interest [Member] |
Balance, beginning at Dec. 31, 2017 | $ 14,291 | $ 37 | $ 113,110 | $ 41,276 | $ (140,132) | $ 14,291 | ||
Balance, beginning (in shares) at Dec. 31, 2017 | 36,634,856 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect adjustment on adoption | ASU 2016-01 [Member] | (41,362) | 41,362 | ||||||
Beneficial conversion feature relating to convertible notes payable | 3,638 | 3,638 | 3,638 | |||||
Common stock issued for cash (net of issuance cost) | 275 | 275 | 275 | |||||
Common stock issued for cash (net of issuance cost) (in shares) | 26,254 | |||||||
Repurchase of stock | (1,314) | $ (1,314) | (1,314) | |||||
Share-based compensation | 710 | 710 | 710 | |||||
Foreign currency translation effect | 14 | 14 | 14 | |||||
Net income (loss) | (6,097) | (6,097) | (6,097) | |||||
Balance, ending at Mar. 31, 2018 | 11,517 | $ 37 | 117,733 | (72) | (1,314) | (104,867) | 11,517 | |
Balance, ending (in shares) at Mar. 31, 2018 | 36,661,110 | |||||||
Balance, beginning at Dec. 31, 2017 | 14,291 | $ 37 | 113,110 | 41,276 | (140,132) | 14,291 | ||
Balance, beginning (in shares) at Dec. 31, 2017 | 36,634,856 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Foreign currency translation effect | 11 | |||||||
Net income (loss) | (38,873) | |||||||
Balance, ending at Sep. 30, 2018 | (11,544) | $ 38 | 126,136 | (75) | (137,643) | (11,544) | ||
Balance, ending (in shares) at Sep. 30, 2018 | 37,755,675 | |||||||
Balance, beginning at Dec. 31, 2017 | 14,291 | $ 37 | 113,110 | 41,276 | (140,132) | 14,291 | ||
Balance, beginning (in shares) at Dec. 31, 2017 | 36,634,856 | |||||||
Balance, ending at Dec. 31, 2018 | (15,894) | $ 37 | 140,903 | (69) | (156,668) | (15,797) | $ (97) | |
Balance, ending (in shares) at Dec. 31, 2018 | 37,341,393 | |||||||
Balance, beginning at Mar. 31, 2018 | 11,517 | $ 37 | 117,733 | (72) | (1,314) | (104,867) | 11,517 | |
Balance, beginning (in shares) at Mar. 31, 2018 | 36,661,110 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beneficial conversion feature relating to convertible notes payable | 5,583 | 5,583 | 5,583 | |||||
Repurchase of stock | $ (1) | 1 | ||||||
Repurchase of stock (in shares) | (735,102) | |||||||
Share-based compensation | 955 | 955 | 955 | |||||
Exercise of warrants (cashless) (in shares) | 8,733 | |||||||
Foreign currency translation effect | 2 | 2 | 2 | |||||
Net income (loss) | (47,345) | (47,345) | (47,345) | |||||
Balance, ending at Jun. 30, 2018 | (29,288) | $ 36 | 124,272 | (70) | (1,314) | (152,212) | (29,288) | |
Balance, ending (in shares) at Jun. 30, 2018 | 35,934,741 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beneficial conversion feature relating to convertible notes payable | 997 | 997 | 997 | |||||
Exercise of warrants | 105 | 105 | 105 | |||||
Exercise of warrants (in Shares) | 31,504 | |||||||
Cancellation of stock | (1,314) | $ 1,314 | ||||||
Share-based compensation | 2,078 | 2,078 | 2,078 | |||||
Exercise of stock option (cashless) | $ 1 | (1) | ||||||
Exercise of stock option (cashless) (in shares) | 88,473 | |||||||
Exercise of warrants (cashless) | $ 1 | (1) | ||||||
Exercise of warrants (cashless) (in shares) | 1,700,957 | |||||||
Foreign currency translation effect | (5) | (5) | (5) | |||||
Net income (loss) | 14,569 | 14,569 | 14,569 | |||||
Balance, ending at Sep. 30, 2018 | (11,544) | $ 38 | 126,136 | (75) | (137,643) | (11,544) | ||
Balance, ending (in shares) at Sep. 30, 2018 | 37,755,675 | |||||||
Balance, beginning at Dec. 31, 2018 | (15,894) | $ 37 | 140,903 | (69) | (156,668) | (15,797) | (97) | |
Balance, beginning (in shares) at Dec. 31, 2018 | 37,341,393 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect adjustment on adoption | ASC 842 [Member] | (29) | (29) | (29) | |||||
Beneficial conversion feature relating to convertible notes payable | 2,039 | 2,039 | 2,039 | |||||
Exercise of warrants | 5 | 5 | 5 | |||||
Exercise of warrants (in Shares) | 525 | |||||||
Common stock issued for cash (net of issuance cost) | 2,530 | 2,530 | 2,530 | |||||
Common stock issued for cash (net of issuance cost) (in shares) | 322,920 | |||||||
Conversion of convertible notes payable and notes payable to common stock | 329 | 329 | 329 | |||||
Conversion of convertible notes payable and notes payable to common stock (in shares) | 85,410 | |||||||
Share-based compensation | 536 | 536 | 536 | |||||
Exercise of stock options | 1 | 1 | 1 | |||||
Exercise of stock options (in shares) | 175 | |||||||
Foreign currency translation effect | 8 | 7 | 7 | 1 | ||||
Net income (loss) | (14,153) | (14,167) | (14,167) | 14 | ||||
Balance, ending at Mar. 31, 2019 | (24,628) | $ 37 | 146,343 | (62) | (170,864) | (24,546) | (82) | |
Balance, ending (in shares) at Mar. 31, 2019 | 37,750,423 | |||||||
Balance, beginning at Dec. 31, 2018 | (15,894) | $ 37 | 140,903 | (69) | (156,668) | (15,797) | (97) | |
Balance, beginning (in shares) at Dec. 31, 2018 | 37,341,393 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect adjustment on adoption | ASU 2016-01 [Member] | 41,400 | |||||||
Foreign currency translation effect | 10 | |||||||
Net income (loss) | (59,563) | |||||||
Balance, ending at Sep. 30, 2019 | (18,250) | $ 47 | 199,395 | (51) | (216,916) | (17,525) | (725) | |
Balance, ending (in shares) at Sep. 30, 2019 | 47,671,446 | |||||||
Balance, beginning at Mar. 31, 2019 | (24,628) | $ 37 | 146,343 | (62) | (170,864) | (24,546) | (82) | |
Balance, beginning (in shares) at Mar. 31, 2019 | 37,750,423 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beneficial conversion feature relating to convertible notes payable | 5,391 | 5,391 | 5,391 | |||||
Exercise of warrants | 181 | 181 | 181 | |||||
Exercise of warrants (in Shares) | 53,032 | |||||||
Common stock issued for cash (net of issuance cost) | 730 | 730 | 730 | |||||
Common stock issued for cash (net of issuance cost) (in shares) | 76,755 | |||||||
Share-based compensation | 438 | 438 | 438 | |||||
Foreign currency translation effect | (9) | 6 | 6 | (15) | ||||
Net income (loss) | (19,327) | (18,639) | (18,639) | (688) | ||||
Balance, ending at Jun. 30, 2019 | (37,224) | $ 37 | 153,083 | (56) | (189,503) | (36,439) | (785) | |
Balance, ending (in shares) at Jun. 30, 2019 | 37,880,210 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for cash (net of issuance cost) | 2,950 | $ 1 | 2,949 | 2,950 | ||||
Common stock issued for cash (net of issuance cost) (in shares) | 477,338 | |||||||
Conversion of convertible notes payable and notes payable to common stock | 35,509 | $ 7 | 35,502 | 35,509 | ||||
Conversion of convertible notes payable and notes payable to common stock (in shares) | 6,983,350 | |||||||
Notes conversion expense | 3,906 | 3,906 | 3,906 | |||||
Reclassification of warrant liability to equity | 776 | 776 | 776 | |||||
Common stock issued in merger | (1,642) | $ 2 | (1,644) | (1,642) | ||||
Common stock issued in merger ( in shares) | 2,330,548 | |||||||
Share-based compensation | 129 | 129 | 129 | |||||
Fair value of replacement equity awards | 2,438 | 2,438 | 2,438 | |||||
Fair value of placement agent warrant including down-round protection adjustments | 980 | 2,256 | (1,276) | 980 | ||||
Foreign currency translation effect | 11 | 5 | 5 | 6 | ||||
Net income (loss) | (26,083) | (26,137) | (26,137) | 54 | ||||
Balance, ending at Sep. 30, 2019 | $ (18,250) | $ 47 | $ 199,395 | $ (51) | $ (216,916) | $ (17,525) | $ (725) | |
Balance, ending (in shares) at Sep. 30, 2019 | 47,671,446 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (59,563) | $ (38,873) |
Adjustments to reconcile net loss to net cash flows from operating activities | ||
Depreciation and amortization | 54 | 44 |
Impairment loss on long-term investment | 524 | |
Cost of inventory written off | 11 | |
Amortization of discount of notes payable and convertible notes payable | 19,479 | 13,057 |
Foreign exchange adjustments on convertible notes and notes payable | 49 | (22) |
Net loss on investment in marketable securities | 21,718 | 31,627 |
Loss on debt settlement | 6,427 | 3,245 |
Share-based compensation | 1,103 | 3,743 |
Fair value of replacement equity awards | 2,438 | |
Notes conversion expense | 3,906 | |
Change in fair value of warrant derivative liabilities | (623) | (20,351) |
Change in fair value of embedded conversion option | (342) | (466) |
Net changes in operating assets and liabilities | ||
Accounts receivable | (548) | (1,390) |
Inventories | (2,787) | (2,735) |
Prepaid expenses and other current assets | (426) | (39) |
Other non-current assets | (4,150) | (238) |
Accounts payable and accrued expenses | 4,857 | 2,585 |
Deferred revenue | 500 | |
Deferred rent | (287) | 246 |
Other current liabilities | 230 | 2,130 |
Other long-term liabilities | 2,363 | 2,690 |
Net cash flows used in operating activities | (5,078) | (4,736) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid in connection with the Merger | (1,641) | |
Purchases of property and equipment | (55) | (81) |
Sales of marketable securities | 221 | 6,439 |
Purchase of marketable securities and investment at cost | (501) | |
Net cash flows provided by (used in) investing activities | (1,475) | 5,857 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repurchase of common stock and warrants | (7,500) | |
Proceeds from notes payable issued, net of issuance cost and discount | 6,670 | |
Proceeds from convertible notes payable issued, net of issuance cost and discount | 17,645 | |
Payments of notes payable | (4,200) | |
Payments of convertible notes | (3,368) | (20,000) |
Proceeds from exercise of warrants | 186 | 105 |
Proceeds from issuance of common stock | 6,210 | 275 |
Net cash flows provided by (used in) financing activities | 3,028 | (7,005) |
Effect of exchange rate changes on cash | (9) | (10) |
Net decrease in cash and cash equivalents | (3,534) | (5,894) |
Cash and cash equivalents, beginning of period | 17,080 | 22,556 |
Cash and cash equivalents, end of period | 13,546 | 16,662 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES | ||
Interest paid | 1,239 | 1,783 |
Income taxes paid | 242 | 2 |
Warrant liabilities reclassified to equity | 776 | |
Conversion of convertible notes payable and notes payable to common stock | 33,457 | |
Conversion of accrued interest payable to common stock | $ 2,381 | |
Exercise of warrants and options on cashless basis | $ 1,798 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 — BASIS OF PRESENTATION The accompanying unaudited consolidated interim financial statements of Emmaus Life Sciences, Inc., (formerly, “MYnd Analytics, Inc.”) and its direct and indirect consolidated subsidiaries (collectively, the “Company” or “Emmaus”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) on the basis that the Company will continue as a going concern. All significant intercompany transactions have been eliminated. The Company’s unaudited consolidated interim financial statements contain adjustments, including normal recurring accruals necessary to fairly state the Company’s consolidated financial position, results of operations and cash flows. The consolidated interim financial statements do not include any adjustments that might result from the outcome of these uncertainties. The consolidated interim financial statements should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2018, filed by EMI Holding, Inc. with the Securities and Exchange Commission (“SEC”) on March 21, 2019 (the “Annual Report”). Interim results for the periods presented herein are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. Going Concern Assessment In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. Based on our loss to date, anticipated future revenues and operating expenses, debt repayment obligations and cash and cash equivalent of $13.5 million, of which $12.2 million was attributable to a variable interest entity (“VIE”) as of September 30, 2019, we do not have sufficient operating capital for our business without raising additional capital and therefore there is substantial doubt about the Company’s ability to continue as a going concern. Organization and Nature of Operations As of and for the period ending June 30, 2019, Emmaus Life Sciences, Inc. (“Emmaus,” “we,” “us,” “our,” or the “Company”), formerly known as MYnd Analytics, Inc., was a predictive analytics company that had developed a decision support tool to help physicians reduce trial and error treatment in mental health and provide more personalized care to patients. On July 17, 2019, the Company completed its merger transaction with EMI Holding, Inc., formerly known as Emmaus Life Sciences, Inc. (“EMI”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of January 4, 2019, among the Company, Athena Merger Subsidiary, Inc. (“Merger Sub”), and Emmaus, as amended by Amendment No. 1 thereto, dated as of May 10, 2019 (as so amended, the “Merger Agreement”), pursuant to which Merger Sub merged with and into EMI, with EMI surviving as a wholly-owned subsidiary of the Company (the “Merger”). On July 17, 2019, immediately after completion of the Merger, the Company changed its name to “Emmaus Life Sciences, Inc.”. The Merger was treated as a reverse recapitalization with EMI being deemed the acquiring company for accounting purposes under the acquisition method of accounting in accordance with accounting principles generally accepted in the United States. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. In connection with and prior to the Merger, the Company contributed and transferred to Telemynd, Inc. (“Telemynd”), a newly formed, wholly owned subsidiary of the Company, all or substantially all of the Company’s business, assets and liabilities pursuant to the Amended and Restated Separation and Distribution Agreement, dated as of March 27, 2019, among the Company, Telemynd and MYnd Analytics, Inc., a wholly owned subsidiary of the Company (the “Separation Agreement”). On July 15, 2019, the board of directors of the Company declared a dividend with respect to the shares of the Company common stock outstanding at the close of business on that day of one share of the Telemynd common stock held by the Company for each outstanding share of the Company common stock after giving effect to the reverse split described below. The dividend, which together with the contribution and transfer of MYnd’s business, assets and liabilities described above, is referred to as the “Spin-Off.” Prior to the Spin-Off, Telemynd engaged in no business or operations. On July 17, 2019, in connection with, and prior to the completion of, the Merger, the Company effected a 1-for-6 reverse split (the “Reverse Split”) of its outstanding shares of common stock, par value $0.001 per share. As a result of the Spin-Off and the Merger, since July 17, 2019 the Company has operated through EMI and its direct and indirect subsidiaries and the ongoing business of the Company is the EMI 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. As the acquiring company for accounting purposes, financial condition and results of operations of the Company reflected in the accompanying unaudited consolidated interim financial statements for periods prior to the Merger are those of EMI. . Principles of consolidation —The consolidated financial statements include the accounts of the Company, EMI and EMI’s wholly‑owned subsidiary, Emmaus Medical, Inc. and Emmaus Medical, Inc.’s wholly‑owned subsidiaries, Newfield Nutrition Corp., Emmaus Medical Japan, Inc. (“EMJ”), Emmaus Life Sciences, Co. Ltd (“ELSK”) and Emmaus Medical Europe, Ltd (“EM Europe”). All significant intercompany transactions have been eliminated. The Company also consolidates EJ Holdings, Inc., a Japanese corporation, as a variable interest entity (VIE) on the basis that the Company is an indirect 40% shareholder and the primary beneficiary of the VIE. The Company is deemed to be the primary beneficiary of the VIE if it has both (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (b) The preparation of the consolidated financial statements requires the use of management estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reported period. Actual results could differ materially from those estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Refer to the Annual Report for a summary of significant accounting policies. There have been no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2019 except for leases, which are discussed below. Below are disclosures of certain interim balances, transactions, and significant assumptions used in computing fair value as of and for the three and nine months ended September 30, 2019 and comparative amounts from the prior fiscal periods: Revenues – Effective January 1, 2018, the Company adopted Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers using the modified retrospective transition method. The adoption of ASC 606 did not have a material impact on the measurement or on the recognition of revenue of contracts for which all revenue had not been recognized as of January 1, 2018, therefore no cumulative adjustment has been made to the opening balance of accumulated deficit at the beginning of 2018. The Company generates revenues through the sale of Endari® as a treatment for sickle cell disease (“SCD”) and to a much lesser extent from the sale of AminoPure®, a nutritional supplement. Revenues from Endari® product sales are recognized upon delivery and transfer of control of products to the Company’s distributors and specialty pharmacy customers. Distributors resell the products to other specialty pharmacy providers, health care providers, hospitals, patients and clinics. In addition to distribution agreements with distributors, the Company enters into contractual arrangements with specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities that provide for government-mandated or privately negotiated rebates, chargebacks and discounts with respect to the purchase of our products. These various discounts, rebates, and chargebacks are referred to as “variable consideration.” Revenues from product sales are recorded net of variable consideration. Prior to recognizing revenues, the Company’s management forecasts and estimates variable consideration. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Provisions for returns and other variable consideration adjustments are provided for in the period in which the related revenues are recorded. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. The following are our significant categories of variable consideration: Sales Discounts and Allowances: The Company provides its customers contractual prompt payment discounts and from time to time offers additional one-time discounts that are recorded as a reduction of revenues in the period the revenues are recognized. Product Returns: The Company offers its distributors a right to return product purchased directly from the Company based principally 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. The Company’s 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 accounts payable and accrued expenses in our balance sheet. The liability for these rebates consists primarily of estimates of claims expected to be received in future periods related to the 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 and pharmacy benefit management 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. 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. — As described below under "Recent accounting pronouncements,” we adopted ASU 2016-02 – Leases (Topic 842) (“ASU 2016-02”) as of January 1, 2019. Pursuant to ASU 2016-02, all of Prior to our adoption of ASU 2016-02, when our lease agreements contained tenant improvement allowances and rent escalation clauses, we recorded a deferred rent asset or liability equal to the difference between the rent expense and the future minimum lease payments due. The lease expense related to operating leases was recognized on a straight-line basis in the statements of operations over the term of each lease. In cases where the lessor granted us leasehold improvement allowances, we capitalized the improvements as incurred and recognized it over the shorter of the lease term or the expected useful life of the improvements. Inventories — Substantially, all the raw material purchased during the three and nine months ended September 30, 2019 and the year ended December 31, 2018 were from one vendor. The below table presents inventory by category (in thousands): September 30, 2019 December 31, 2018 Raw materials and components $ 1,089 $ 171 Work-in-process 2,392 2,471 Finished goods 4,010 2,063 Total $ 7,491 $ 4,705 Marketable securities — The Company’s marketable securities as of December 31, 2018 consisted of the following; (a) 39,250 shares of capital stock of CellSeed, Inc., a Japanese Corporation (“CellSeed”) acquired in January 2009 at ¥680 JPY per share ($7.69 USD), which shares were sold in June 2019 for cash proceeds of approximately $221,000; and (b) 6,643,559 shares of capital stock of Telcon RF Pharmaceutical, Inc., a Korean corporation (formerly, Telcon Inc. and herein “Telcon”), which were acquired in July 2017 for ₩36,001,446,221 KRW (equivalent to $31.8 million USD) at ₩5,419 KRW per share. As of September 30, 2019 and December 31, 2018, the closing prices per Telcon share on the Korean Securities Dealers Automated Quotations (“KOSDAQ”) were ₩4,995 ($4.16 USD) and ₩8,280 KRW ($7.43 USD), respectively. As of December 31, 2018, the closing price per CellSeed share on the Tokyo Stock Exchange was ¥668 JPY ($6.07 USD). As of September 30, 2019 and December 31, 2018, all shares of Telcon common stock were pledged to secure our obligations under the revised API agreement with Telcon. As of December 31, 2018, the 39,250 shares of CellSeed common stock were pledged to secure a $300,000 convertible note of the Company issued to Mitsubishi UFJ Capital III Limited Partnership that was due on demand and were classified as marketable securities, pledged to creditor in our balance sheet. During the nine months ended September 30, 2019, the Company repaid the convertible notes. Prepaid expenses and other current assets — Prepaid expenses and other current assets consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Prepaid insurance $ 427 $ 82 Other prepaid expenses and current assets 767 661 $ 1,194 $ 743 Other long-term liabilities —Other long-term liabilities consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Trade discount $ 24,052 $ 26,222 Unearned revenue 10,500 10,000 Other long-term liabilities 4 — Total other long-term liabilities $ 34,556 $ 36,222 On June 12, 2017, the Company entered into an API Supply Agreement with Telcon pursuant to which Telcon advanced to the Company approximately ₩36.0 billion KRW (approximately $31.8 million USD) in consideration for the right to supply 25% of the Company’s requirements for bulk containers of pharmaceutical grade L-glutamine (“PGLG”). The advance was accounted for a trade discount. See Note 10 for additional details. Fair value measurements — The following table presents the change in fair value of warrant derivative liabilities on a recurring basis using Level 3 inputs during the year ended December 31, 2018 (in thousands): Year Ended Warrant Derivative Liabilities—Stock Purchase Warrants December 31, 2018 Balance, beginning of period $ 26,377 Repurchased (6,186 ) Change in fair value included in the statement of comprehensive income (loss) (20,191 ) Balance, end of period $ — The following table presents the change in fair value of warrants issued to GPB Debt Holdings II, LLC as described in Note 8 as of September 30, 2019 and December 31, 2018 (in thousands): Nine Months Ended Year Ended September 30, 2019 December 31, 2018 Warrant Derivative Liabilities—GPB Warrants Embedded Conversion Option Warrants Embedded Conversion Option Balance, beginning of period $ 1,399 $ — $ 1,882 $ 1,289 Change in fair value included in the statement of comprehensive income (loss) (623 ) — (483 ) (466 ) Extinguished upon debt repayment — — — (823 ) Reclassification to equity (776 ) Balance, end of period $ — $ — $ 1,399 $ — The value of warrant derivative liabilities and the change in fair value of the warrant derivative liabilities were determined using a Binomial Monte-Carlo Cliquet Option Pricing Model. The model is similar to traditional Black-Scholes-type option pricing models, except that the exercise price resets at certain dates in the future. In connection with the Merger, the variable exercise price was fixed, and the warrants were reclassified to equity. The value as of the dates set forth in the table above was based on upon following assumptions: July 17, 2019 December 31, 2018 Stock price $ 7.02 $ 9.10 Risk‑free interest rate 1.81 % 2.48 % Expected volatility (peer group) 70.00 % 70.00 % Expected life (in years) 3.96 4.00 Expected dividend yield — — Number outstanding 252,802 240,764 Balance, end of period: Warrant derivative liabilities (long-term) (in thousands) $ 776 $ 1,399 The embedded conversion option in our 10% senior secured convertible debentures is separately accounted at fair value as a derivative liability under the guidance in ASC 815 as of September 30, 2019 and any changes in the fair value of the embedded conversion option are recognized in earnings. The following table sets forth the fair value of the embedded conversion option measured as of September 30, 2019: Nine Months Ended Embedded Conversion Option Liabilities—10% Secured Senior Debentures September 30, 2019 Balance, beginning of period $ — Fair value at issuance date $ 635 Change in fair value included in the statement of comprehensive income (loss) (342 ) Balance, end of period $ 293 The value and the change in fair value of embedded conversion option liabilities were determined using a binomial 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. The values as of September 30, 2019 and as of the Merger date were based upon following assumptions: September 30, 2019 July 17, 2019 Conversion price $ 9.52 $ 10.00 Risk‑free interest rate 1.74 % 1.92 % Expected volatility (peer group) 60.00 % 55.00 % Expected life (in years) 1.06 1.26 Expected dividend yield — — Balance, end of period: Embedded conversion option liabilities (in thousands) $ 293 $ 635 Net loss per share — As of September 30, 2019 and 2018, the Company had outstanding potentially dilutive securities exercisable for or convertible into 13,458,185 and 16,053,511 shares of Company common stock, respectively. No potentially dilutive securities were included in the calculation of diluted net loss per share since their effect would be anti-dilutive for the period ended September 30, 2019. Recent accounting pronouncements — In June 2016, the FASB issued ASU 2016-13—Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which represents a new credit loss standard that will change the impairment model for most financial assets and certain other financial instruments. Specifically, this guidance will require entities to utilize a new “expected loss” model as it relates to trade and other receivables. In addition, entities will be required to recognize an allowance for estimated credit losses on available-for-sale debt securities, regardless of the length of time that a security has been in an unrealized loss position. This guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this new standard on our financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement accompanying footnote disclosures In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810) Targeted Improvements to Related Party guidance for Variable Interest Entities (“ASU 2018-17”) Interest Held Through Related Parties That Are Under Common Control. |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
REVENUES | NOTE 3 — REVENUES Revenues disaggregated by category were as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 2018 2019 2018 Endari® $ 5,994 $ 4,803 $ 16,960 $ 7,863 Other 90 $ 79 300 372 Revenues, net 6,084 4,882 17,260 8,235 The following table summarizes the revenue allowance and accrual activities for the nine months ended September 30, 2019 (in thousands): Trade Discounts, Allowances and Chargebacks Government Rebates and Other Incentives Returns Total Balance as of December 31, 2018 $ 303 $ 1,880 $ 181 $ 2,364 Provision related to sales in the current year 1,039 2,368 190 3,597 Adjustments related prior period sales (218 ) (1,082 ) — (1,300 ) Credit and payments made (866 ) (1,816 ) — (2,682 ) Balance as of September 30, 2019 $ 258 $ 1,350 $ 371 $ 1,979 The following table summarizes revenues attributable to each of our customers who accounted for 10% or more of our total revenues (as a percentage of total revenues): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 2018 2019 2018 AmerisourceBergen Specialty Group 62 % 90 % 60 % 88 % McKesson Plasma and Biologics LLC 22 % 4 % 21 % 3 % |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 — PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): September 30, 2019 December 31, 2018 Equipment $ 333 $ 306 Leasehold improvements 82 70 Furniture and fixtures 95 79 Total property and equipment 510 455 Less: accumulated depreciation (347 ) (303 ) Property and equipment, net $ 163 $ 152 During the three months ended September 30, 2019 and 2018, depreciation expense was approximately $16,000 and $13,000, respectively. During the nine months ended September 30, 2019 and 2018, depreciation expense was approximately $44,000 and $21,000, respectively. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
INVESTMENTS | NOTE 5 — INVESTMENTS Equity Securities— Effective January 1, 2018, the Company adopted ASU 2016-01 which requires the Company to measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize in earnings any changes in such fair value. The Company uses quoted market prices to determine the fair value of equity securities with readily determinable fair values. For equity securities without readily determinable fair values, the Company has elected the measurement alternative under which the Company measures these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management assesses each of these investments on an individual basis. Additionally, on a quarterly basis, management is required to make a qualitative assessment of whether the investment is impaired; however, the Company is not required to determine the fair value of these investments unless impairment indicators existed. When impairment indicators exist, the Company generally uses discounted cash flow analyses to determine the fair value. For the nine months ended September 30, 2019, the Company recognized approximately $524,000 in impairment loss for equity securities without readily determinable fair values attributable to an investment in KPS Co., Ltd. The Company recognized a cumulative effect adjustment of $41.4 million, net of $12.3 million income tax benefit, to increase the opening balance of retained earnings with an offset to accumulated other comprehensive income as of January 1, 2018, in connection with the adoption of ASU 2016-01. At September 30, 2019 and December 31, 2018, the carrying values of equity securities were included in the following line items in our consolidated balance sheets (in thousands): September 30, 2019 December 31, 2018 Fair Value with Changes Recognized in Income Measurement Alternative - No Readily Determinable Fair Value Fair Value with Changes Recognized in Income Measurement Alternative - No Readily Determinable Fair Value Marketable securities $ 27,643 $ — $ 49,581 $ — Long-term investment at cost — — — 538 Total equity securities $ 27,643 $ — $ 49,581 $ 538 Net unrealized loss on marketable securities available-for-sale still held at September 30, 2019 and at September 30, 2018 was approximately $21.7 million and approximately $24.1 million, respectively. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 6 — ACCOUNTS PAYABLE AND ACCRUED EXPENSES At September 30, 2019 and December 31, 2018, accounts payable and accrued expenses consisted of the following (in thousands): September 30, 2019 December 31, 2018 Accounts payable: Clinical and regulatory expenses $ 352 $ 83 Professional fees 1,531 2,157 Selling expenses 552 382 Manufacturing costs 4,171 — Other vendors 794 980 Total accounts payable 7,400 3,602 Accrued interest payable, related parties 36 842 Accrued interest payable 824 2,138 Accrued expenses: Payroll expenses 819 713 Government rebates and other incentives 1,350 1,744 Other accrued expenses 277 83 Total accrued expenses 2,446 2,540 Total accounts payable and accrued expenses $ 10,706 $ 9,122 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7 — NOTES PAYABLE Notes payable consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): Year Issued Interest Rate Range Term of Notes Conversion Price Principal Outstanding September 30, 2019 Discount Amount September 30, 2019 Carrying Amount September 30, 2019 Shares Underlying September 30, 2019 Principal Outstanding December 31, 2018 Discount Amount December 31, 2018 Carrying Amount December 31, 2018 Shares Underlying Notes December 31, 2018 Notes payable 2013 10% Due on demand — $ 926 $ — $ 926 — $ 909 $ — $ 909 — 2015 10% Due on demand — — — — — 10 — 10 — 2016 10% - 11% Due on demand — — — — — 843 — 843 — 2017 5% - 11% Due on demand — — — — — 2,575 — 2,575 — 2018 10% - 11% Due on demand- 18 months — — — — — 12,311 9,233 3,078 — 2019 11% Due on demand - 6 months — 2,960 — 2,960 — — — — — $ 3,886 $ — $ 3,886 — $ 16,648 $ 9,233 $ 7,415 — Current $ 3,886 $ — $ 3,886 — $ 12,448 $ 6,054 $ 6,394 — Non-current $ — $ — $ — — $ 4,200 $ 3,179 $ 1,021 — Notes payable - related parties 2016 10% Due on demand — $ 20 $ — $ 20 — $ 270 $ — $ 270 — 2017 10% Due on demand — — — — — 39 — 39 — 2018 11% Due on demand — 159 — 159 — 159 — 159 — 2019 10% Due on demand — 14 — 14 — — — — — $ 193 $ — $ 193 — $ 468 $ — $ 468 — Current $ 193 $ — $ 193 — $ 468 $ — $ 468 — Convertible debentures 2019 10% 18 months $ 9.52 $ 12,200 $ — $ 12,200 1,292 (a) $ 12,200 $ — $ 12,200 1,292 $ — $ — $ — — Current $ 11,000 $ — $ 11,000 1,166 $ — $ — $ — — Non-current $ 1,200 $ 1,200 126 $ — $ — $ — — Convertible notes payable 2011 10% 5 years $3.05 $ — $ — $ — — $ 300 $ — $ 300 98 2014 10% Due on demand - 2 years $3.05 - $3.60 — — — — 519 — 519 184 2016 10% 1 year $ 4.50 — — — — 61 — 61 17 2017 10% Due on demand - 1 year $3.50 - $4.50 — — — — 2,820 349 2,471 899 2018 6% - 10% Due on demand - 2 years $3.50 - $10.00 3,000 72 2,928 356 (b) 19,556 6,169 13,387 3,664 $ 3,000 $ 72 $ 2,928 356 $ 23,256 $ 6,518 $ 16,738 4,862 Current $ 3,000 $ 72 $ 2,928 356 $ 16,604 $ 5,351 $ 11,253 3,981 Non-current $ — $ — $ — — $ 6,652 $ 1,167 $ 5,485 881 Convertible notes payable - related parties 2012 10% Due on demand $ 3.30 $ — $ — $ — — $ 200 $ — $ 200 74 2015 10% 2 years $ 4.50 — — — — 200 — 200 58 2017 10% 2 years $ 10.00 — — — — 5,000 311 4,689 533 2018 10% 2 years $ 10.00 — — — — 9,400 871 8,529 972 $ — $ — $ — — $ 14,800 $ 1,182 $ 13,618 1,637 Current $ — $ — $ — — $ 5,400 $ 311 $ 5,089 665 Non-current $ — $ — $ — — $ 9,400 $ 871 $ 8,529 972 Total $ 19,279 $ 72 $ 19,207 $ 1,648 $ 55,172 $ 16,933 $ 38,239 $ 6,499 (a) The notes are convertible to Emmaus Life Sciences, Inc. shares. (b) The notes are convertible to EMI Holding, Inc. shares. The weighted-average stated interest rate of notes payable was 10% as of September 30, 2019 and December 31, 2018. The weighted-average effective interest rates of notes payable as of September 30, 2019 and December 31, 2018 were 12% and 35%, respectively, after giving effect to discounts relating to beneficial conversion features of these notes. The notes payable and convertible notes payable contain no restrictive financial covenants or acceleration clauses associated with a material adverse change event. The convertible debentures contain negative covenants. Immediately prior to the completion of the Merger, all but one of the convertible notes payable were converted into shares of EMI common stock at their respective conversion prices. At the completion of the Merger, the converted shares were exchanged for shares of the Company common stock in the same manner as other outstanding shares of common stock of EMI based on the Merger “exchange ratio.” The unconverted convertible note payable of EMI is convertible into shares of common stock of EMI at conversion price of $10.00 per share as of September 30, 2019. Our 10% senior secured convertible debentures were amended and restated immediately prior to the Merger to include, among other changes, an option to convert their debentures into shares of common stock of the Company at a conversion price of $9.52 per share during the term of the debentures. The conversion feature of the debentures is treated as a conversion feature derivative liability. Contractual principal payments due on notes payable and debentures are as follows (in thousands): Year Ending 2019 (three months) $ 6,079 2020 13,200 Total $ 19,279 The Company estimated the total fair value of any beneficial conversion feature and accompanying warrants in allocating the proceeds from the sale of convertible notes payable. The proceeds allocated to the beneficial conversion feature were determined by taking the estimated fair value of shares underlying the convertible notes less the fair value of the number of shares that would be issued if the conversion rate equaled the fair value of common stock as of the date of issuance. The Company issued warrants with our 10% senior secured convertible debentures. The fair value of the warrants issued in conjunction with debentures were determined using the Binominal Monte-Carlo Cliquet Option Pricing Model with the following inputs for the nine months ended September 30, 2019 and year ended December 31, 2018 (See Note 8). Nine months ended September 30, 2019 Year ended December 31, 2018 Stock price $ 6.86 $ 11.10 Exercise price $ 5.87 $ 11.30 Term until expiration 4.26 years 5 years Risk‑free interest rate 1.79 % 3.05 % Expected dividend yield — — Expected volatility 65.0 % 70.0 % With respect to the notes that included both a beneficial conversion feature and a warrant, the proceeds were allocated to the beneficial conversion feature and the warrant based on their respective pro rata fair values. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 8 — STOCKHOLDERS’ DEFICIT Private placement — On September 11, 2013, the Company issued an aggregate of 3,020,501 units at a price of $2.50 per unit (the “Private Placement”). Each unit consisted of one share of common stock and one common stock warrant for the purchase of an additional share of common stock. The aggregate purchase price for the units was approximately $7.6 million. In addition, 300,000 warrants for the purchase of a share of common stock were issued to a broker under the same terms as the Private Placement transaction (the “Broker Warrants”). The warrants issued in the Private Placement and the Broker Warrants entitle the holders thereof to purchase, at any time on or prior to September 11, 2018, shares of common stock of the Company at an exercise price of $3.50 per share. The warrants contain non-standard anti-dilution protection and, consequently, are being accounted for as liabilities, were originally recorded at fair value, and are adjusted to fair market value each reporting period. Because the shares of common stock underlying the Private Placement warrants and Broker Warrants were not effectively registered for resale by September 11, 2014, the warrant holders have an option to exercise the warrants using a cashless exercise feature. The shares have not been registered for resale as of September 30, 2018. The availability to warrant holders of the cashless exercise feature as of September 11, 2014 caused the then-outstanding 2,225,036 Private Placement warrants and Broker Warrants with fair value of approximately $7.1 million to be reclassified from liability classified warrants to warrant derivative liabilities and to continue to be remeasured at fair value each reporting period. On June 10, 2014, certain warrant holders exercised 1,095,465 warrants issued in the Private Placement for the exercise price of $3.50 per share, resulting in the Company receiving aggregate exercise proceeds of $3.8 million and issuing 1,095,465 shares of common stock. Prior to exercise, these Private Placement warrants were accounted for at fair value as liability classified warrants. As of June 10, 2014, immediately prior to exercise, the carrying value of these Private Placement warrants was reduced to their fair value of $1.8 million, representing their intrinsic value, with this adjusted carrying value of $1.8 million being transferred to additional paid-in capital. Also on June 10, 2014, based on an offer made to holders of Private Placement warrants in connection with such exercises, the Company issued an aggregate of 1,095,465 replacement warrants to holders exercising Private Placement warrants, which replacement warrants have terms that are generally the same as the exercised warrants, including an expiration date of September 11, 2018 and an exercise price of $3.50 per share. The replacement warrants are treated for accounting purposes as liability classified warrants, and their issuance gave rise to a $3.5 million warrant exercise inducement expense based on their fair value as of issuance as determined using a Binomial Monte-Carlo Cliquet (aka Ratchet) Option Pricing Model. Because the shares of common stock underlying the replacement warrants were not effectively registered for resale by June 10, 2015, the warrant holders have an option to exercise the warrants using a cashless exercise feature. The availability to warrant holders of the cashless exercise feature as of June 10, 2015 caused the then-outstanding 1,095,465 replacement warrants with fair value of approximately $2.5 million to be reclassified from liability classified warrants to warrant derivative liabilities and to continue to be remeasured at fair value each reporting period. As of September 11, 2018, all of the Private Placement warrants, replacement warrants and Broker Warrants had been exercised primarily on a cashless basis or had expired. Purchase Agreement with GPB —On December 29, 2017, the Company entered into the Purchase Agreement with GPB Debt Holdings II, LLC (“GPB”), pursuant to which the Company issued to GPB a $13 million principal amount senior secured convertible promissory note (the “GPB Note”) for an aggregate purchase price of approximately $12.5 million, which reflected a 4.0% original issue discount. In connection with the issuance of the GPB Note, the Company also issued to GPB a warrant (the “GPB Warrant”) to purchase up to 240,674 of Company common stock at an exercise price of $10.80 per company share, with customary adjustments for stock splits, stock dividends and other recapitalization events and anti-dilution provisions set forth in the GPB Warrant. If the Company effects a public listing of common stock for trading on any securities market or exchange, whether through a direct listing application or merger transaction, at a price per share less than the exercise price, the exercise price will be adjusted on a one-time basis to a 10% premium to the dilutive issuance price and the number of shares issuable under the GPB Warrant will be increased on a full ratchet basis. The GPB Warrant became exercisable six months after issuance and has a term of five years after the initial exercise date. In connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to file a registration statement with SEC relating to the offer and sale by GPB of the common stock underlying the GPB Warrant within one hundred eighty (180) days of closing of a public listing of the Company’s Common Stock for trading on any national securities exchange (excluding any over-the-counter market), whether through a direct listing application or merger transaction. The Company is required to have the registration statement become effective on the earlier of (A) the date that is two-hundred and forty (240) days following the later to occur of (i) the date of closing of the public listing or (ii) or in the event the registration statement receives a “full review” by the Commission, the date that is 300 days following the date of closing of the public listing, or (B) the date which is within three (3) business days after the date on which the Commission informs the Company (i) that the Commission will not review the registration statement or (ii) that the Company may request the acceleration of the effectiveness of the registration statement. If the Company does not timely effect such registration, it will be required to pay GPB certain late payments specified in the Registration Rights Agreement. In February 2018, the Company prepaid the GPB Note in full. Upon such prepayment, the Purchase Agreement and the Company’s obligations under the transaction documents entered into pursuant to the Purchase Agreement terminated except for the GPB Warrant and the Registration Rights Agreement. Purchase Agreement with 10% senior secured debentures The debentures were amended and restated in their entirety in conjunction with the merger of the Company on July 17, 2019 as described in Note 12. As originally issued, the debentures bore interest at the rate of 10% per annum, payable monthly commencing November 1, 2018, and were to mature on April 21, 2020. The Company was to be obligated to redeem $1 million principal amount of debentures monthly, commencing in May 2019 and to redeem the debentures in full upon a “subsequent financing” of at least $20 million, subject to certain exceptions, or in the “event of default” (as defined). The Company’s obligations under the debentures were secured by a security interest in substantially all of our assets, except for certain pledged marketable securities, and are guaranteed by the U.S. subsidiaries, Emmaus Medical, Inc. and Newfield Nutrition Corporation. The common stock purchase warrants also were amended and restated in their entirety in conjunction with the Merger. As originally issued, the common stock purchase warrants were exercisable for five years beginning April 22, 2019 at an initial exercise price of $11.30 per share, which was to be subject to reduction if EMI became a listed company or its common stock became listed or quoted on a trading market based upon the public offering price or “VWAP” of the common stock. The exercise price also was subject to adjustment in certain other customary circumstances. T.R. Winston & Company, LLC acted as placement agent in connection with the sale of the debentures and warrants pursuant to an amended and restated fee agreement with us dated October 1, 2018. In accordance with the fee agreement, EMI paid T.R. Winston a cash fee equal to 5% of the gross proceeds received from the purchasers, granted T.R. Winston warrants to purchase up to 120,000 shares of EMI common stock on the same terms as the common stock purchase warrants sold to the purchasers and reimbursed T.R. Winston for certain legal fees and expenses. Effective as of March 5, 2019, EMI entered into a securities amendment agreement with the debenture and warrant holders which amended in certain respects the original securities purchase agreement provided that the debentures and warrants were to be amended in certain respects and restated in their entirety immediately prior to and subject to the completion of the then-pending Merger. Pursuant to the terms of the securities amendment agreement, (i) the debenture holders waived their right to the monthly redemption of $1,000,000 principal amount of the debentures that was due May 1, 2019 and their right to accelerate the repayment of the debentures in connection with the proposed Merger and (ii) the provision of the debentures requiring their mandatory redemption in connection with any “subsequent financing” was eliminated. The debenture holders subsequently waived their rights to the monthly redemptions due June 1 and July 1, 2019 respectively. The amended and restated debentures provide that the mandatory monthly redemption of $1,000,000 principal amount thereof will commence in November 2019 and that they will mature on October 21, 2020, six months later than the original maturity date of the debentures. Unlike the debentures, the amended and restated debentures are convertible at the option of each holder into shares of Company common stock at a conversion price of $10.00 a share, subject to adjustment for stock splits, merger reorganizations and other customary events. The amended and restated warrants will be exercisable for up to an aggregate of up to 1,460,000 shares of our common stock, or 244,000 more shares than are currently purchasable under the original warrants, at an initial exercise price of $10.00 per share, or $1.30 less than the original exercise price of the warrants. The exercise price of the warrants was subject to reduction in connection with a “going public event,” such as the Merger based upon the “VWAP” (i.e., volume-weighted average trading price) of the Company common stock at the time of the Merger. The exercise price also will be subject to adjustment for stock splits and other customary events. Upon completion of the Merger, the exercise price of the warrants and the number of underlying warrant shares were adjusted based upon “exchange ratio” in the Merger. Subsequent to the Merger, exercise price of the warrants was adjusted in accordance with their terms to $5.87 per share based upon the VWAP of the Company common stock on the day following completion of the Merger. A summary of outstanding warrants as of September 30, 2019 and December 31, 2018 is presented below: September 30, 2019 December 31, 2018 Warrants outstanding, beginning of period 3,436,431 5,265,432 Assumed as part of Merger 1,044,939 Granted 500,951 1,542,000 Exercised (51,000 ) (2,385,317 ) Cancelled, forfeited or expired — (985,684 ) Warrants outstanding, end of period 4,931,321 3,436,431 A summary of outstanding warrants by year issued and exercise price as of September 30, 2019 is presented below: Outstanding Exercisable Year issued and Exercise Price Number of Warrants Issued Weighted-Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Total Weighted-Average Exercise Price At December 31, 2015 $ 4.67 115,953 0.43 $ 4.67 115,953 $ 4.67 2015 Total 115,953 115,953 At December 31, 2016 $ 4.29 124,703 1.78 $ 4.29 124,703 $ 4.29 $ 4.48 78,760 1.59 $ 4.48 78,760 $ 4.48 $ 4.76 1,365,189 1.61 $ 4.76 1,365,189 $ 4.76 2016 Total 1,568,652 1,568,652 At December 31, 2017 $ 10.28 252,802 3.75 $ 10.28 252,802 $ 10.28 2017 Total 252,802 252,802 At December 31, 2018 $ 10.76 210,553 3.86 $ 10.76 210,553 $ 10.76 $ 5.87 1,407,188 4.06 $ 5.87 1,407,188 $ 5.87 2018 Total 1,617,741 1,617,741 At September 30, 2019 $ 6.12 32,391 4.66 $ 6.12 32,391 $ 6.12 $ 12.00 76,575 3.98 $ 12.00 76,575 $ 12.00 $ 14.04 174,999 3.50 $ 14.04 174,999 $ 14.04 $ 31.50 737,975 2.82 $ 31.50 737,975 $ 31.50 $ 36.24 22,333 2.82 $ 36.24 22,333 $ 36.24 $ 60.00 666 1.25 $ 60.00 666 $ 60.00 $ 5.87 256,234 4.08 $ 5.87 256,234 $ 5.87 $ 7.68 75,000 4.80 $ 7.68 75,000 $ 7.68 2019 Total 1,376,173 1,376,173 Total 4,931,321 4,931,321 Summary of Plans – Upon completion of the Merger, the EMI 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. The Company also maintains a 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. All outstanding stock options under the 2012 Omnibus Incentive Compensation Plan were fully vested prior to the merger. Stock options —During the nine months ended September 30, 2019, the Company granted options to purchase 50,000 shares of common stock. The options have an exercise price of $10.30 per share. During the year ended December 31, 2018, the Company granted stock options to purchase up to 357,000 shares of Company common stock. All of the options are exercisable for ten years of from the date of grant and will vest and become exercisable with respect to the underlying shares as follows: as to one‑third (1/3) of the share on the first anniversary of the grant date, and as to the remaining two‑thirds (2/3) of the shares in twenty‑four (24) approximately equal monthly installments over a period of two years thereafter . Upon completion of the Merger, the option exercise prices and number of underlying option shares were adjusted based upon “exchange ratio” in the Merger. A summary of outstanding stock options as of September 30, 2019 and December 31, 2018 are presented below. September 30, 2019 December 31, 2018 Number of Options Weighted‑ Average Exercise Price Number of Options Weighted‑ Average Exercise Price Options outstanding, beginning of period 6,642,200 $ 4.40 6,775,200 $ 4.12 Granted or deemed granted 636,683 $ 7.09 357,000 $ 11.28 Exercised (200 ) $ 5.00 (170,000 ) $ 4.59 Cancelled, forfeited and expired (33,333 ) $ 11.30 (320,000 ) $ 6.06 Options outstanding, end of period 7,245,350 $ 4.68 6,642,200 $ 4.40 Options exercisable, end of period 6,987,464 $ 4.46 5,958,783 $ 3.87 Options available for future grant 2,167,150 2,357,800 During the nine months ended September 30, 2019 and 2018, the Company recognized approximately $3.5 million and $1.7 million, respectively, of share-based compensation expense arising from stock options, including $1.9 million of one-time adjustments resulting from the Merger As of September 30, 2019, there was approximately $1.7 million of total unrecognized compensation expense related to unvested share-based compensation arrangements granted under the Company’s 2011 Stock Incentive Plan. That expense is expected to be recognized over the weighted-average remaining period of 1.9 years. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 9 — LEASES Operating leases — The Company leases its office space under operating leases with unrelated entities. We lease 13,734 square feet of office space for our headquarters in Torrance, California, at a base rental of $48,087 per month. In December 2018, we have entered into an amended lease to expand our headquarter by an additional 7,559 square feet commencing September 9, 2019. The base monthly rent for this additional space of $27,590 will be payable commencing January 1, 2020. The amended lease will expire on May 31, 2026. We also lease an additional 1,600 square feet office space in Torrance, California, at a base rent of $2,240 per month and 2,986 square feet office space in New York, New York, at a base rent of $5,500, which leases will expire on January 31, 2020 and December 30, 2019, respectively. In addition, we lease 1,322 square feet of office space in Tokyo, Japan, which the lease will expire on September 30, 2020. The rent expense during the three months ended September 30, 2019 and 2018 amounted to approximately $286,000 and $191,000, respectively. The rent expense during the nine months ended September 30, 2019 and 2018 amounted to approximately $705,000 and $493,000, respectively. Future minimum lease payments under the agreements were as follows as of September 30, 2019 (in thousands): Amount 2019 (three months) $ 184 2020 900 2021 978 2022 1,006 2023 and thereafter 3,668 Total lease payments 6,736 Less: Interest 2,178 Present value of lease liabilities $ 4,558 The weighted average remaining lease term is 6.5 years and the weighted average discount rate is 13.1%. The Company adopted ASU 2016-02 on January 1, 2019 as noted in Note 2. Prior to the adoption, future minimum lease payment under the non-cancellable leases at December 31, 2018 were as follows (in thousands): Amount 2019 $ 730 2020 974 2021 973 2022 1,003 2023 and thereafter 3,665 Total $ 7,345 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 — COMMITMENTS AND CONTINGENCIES Management Control Acquisition Agreement — On June 12, 2017, the Company entered into a Management Control Acquisition Agreement (the “MCAA”) with Telcon Holdings, Inc., a Korean corporation, and Telcon RF Pharmaceutical Inc. (formerly Telcon Inc. and herein “Telcon”), a Korean-based public company whose shares are listed on KOSDAQ, a trading board of Korea Exchange in South Korea. In accordance with the MCAA, the Company invested the ₩36.0 billion KRW (approximately $31.8 million USD) of the proceeds from the advance payment by Telcon Inc. under the API Supply Agreement discussed below to purchase 6,643,559 shares of Telcon Inc.’s common shares at a purchase price of ₩5,419 KRW (approximately $4.79 USD) per share. The MCAA was amended in certain respect and supplemented by an Agreement, dated as of September 29, 2017 (the “September 2017 Agreement”), among the parties. Pursuant to the September 2017 Agreement, among other things, Telcon purchased 4,444,445 shares of Company common stock from two non-affiliated stockholders of the Company at a price of $6.60 per share. On July 2, 2018, the Company entered into an additional agreement (the “Additional Agreement”) with Evercore Investment Holdings Co., Ltd. (formerly Telcon Holdings Co., Ltd.) (“Evercore”) and Telcon. In the Additional Agreement, the Company agreed to use the proceeds from any sales of the Company’s KPM Tech Co., Ltd. shares to repurchase shares of Company common stock from Telcon at a price of $7.60 a share, subject to certain exceptions, and Telcon granted the Company the right to repurchase all or a portion of Telcon’s shares of Company common stock at a price of $7.60 a share until October 31, 2018 and at a price to be agreed upon after October 31, 2018. Raw Material Supply Agreement — As described in Note 2, on June 12, 2017, the Company entered into an API Supply Agreement with Telcon pursuant to which it advanced to the Company approximately ₩36.0 billion KRW (approximately $31.8 million USD) in consideration of the right to supply 25% of the Company’s requirements for bulk containers of PGLG for a term of fifteen (15) years. The amount advanced to the Company was recorded as a deferred Trade Discount. On July 12, 2017, the parties entered into a Raw Material Supply Agreement which superseded the API Supply Agreement. The Raw Material Supply Agreement is effective for a term of five years with ten one-year renewal periods. The Raw Material Supply Agreement will automatically renew unless terminated by either party in writing. The Raw Material Supply Agreement provides that the Company will purchase from Telcon 940,000 kilograms of PGLG at $50 USD per kilogram, or a total of $47.0 million. The Company purchases from Telcon approximately $0.4 million of PGLG monthly under the Raw Material Supply Agreement. The PGLG purchased from Telcon is included in inventory at net realizable value (i.e., approximately $19 per kilogram as of September 30, 2019) with the excess purchase price being recorded as a charge against the deferred Trade Discount. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 — RELATED PARTY TRANSACTIONS The following table sets forth information relating to our loans from related persons outstanding on or at any time during the nine months ended September 30, 2019 (in thousands): Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at September 30, 2019 Highest Principal Outstanding Amount of Principal Repaid or Converted into Stock Amount of Interest Paid Conversion Rate Shares Underlying Notes September 30, 2019 Current, Promissory note payable to related parties: Lan T. Tran (2) 10% 4/29/2016 Due on Demand 20 20 — — — — Hope Hospice (1) 10% 6/3/2016 Due on Demand — 250 250 78 — — Lan T. Tran (2) 10% 2/9/2017 Due on Demand — 12 — — — — Yutaka Niihara (2)(3) 10% 9/14/2017 Due on Demand — 904 27 2 — — Lan T. Tran (2) 11% 2/10/2018 Due on Demand 159 159 — — — — Lan T. Tran (2) 10% 2/9/2019 Due on Demand 14 14 — — — — Subtotal $ 193 $ 1,359 $ 277 $ 80 — Current, Convertible notes payable to related parties: Yasushi Nagasaki (2) 10% 6/29/2012 Due on Demand $ — $ 200 $ 200 $ 56 $ 3.30 — Yutaka & Soomi Niihara (2)(3) 10% 11/16/2015 2 years — 200 200 73 $ 4.50 — Wei Peu Zen (3) 10% 11/6/2017 2 years — 5,000 5,000 597 $ 10.00 — Profit Preview International Group, Ltd. (4) 10% 2/1/2018 2 years — 4,037 4,037 385 $ 10.00 — Profit Preview International Group, Ltd. (4) 10% 3/21/2018 2 years — 5,363 5,363 442 $ 10.00 — Subtotal $ — $ 14,800 $ 14,800 $ 1,553 — Total $ 193 $ 16,159 $ 15,077 $ 1,633 — (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also the Chief Executive Officer of Hope Hospice. (2) Officer. (3) Director. (4) Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2018: Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at December 31, 2018 Highest Principal Outstanding Amount of Principal Repaid or Converted into Stock Amount of Interest Paid Conversion Rate Shares Underlying Notes December 31, 2018 Current, Promissory note payable to related parties: Masaharu & Emiko Osato (3) 11% 12/29/2015 Due on Demand $ — $ 300 $ 300 $ 76 — — Lan T. Tran (2) 11% 2/10/2016 Due on Demand — 131 131 29 — — Masaharu & Emiko Osato (3) 11% 2/25/2016 Due on Demand — 400 400 94 — — Lan T. Tran (2) 10% 4/29/2016 Due on Demand 20 20 — — — — Hope Hospice (1) 10% 6/3/2016 Due on Demand 250 250 — — — — Lan T. Tran (2) 10% 2/9/2017 Due on Demand 12 12 — — — — Yutaka Niihara (2)(3) 10% 9/14/2017 Due on Demand 27 904 877 95 — — Lan T. Tran (2) 11% 2/10/2018 Due on Demand 159 159 — — — — Subtotal $ 468 $ 2,176 $ 1,708 $ 294 — Current, Convertible notes payable to related parties: Yasushi Nagasaki (2) 10% 6/29/2012 Due on Demand 200 200 — — $ 3.30 74 Yutaka & Soomi Niihara (2)(3) 10% 11/16/2015 2 years 200 200 — — $ 4.50 58 Wei Peu Zen (3) 10% 11/6/2017 2 years 5,000 5,000 — 250 $ 10.00 533 Subtotal $ 5,400 $ 5,400 $ — $ 250 665 Non Current, Convertible notes payable to related parties: Profit Preview International Group, Ltd. (4) 10% 2/1/2018 2 years 4,037 4,037 — 202 $ 10.00 420 Profit Preview International Group, Ltd. (4) 10% 3/21/2018 2 years 5,363 5,363 — 268 $ 10.00 552 Subtotal $ 9,400 $ 9,400 $ — $ 470 972 Total $ 15,268 $ 16,976 $ 1,708 $ 1,014 1,637 (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also the Chief Executive Officer of Hope Hospice. (2) Officer (3) Director ( 4 ) Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 — SUBSEQUENT EVENTS The Company has evaluated subsequent events through November 13, 2019, the date the financial statements were issued. No events require adjustment of, or disclosure in, the financial statements except for the common stock issued as follow: Amount Number of Shares Issued Common stock $ 2,400,000 800,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Going Concern Assessment | Going Concern Assessment In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. Based on our loss to date, anticipated future revenues and operating expenses, debt repayment obligations and cash and cash equivalent of $13.5 million, of which $12.2 million was attributable to a variable interest entity (“VIE”) as of September 30, 2019, we do not have sufficient operating capital for our business without raising additional capital and therefore there is substantial doubt about the Company’s ability to continue as a going concern. |
Organization and Nature of Operations | Organization and Nature of Operations As of and for the period ending June 30, 2019, Emmaus Life Sciences, Inc. (“Emmaus,” “we,” “us,” “our,” or the “Company”), formerly known as MYnd Analytics, Inc., was a predictive analytics company that had developed a decision support tool to help physicians reduce trial and error treatment in mental health and provide more personalized care to patients. On July 17, 2019, the Company completed its merger transaction with EMI Holding, Inc., formerly known as Emmaus Life Sciences, Inc. (“EMI”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of January 4, 2019, among the Company, Athena Merger Subsidiary, Inc. (“Merger Sub”), and Emmaus, as amended by Amendment No. 1 thereto, dated as of May 10, 2019 (as so amended, the “Merger Agreement”), pursuant to which Merger Sub merged with and into EMI, with EMI surviving as a wholly-owned subsidiary of the Company (the “Merger”). On July 17, 2019, immediately after completion of the Merger, the Company changed its name to “Emmaus Life Sciences, Inc.”. The Merger was treated as a reverse recapitalization with EMI being deemed the acquiring company for accounting purposes under the acquisition method of accounting in accordance with accounting principles generally accepted in the United States. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. In connection with and prior to the Merger, the Company contributed and transferred to Telemynd, Inc. (“Telemynd”), a newly formed, wholly owned subsidiary of the Company, all or substantially all of the Company’s business, assets and liabilities pursuant to the Amended and Restated Separation and Distribution Agreement, dated as of March 27, 2019, among the Company, Telemynd and MYnd Analytics, Inc., a wholly owned subsidiary of the Company (the “Separation Agreement”). On July 15, 2019, the board of directors of the Company declared a dividend with respect to the shares of the Company common stock outstanding at the close of business on that day of one share of the Telemynd common stock held by the Company for each outstanding share of the Company common stock after giving effect to the reverse split described below. The dividend, which together with the contribution and transfer of MYnd’s business, assets and liabilities described above, is referred to as the “Spin-Off.” Prior to the Spin-Off, Telemynd engaged in no business or operations. On July 17, 2019, in connection with, and prior to the completion of, the Merger, the Company effected a 1-for-6 reverse split (the “Reverse Split”) of its outstanding shares of common stock, par value $0.001 per share. As a result of the Spin-Off and the Merger, since July 17, 2019 the Company has operated through EMI and its direct and indirect subsidiaries and the ongoing business of the Company is the EMI 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. As the acquiring company for accounting purposes, financial condition and results of operations of the Company reflected in the accompanying unaudited consolidated interim financial statements for periods prior to the Merger are those of EMI. . |
Principles of consolidation | Principles of consolidation —The consolidated financial statements include the accounts of the Company, EMI and EMI’s wholly‑owned subsidiary, Emmaus Medical, Inc. and Emmaus Medical, Inc.’s wholly‑owned subsidiaries, Newfield Nutrition Corp., Emmaus Medical Japan, Inc. (“EMJ”), Emmaus Life Sciences, Co. Ltd (“ELSK”) and Emmaus Medical Europe, Ltd (“EM Europe”). All significant intercompany transactions have been eliminated. The Company also consolidates EJ Holdings, Inc., a Japanese corporation, as a variable interest entity (VIE) on the basis that the Company is an indirect 40% shareholder and the primary beneficiary of the VIE. The Company is deemed to be the primary beneficiary of the VIE if it has both (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (b) The preparation of the consolidated financial statements requires the use of management estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reported period. Actual results could differ materially from those estimates. |
Revenues | Revenues – Effective January 1, 2018, the Company adopted Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers using the modified retrospective transition method. The adoption of ASC 606 did not have a material impact on the measurement or on the recognition of revenue of contracts for which all revenue had not been recognized as of January 1, 2018, therefore no cumulative adjustment has been made to the opening balance of accumulated deficit at the beginning of 2018. The Company generates revenues through the sale of Endari® as a treatment for sickle cell disease (“SCD”) and to a much lesser extent from the sale of AminoPure®, a nutritional supplement. Revenues from Endari® product sales are recognized upon delivery and transfer of control of products to the Company’s distributors and specialty pharmacy customers. Distributors resell the products to other specialty pharmacy providers, health care providers, hospitals, patients and clinics. In addition to distribution agreements with distributors, the Company enters into contractual arrangements with specialty pharmacy providers, in-office dispensing providers, group purchasing organizations, and government entities that provide for government-mandated or privately negotiated rebates, chargebacks and discounts with respect to the purchase of our products. These various discounts, rebates, and chargebacks are referred to as “variable consideration.” Revenues from product sales are recorded net of variable consideration. Prior to recognizing revenues, the Company’s management forecasts and estimates variable consideration. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Provisions for returns and other variable consideration adjustments are provided for in the period in which the related revenues are recorded. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. The following are our significant categories of variable consideration: Sales Discounts and Allowances: The Company provides its customers contractual prompt payment discounts and from time to time offers additional one-time discounts that are recorded as a reduction of revenues in the period the revenues are recognized. Product Returns: The Company offers its distributors a right to return product purchased directly from the Company based principally 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. The Company’s 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 accounts payable and accrued expenses in our balance sheet. The liability for these rebates consists primarily of estimates of claims expected to be received in future periods related to the 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 and pharmacy benefit management 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. 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 | — As described below under "Recent accounting pronouncements,” we adopted ASU 2016-02 – Leases (Topic 842) (“ASU 2016-02”) as of January 1, 2019. Pursuant to ASU 2016-02, all of Prior to our adoption of ASU 2016-02, when our lease agreements contained tenant improvement allowances and rent escalation clauses, we recorded a deferred rent asset or liability equal to the difference between the rent expense and the future minimum lease payments due. The lease expense related to operating leases was recognized on a straight-line basis in the statements of operations over the term of each lease. In cases where the lessor granted us leasehold improvement allowances, we capitalized the improvements as incurred and recognized it over the shorter of the lease term or the expected useful life of the improvements. |
Inventories | Inventories — Substantially, all the raw material purchased during the three and nine months ended September 30, 2019 and the year ended December 31, 2018 were from one vendor. The below table presents inventory by category (in thousands): September 30, 2019 December 31, 2018 Raw materials and components $ 1,089 $ 171 Work-in-process 2,392 2,471 Finished goods 4,010 2,063 Total $ 7,491 $ 4,705 |
Marketable securities | Marketable securities — The Company’s marketable securities as of December 31, 2018 consisted of the following; (a) 39,250 shares of capital stock of CellSeed, Inc., a Japanese Corporation (“CellSeed”) acquired in January 2009 at ¥680 JPY per share ($7.69 USD), which shares were sold in June 2019 for cash proceeds of approximately $221,000; and (b) 6,643,559 shares of capital stock of Telcon RF Pharmaceutical, Inc., a Korean corporation (formerly, Telcon Inc. and herein “Telcon”), which were acquired in July 2017 for ₩36,001,446,221 KRW (equivalent to $31.8 million USD) at ₩5,419 KRW per share. As of September 30, 2019 and December 31, 2018, the closing prices per Telcon share on the Korean Securities Dealers Automated Quotations (“KOSDAQ”) were ₩4,995 ($4.16 USD) and ₩8,280 KRW ($7.43 USD), respectively. As of December 31, 2018, the closing price per CellSeed share on the Tokyo Stock Exchange was ¥668 JPY ($6.07 USD). As of September 30, 2019 and December 31, 2018, all shares of Telcon common stock were pledged to secure our obligations under the revised API agreement with Telcon. As of December 31, 2018, the 39,250 shares of CellSeed common stock were pledged to secure a $300,000 convertible note of the Company issued to Mitsubishi UFJ Capital III Limited Partnership that was due on demand and were classified as marketable securities, pledged to creditor in our balance sheet. During the nine months ended September 30, 2019, the Company repaid the convertible notes. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets — Prepaid expenses and other current assets consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Prepaid insurance $ 427 $ 82 Other prepaid expenses and current assets 767 661 $ 1,194 $ 743 |
Other long-term liabilities | Other long-term liabilities —Other long-term liabilities consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Trade discount $ 24,052 $ 26,222 Unearned revenue 10,500 10,000 Other long-term liabilities 4 — Total other long-term liabilities $ 34,556 $ 36,222 On June 12, 2017, the Company entered into an API Supply Agreement with Telcon pursuant to which Telcon advanced to the Company approximately ₩36.0 billion KRW (approximately $31.8 million USD) in consideration for the right to supply 25% of the Company’s requirements for bulk containers of pharmaceutical grade L-glutamine (“PGLG”). The advance was accounted for a trade discount. See Note 10 for additional details. |
Fair value measurements | Fair value measurements — The following table presents the change in fair value of warrant derivative liabilities on a recurring basis using Level 3 inputs during the year ended December 31, 2018 (in thousands): Year Ended Warrant Derivative Liabilities—Stock Purchase Warrants December 31, 2018 Balance, beginning of period $ 26,377 Repurchased (6,186 ) Change in fair value included in the statement of comprehensive income (loss) (20,191 ) Balance, end of period $ — The following table presents the change in fair value of warrants issued to GPB Debt Holdings II, LLC as described in Note 8 as of September 30, 2019 and December 31, 2018 (in thousands): Nine Months Ended Year Ended September 30, 2019 December 31, 2018 Warrant Derivative Liabilities—GPB Warrants Embedded Conversion Option Warrants Embedded Conversion Option Balance, beginning of period $ 1,399 $ — $ 1,882 $ 1,289 Change in fair value included in the statement of comprehensive income (loss) (623 ) — (483 ) (466 ) Extinguished upon debt repayment — — — (823 ) Reclassification to equity (776 ) Balance, end of period $ — $ — $ 1,399 $ — The value of warrant derivative liabilities and the change in fair value of the warrant derivative liabilities were determined using a Binomial Monte-Carlo Cliquet Option Pricing Model. The model is similar to traditional Black-Scholes-type option pricing models, except that the exercise price resets at certain dates in the future. In connection with the Merger, the variable exercise price was fixed, and the warrants were reclassified to equity. The value as of the dates set forth in the table above was based on upon following assumptions: July 17, 2019 December 31, 2018 Stock price $ 7.02 $ 9.10 Risk‑free interest rate 1.81 % 2.48 % Expected volatility (peer group) 70.00 % 70.00 % Expected life (in years) 3.96 4.00 Expected dividend yield — — Number outstanding 252,802 240,764 Balance, end of period: Warrant derivative liabilities (long-term) (in thousands) $ 776 $ 1,399 The embedded conversion option in our 10% senior secured convertible debentures is separately accounted at fair value as a derivative liability under the guidance in ASC 815 as of September 30, 2019 and any changes in the fair value of the embedded conversion option are recognized in earnings. The following table sets forth the fair value of the embedded conversion option measured as of September 30, 2019: Nine Months Ended Embedded Conversion Option Liabilities—10% Secured Senior Debentures September 30, 2019 Balance, beginning of period $ — Fair value at issuance date $ 635 Change in fair value included in the statement of comprehensive income (loss) (342 ) Balance, end of period $ 293 The value and the change in fair value of embedded conversion option liabilities were determined using a binomial 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. The values as of September 30, 2019 and as of the Merger date were based upon following assumptions: September 30, 2019 July 17, 2019 Conversion price $ 9.52 $ 10.00 Risk‑free interest rate 1.74 % 1.92 % Expected volatility (peer group) 60.00 % 55.00 % Expected life (in years) 1.06 1.26 Expected dividend yield — — Balance, end of period: Embedded conversion option liabilities (in thousands) $ 293 $ 635 |
Net loss per share | Net loss per share — As of September 30, 2019 and 2018, the Company had outstanding potentially dilutive securities exercisable for or convertible into 13,458,185 and 16,053,511 shares of Company common stock, respectively. No potentially dilutive securities were included in the calculation of diluted net loss per share since their effect would be anti-dilutive for the period ended September 30, 2019. |
Recent accounting pronouncements | Recent accounting pronouncements — In June 2016, the FASB issued ASU 2016-13—Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which represents a new credit loss standard that will change the impairment model for most financial assets and certain other financial instruments. Specifically, this guidance will require entities to utilize a new “expected loss” model as it relates to trade and other receivables. In addition, entities will be required to recognize an allowance for estimated credit losses on available-for-sale debt securities, regardless of the length of time that a security has been in an unrealized loss position. This guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of this new standard on our financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement accompanying footnote disclosures In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810) Targeted Improvements to Related Party guidance for Variable Interest Entities (“ASU 2018-17”) Interest Held Through Related Parties That Are Under Common Control. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of inventory | The below table presents inventory by category (in thousands): September 30, 2019 December 31, 2018 Raw materials and components $ 1,089 $ 171 Work-in-process 2,392 2,471 Finished goods 4,010 2,063 Total $ 7,491 $ 4,705 |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Prepaid insurance $ 427 $ 82 Other prepaid expenses and current assets 767 661 $ 1,194 $ 743 |
Schedule of other long-term liabilities | Other long-term liabilities consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Trade discount $ 24,052 $ 26,222 Unearned revenue 10,500 10,000 Other long-term liabilities 4 — Total other long-term liabilities $ 34,556 $ 36,222 |
Schedule of change in fair value of warrant derivative liabilities | The following table presents the change in fair value of warrant derivative liabilities on a recurring basis using Level 3 inputs during the year ended December 31, 2018 (in thousands): Year Ended Warrant Derivative Liabilities—Stock Purchase Warrants December 31, 2018 Balance, beginning of period $ 26,377 Repurchased (6,186 ) Change in fair value included in the statement of comprehensive income (loss) (20,191 ) Balance, end of period $ — |
Senior Secured Convertible Debentures [Member] | |
Schedule of change in fair value of warrants issued | The following table sets forth the fair value of the embedded conversion option measured as of September 30, 2019: Nine Months Ended Embedded Conversion Option Liabilities—10% Secured Senior Debentures September 30, 2019 Balance, beginning of period $ — Fair value at issuance date $ 635 Change in fair value included in the statement of comprehensive income (loss) (342 ) Balance, end of period $ 293 |
Schedule of assumptions used in the valuation of warrants Issued | The values as of September 30, 2019 and as of the Merger date were based upon following assumptions: September 30, 2019 July 17, 2019 Conversion price $ 9.52 $ 10.00 Risk‑free interest rate 1.74 % 1.92 % Expected volatility (peer group) 60.00 % 55.00 % Expected life (in years) 1.06 1.26 Expected dividend yield — — Balance, end of period: Embedded conversion option liabilities (in thousands) $ 293 $ 635 |
GPB Debt Holdings II, LLC [Member] | |
Schedule of change in fair value of warrants issued | The following table presents the change in fair value of warrants issued to GPB Debt Holdings II, LLC as described in Note 8 as of September 30, 2019 and December 31, 2018 (in thousands): Nine Months Ended Year Ended September 30, 2019 December 31, 2018 Warrant Derivative Liabilities—GPB Warrants Embedded Conversion Option Warrants Embedded Conversion Option Balance, beginning of period $ 1,399 $ — $ 1,882 $ 1,289 Change in fair value included in the statement of comprehensive income (loss) (623 ) — (483 ) (466 ) Extinguished upon debt repayment — — — (823 ) Reclassification to equity (776 ) Balance, end of period $ — $ — $ 1,399 $ — |
Schedule of assumptions used in the valuation of warrants Issued | The value of warrant derivative liabilities and the change in fair value of the warrant derivative liabilities were determined using a Binomial Monte-Carlo Cliquet Option Pricing Model. The model is similar to traditional Black-Scholes-type option pricing models, except that the exercise price resets at certain dates in the future. In connection with the Merger, the variable exercise price was fixed, and the warrants were reclassified to equity. The value as of the dates set forth in the table above was based on upon following assumptions: July 17, 2019 December 31, 2018 Stock price $ 7.02 $ 9.10 Risk‑free interest rate 1.81 % 2.48 % Expected volatility (peer group) 70.00 % 70.00 % Expected life (in years) 3.96 4.00 Expected dividend yield — — Number outstanding 252,802 240,764 Balance, end of period: Warrant derivative liabilities (long-term) (in thousands) $ 776 $ 1,399 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of revenues disaggregated by category | Revenues disaggregated by category were as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 2018 2019 2018 Endari® $ 5,994 $ 4,803 $ 16,960 $ 7,863 Other 90 $ 79 300 372 Revenues, net 6,084 4,882 17,260 8,235 |
Revenue Allowance and Accrual Activities | The following table summarizes the revenue allowance and accrual activities for the nine months ended September 30, 2019 (in thousands): Trade Discounts, Allowances and Chargebacks Government Rebates and Other Incentives Returns Total Balance as of December 31, 2018 $ 303 $ 1,880 $ 181 $ 2,364 Provision related to sales in the current year 1,039 2,368 190 3,597 Adjustments related prior period sales (218 ) (1,082 ) — (1,300 ) Credit and payments made (866 ) (1,816 ) — (2,682 ) Balance as of September 30, 2019 $ 258 $ 1,350 $ 371 $ 1,979 |
Summarizes revenues from each of our customers accounted for 10% or more of total revenues | The following table summarizes revenues attributable to each of our customers who accounted for 10% or more of our total revenues (as a percentage of total revenues): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 2018 2019 2018 AmerisourceBergen Specialty Group 62 % 90 % 60 % 88 % McKesson Plasma and Biologics LLC 22 % 4 % 21 % 3 % |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): September 30, 2019 December 31, 2018 Equipment $ 333 $ 306 Leasehold improvements 82 70 Furniture and fixtures 95 79 Total property and equipment 510 455 Less: accumulated depreciation (347 ) (303 ) Property and equipment, net $ 163 $ 152 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
Schedule of carrying values of equity securities | At September 30, 2019 and December 31, 2018, the carrying values of equity securities were included in the following line items in our consolidated balance sheets (in thousands): September 30, 2019 December 31, 2018 Fair Value with Changes Recognized in Income Measurement Alternative - No Readily Determinable Fair Value Fair Value with Changes Recognized in Income Measurement Alternative - No Readily Determinable Fair Value Marketable securities $ 27,643 $ — $ 49,581 $ — Long-term investment at cost — — — 538 Total equity securities $ 27,643 $ — $ 49,581 $ 538 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | At September 30, 2019 and December 31, 2018, accounts payable and accrued expenses consisted of the following (in thousands): September 30, 2019 December 31, 2018 Accounts payable: Clinical and regulatory expenses $ 352 $ 83 Professional fees 1,531 2,157 Selling expenses 552 382 Manufacturing costs 4,171 — Other vendors 794 980 Total accounts payable 7,400 3,602 Accrued interest payable, related parties 36 842 Accrued interest payable 824 2,138 Accrued expenses: Payroll expenses 819 713 Government rebates and other incentives 1,350 1,744 Other accrued expenses 277 83 Total accrued expenses 2,446 2,540 Total accounts payable and accrued expenses $ 10,706 $ 9,122 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | Notes payable consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): Year Issued Interest Rate Range Term of Notes Conversion Price Principal Outstanding September 30, 2019 Discount Amount September 30, 2019 Carrying Amount September 30, 2019 Shares Underlying September 30, 2019 Principal Outstanding December 31, 2018 Discount Amount December 31, 2018 Carrying Amount December 31, 2018 Shares Underlying Notes December 31, 2018 Notes payable 2013 10% Due on demand — $ 926 $ — $ 926 — $ 909 $ — $ 909 — 2015 10% Due on demand — — — — — 10 — 10 — 2016 10% - 11% Due on demand — — — — — 843 — 843 — 2017 5% - 11% Due on demand — — — — — 2,575 — 2,575 — 2018 10% - 11% Due on demand- 18 months — — — — — 12,311 9,233 3,078 — 2019 11% Due on demand - 6 months — 2,960 — 2,960 — — — — — $ 3,886 $ — $ 3,886 — $ 16,648 $ 9,233 $ 7,415 — Current $ 3,886 $ — $ 3,886 — $ 12,448 $ 6,054 $ 6,394 — Non-current $ — $ — $ — — $ 4,200 $ 3,179 $ 1,021 — Notes payable - related parties 2016 10% Due on demand — $ 20 $ — $ 20 — $ 270 $ — $ 270 — 2017 10% Due on demand — — — — — 39 — 39 — 2018 11% Due on demand — 159 — 159 — 159 — 159 — 2019 10% Due on demand — 14 — 14 — — — — — $ 193 $ — $ 193 — $ 468 $ — $ 468 — Current $ 193 $ — $ 193 — $ 468 $ — $ 468 — Convertible debentures 2019 10% 18 months $ 9.52 $ 12,200 $ — $ 12,200 1,292 (a) $ 12,200 $ — $ 12,200 1,292 $ — $ — $ — — Current $ 11,000 $ — $ 11,000 1,166 $ — $ — $ — — Non-current $ 1,200 $ 1,200 126 $ — $ — $ — — Convertible notes payable 2011 10% 5 years $3.05 $ — $ — $ — — $ 300 $ — $ 300 98 2014 10% Due on demand - 2 years $3.05 - $3.60 — — — — 519 — 519 184 2016 10% 1 year $ 4.50 — — — — 61 — 61 17 2017 10% Due on demand - 1 year $3.50 - $4.50 — — — — 2,820 349 2,471 899 2018 6% - 10% Due on demand - 2 years $3.50 - $10.00 3,000 72 2,928 356 (b) 19,556 6,169 13,387 3,664 $ 3,000 $ 72 $ 2,928 356 $ 23,256 $ 6,518 $ 16,738 4,862 Current $ 3,000 $ 72 $ 2,928 356 $ 16,604 $ 5,351 $ 11,253 3,981 Non-current $ — $ — $ — — $ 6,652 $ 1,167 $ 5,485 881 Convertible notes payable - related parties 2012 10% Due on demand $ 3.30 $ — $ — $ — — $ 200 $ — $ 200 74 2015 10% 2 years $ 4.50 — — — — 200 — 200 58 2017 10% 2 years $ 10.00 — — — — 5,000 311 4,689 533 2018 10% 2 years $ 10.00 — — — — 9,400 871 8,529 972 $ — $ — $ — — $ 14,800 $ 1,182 $ 13,618 1,637 Current $ — $ — $ — — $ 5,400 $ 311 $ 5,089 665 Non-current $ — $ — $ — — $ 9,400 $ 871 $ 8,529 972 Total $ 19,279 $ 72 $ 19,207 $ 1,648 $ 55,172 $ 16,933 $ 38,239 $ 6,499 (a) The notes are convertible to Emmaus Life Sciences, Inc. shares. (b) The notes are convertible to EMI Holding, Inc. shares. |
Schedule of contractual principal payments of notes payable | Contractual principal payments due on notes payable and debentures are as follows (in thousands): Year Ending 2019 (three months) $ 6,079 2020 13,200 Total $ 19,279 |
Schedule of fair value assumptions for warrants issued in conjunction with notes | The fair value of the warrants issued in conjunction with debentures were determined using the Binominal Monte-Carlo Cliquet Option Pricing Model with the following inputs for the nine months ended September 30, 2019 and year ended December 31, 2018 (See Note 8). Nine months ended September 30, 2019 Year ended December 31, 2018 Stock price $ 6.86 $ 11.10 Exercise price $ 5.87 $ 11.30 Term until expiration 4.26 years 5 years Risk‑free interest rate 1.79 % 3.05 % Expected dividend yield — — Expected volatility 65.0 % 70.0 % |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders Equity Note [Abstract] | |
Schedule of outstanding warrants | A summary of outstanding warrants as of September 30, 2019 and December 31, 2018 is presented below: September 30, 2019 December 31, 2018 Warrants outstanding, beginning of period 3,436,431 5,265,432 Assumed as part of Merger 1,044,939 Granted 500,951 1,542,000 Exercised (51,000 ) (2,385,317 ) Cancelled, forfeited or expired — (985,684 ) Warrants outstanding, end of period 4,931,321 3,436,431 A summary of outstanding warrants by year issued and exercise price as of September 30, 2019 is presented below: Outstanding Exercisable Year issued and Exercise Price Number of Warrants Issued Weighted-Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Total Weighted-Average Exercise Price At December 31, 2015 $ 4.67 115,953 0.43 $ 4.67 115,953 $ 4.67 2015 Total 115,953 115,953 At December 31, 2016 $ 4.29 124,703 1.78 $ 4.29 124,703 $ 4.29 $ 4.48 78,760 1.59 $ 4.48 78,760 $ 4.48 $ 4.76 1,365,189 1.61 $ 4.76 1,365,189 $ 4.76 2016 Total 1,568,652 1,568,652 At December 31, 2017 $ 10.28 252,802 3.75 $ 10.28 252,802 $ 10.28 2017 Total 252,802 252,802 At December 31, 2018 $ 10.76 210,553 3.86 $ 10.76 210,553 $ 10.76 $ 5.87 1,407,188 4.06 $ 5.87 1,407,188 $ 5.87 2018 Total 1,617,741 1,617,741 At September 30, 2019 $ 6.12 32,391 4.66 $ 6.12 32,391 $ 6.12 $ 12.00 76,575 3.98 $ 12.00 76,575 $ 12.00 $ 14.04 174,999 3.50 $ 14.04 174,999 $ 14.04 $ 31.50 737,975 2.82 $ 31.50 737,975 $ 31.50 $ 36.24 22,333 2.82 $ 36.24 22,333 $ 36.24 $ 60.00 666 1.25 $ 60.00 666 $ 60.00 $ 5.87 256,234 4.08 $ 5.87 256,234 $ 5.87 $ 7.68 75,000 4.80 $ 7.68 75,000 $ 7.68 2019 Total 1,376,173 1,376,173 Total 4,931,321 4,931,321 |
Schedule of stock option activity | A summary of outstanding stock options as of September 30, 2019 and December 31, 2018 are presented below. September 30, 2019 December 31, 2018 Number of Options Weighted‑ Average Exercise Price Number of Options Weighted‑ Average Exercise Price Options outstanding, beginning of period 6,642,200 $ 4.40 6,775,200 $ 4.12 Granted or deemed granted 636,683 $ 7.09 357,000 $ 11.28 Exercised (200 ) $ 5.00 (170,000 ) $ 4.59 Cancelled, forfeited and expired (33,333 ) $ 11.30 (320,000 ) $ 6.06 Options outstanding, end of period 7,245,350 $ 4.68 6,642,200 $ 4.40 Options exercisable, end of period 6,987,464 $ 4.46 5,958,783 $ 3.87 Options available for future grant 2,167,150 2,357,800 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | Future minimum lease payments under the agreements were as follows as of September 30, 2019 (in thousands): Amount 2019 (three months) $ 184 2020 900 2021 978 2022 1,006 2023 and thereafter 3,668 Total lease payments 6,736 Less: Interest 2,178 Present value of lease liabilities $ 4,558 |
Schedule of future minimum lease payments under non-cancellable leases | The Company adopted ASU 2016-02 on January 1, 2019 as noted in Note 2. Prior to the adoption, future minimum lease payment under the non-cancellable leases at December 31, 2018 were as follows (in thousands): Amount 2019 $ 730 2020 974 2021 973 2022 1,003 2023 and thereafter 3,665 Total $ 7,345 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 on or at any time during the nine months ended September 30, 2019 (in thousands): Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at September 30, 2019 Highest Principal Outstanding Amount of Principal Repaid or Converted into Stock Amount of Interest Paid Conversion Rate Shares Underlying Notes September 30, 2019 Current, Promissory note payable to related parties: Lan T. Tran (2) 10% 4/29/2016 Due on Demand 20 20 — — — — Hope Hospice (1) 10% 6/3/2016 Due on Demand — 250 250 78 — — Lan T. Tran (2) 10% 2/9/2017 Due on Demand — 12 — — — — Yutaka Niihara (2)(3) 10% 9/14/2017 Due on Demand — 904 27 2 — — Lan T. Tran (2) 11% 2/10/2018 Due on Demand 159 159 — — — — Lan T. Tran (2) 10% 2/9/2019 Due on Demand 14 14 — — — — Subtotal $ 193 $ 1,359 $ 277 $ 80 — Current, Convertible notes payable to related parties: Yasushi Nagasaki (2) 10% 6/29/2012 Due on Demand $ — $ 200 $ 200 $ 56 $ 3.30 — Yutaka & Soomi Niihara (2)(3) 10% 11/16/2015 2 years — 200 200 73 $ 4.50 — Wei Peu Zen (3) 10% 11/6/2017 2 years — 5,000 5,000 597 $ 10.00 — Profit Preview International Group, Ltd. (4) 10% 2/1/2018 2 years — 4,037 4,037 385 $ 10.00 — Profit Preview International Group, Ltd. (4) 10% 3/21/2018 2 years — 5,363 5,363 442 $ 10.00 — Subtotal $ — $ 14,800 $ 14,800 $ 1,553 — Total $ 193 $ 16,159 $ 15,077 $ 1,633 — (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also the Chief Executive Officer of Hope Hospice. (2) Officer. (3) Director. (4) Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. The following table sets forth information relating to our loans from related persons outstanding at any time during the year ended December 31, 2018: Class Lender Interest Rate Date of Loan Term of Loan Principal Amount Outstanding at December 31, 2018 Highest Principal Outstanding Amount of Principal Repaid or Converted into Stock Amount of Interest Paid Conversion Rate Shares Underlying Notes December 31, 2018 Current, Promissory note payable to related parties: Masaharu & Emiko Osato (3) 11% 12/29/2015 Due on Demand $ — $ 300 $ 300 $ 76 — — Lan T. Tran (2) 11% 2/10/2016 Due on Demand — 131 131 29 — — Masaharu & Emiko Osato (3) 11% 2/25/2016 Due on Demand — 400 400 94 — — Lan T. Tran (2) 10% 4/29/2016 Due on Demand 20 20 — — — — Hope Hospice (1) 10% 6/3/2016 Due on Demand 250 250 — — — — Lan T. Tran (2) 10% 2/9/2017 Due on Demand 12 12 — — — — Yutaka Niihara (2)(3) 10% 9/14/2017 Due on Demand 27 904 877 95 — — Lan T. Tran (2) 11% 2/10/2018 Due on Demand 159 159 — — — — Subtotal $ 468 $ 2,176 $ 1,708 $ 294 — Current, Convertible notes payable to related parties: Yasushi Nagasaki (2) 10% 6/29/2012 Due on Demand 200 200 — — $ 3.30 74 Yutaka & Soomi Niihara (2)(3) 10% 11/16/2015 2 years 200 200 — — $ 4.50 58 Wei Peu Zen (3) 10% 11/6/2017 2 years 5,000 5,000 — 250 $ 10.00 533 Subtotal $ 5,400 $ 5,400 $ — $ 250 665 Non Current, Convertible notes payable to related parties: Profit Preview International Group, Ltd. (4) 10% 2/1/2018 2 years 4,037 4,037 — 202 $ 10.00 420 Profit Preview International Group, Ltd. (4) 10% 3/21/2018 2 years 5,363 5,363 — 268 $ 10.00 552 Subtotal $ 9,400 $ 9,400 $ — $ 470 972 Total $ 15,268 $ 16,976 $ 1,708 $ 1,014 1,637 (1) Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also the Chief Executive Officer of Hope Hospice. (2) Officer (3) Director ( 4 ) Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Schedule of common stock issued | The Company has evaluated subsequent events through November 13, 2019, the date the financial statements were issued. No events require adjustment of, or disclosure in, the financial statements except for the common stock issued as follow: Amount Number of Shares Issued Common stock $ 2,400,000 800,000 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) $ / shares in Units, $ in Thousands | Jul. 17, 2019$ / shares | Jul. 15, 2019shares | Sep. 30, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares |
Variable Interest Entity [Line Items] | ||||
Substantial doubt about ability to continue as a going concern within one year | true | |||
Cash and cash equivalent | $ | $ 13,546 | $ 17,080 | ||
Dividend declared date | Jul. 15, 2019 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Emmaus Life Sciences, Inc. [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Reverse split | 1-for-6 | |||
Reverse split, conversion ratio | 0.167 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Telemynd [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Common stock shares, Stock split ratio | shares | 1 | |||
EJ Holdings, Inc. [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Cash and cash equivalent | $ | $ 12,220 | $ 13,175 | ||
Percentage of voting interest in variable interest entity | 40.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Jun. 12, 2017USD ($)$ / shares | Jun. 12, 2017KRW (₩)₩ / shares | Jun. 30, 2019USD ($)shares | Jul. 31, 2017USD ($) | Jul. 31, 2017KRW (₩)₩ / shares | Jan. 31, 2009$ / shares | Jan. 31, 2009¥ / shares | Sep. 30, 2019Vendor$ / shares | Sep. 30, 2019USD ($)Vendor$ / sharesshares | Sep. 30, 2018USD ($)shares | Dec. 31, 2018USD ($)Vendor$ / sharesshares | Sep. 30, 2019₩ / shares | Dec. 31, 2018¥ / shares | Dec. 31, 2018₩ / shares |
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Number of vendors | Vendor | 1 | 1 | 1 | |||||||||||
Proceeds from sale of marketable securities | $ | $ 221,000 | $ 6,439,000 | ||||||||||||
Potentially dilutive securities outstanding | shares | 13,458,185 | 16,053,511 | ||||||||||||
2011 Convertible notes payable [Member] | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Convertible notes payable, carrying amount | $ | $ 300,000 | |||||||||||||
Senior Secured Convertible Debentures [Member] | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Embedded conversion option | 10.00% | 10.00% | 10.00% | |||||||||||
CellSeed, Inc. [Member] | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Shares held as marketable securities | shares | 39,250 | |||||||||||||
Investment, in per share | (per share) | $ 7.69 | ¥ 680 | ||||||||||||
Proceeds from sale of marketable securities | $ | $ 221,000 | |||||||||||||
Investment, closing price | (per share) | $ 6.07 | ¥ 668 | ||||||||||||
Stock pledged against note | shares | 39,250 | |||||||||||||
Telcon, Inc. ("Telcon") [Member] | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Shares held as marketable securities | shares | 6,643,559 | |||||||||||||
Investment, in per share | ₩ / shares | ₩ 5,419 | |||||||||||||
Investment | $ 31,800,000 | ₩ 36,001,446,221 | ||||||||||||
Investment, closing price | (per share) | $ 4.16 | $ 4.16 | $ 7.43 | ₩ 4,995 | ₩ 8,280 | |||||||||
Telcon, Inc. ("Telcon") [Member] | API Supply Agreement [Member] | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Investment, closing price | $ / shares | $ 4.79 | |||||||||||||
Proceeds from supply agreement | $ | $ 31,800,000 | |||||||||||||
Telcon, Inc. ("Telcon") [Member] | API Supply Agreement [Member] | Korea (South), Won | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Investment, in per share | ₩ / shares | ₩ 5,419 | |||||||||||||
Proceeds from supply agreement | ₩ | ₩ 36,000,000,000 | |||||||||||||
Telcon, Inc. ("Telcon") [Member] | API Supply Agreement [Member] | Pharmaceutical Grade L-glutamine [Member] | ||||||||||||||
Summary of Significant Accounting Policy [Line Items] | ||||||||||||||
Percentage of right to supply | 25.00% | 25.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Raw materials and components | $ 1,089 | $ 171 |
Work-in-process | 2,392 | 2,471 |
Finished goods | 4,010 | 2,063 |
Total | $ 7,491 | $ 4,705 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Prepaid insurance | $ 427 | $ 82 |
Other prepaid expenses and current assets | 767 | 661 |
Prepaid expenses and other current assets | $ 1,194 | $ 743 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Summary of Significant Accounting Policy [Line Items] | ||
Other long-term liabilities | $ 34,556 | $ 36,222 |
Other Long-Term Liabilities [Member] | ||
Summary of Significant Accounting Policy [Line Items] | ||
Other long-term liabilities | 4 | |
Unearned Revenue [Member] | ||
Summary of Significant Accounting Policy [Line Items] | ||
Other long-term liabilities | 10,500 | 10,000 |
Trade Discount [Member] | ||
Summary of Significant Accounting Policy [Line Items] | ||
Other long-term liabilities | $ 24,052 | $ 26,222 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Warrant Derivative Liabilities - Stock Purchase Warrants [Member] | Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | $ 26,377 | |
Repurchased | (6,186) | |
Change in fair value included in the statement of comprehensive income (loss) | (20,191) | |
Derivative Liabilities - Warrants [Member] | GPB Debt Holdings II, LLC [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | $ 1,399 | 1,882 |
Change in fair value included in the statement of comprehensive income (loss) | (623) | (483) |
Reclassification to equity | $ (776) | |
Balance, end of period | 1,399 | |
Warrant Derivative Liabilities - Embedded Conversion Option [Member] | GPB Debt Holdings II, LLC [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | 1,289 | |
Change in fair value included in the statement of comprehensive income (loss) | (466) | |
Extinguished upon debt repayment | $ (823) |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - GPB Debt Holdings II, LLC [Member] $ / shares in Units, $ in Thousands | Jul. 17, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Summary of Significant Accounting Policy [Line Items] | ||
Stock price | $ / shares | $ 7.02 | $ 9.10 |
Number outstanding | shares | 252,802 | 240,764 |
Warrant derivative liabilities (long-term) | $ | $ 776 | $ 1,399 |
Measurement Input, Risk Free Interest Rate | ||
Summary of Significant Accounting Policy [Line Items] | ||
Warrants and rights outstanding, measurement input | 1.81 | 2.48 |
Measurement Input, Price Volatility | ||
Summary of Significant Accounting Policy [Line Items] | ||
Warrants and rights outstanding, measurement input | 70 | 70 |
Measurement Input, Expected Term | ||
Summary of Significant Accounting Policy [Line Items] | ||
Expected life (in years) | 3 years 11 months 15 days | 4 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) - Embedded Conversion Option [Member] - 10% Secured Senior Debentures [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value at issuance date | $ 635 |
Change in fair value included in the statement of comprehensive income (loss) | (342) |
Balance, end of period | $ 293 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 7) $ in Thousands | Sep. 30, 2019USD ($)$ / shares | Jul. 17, 2019USD ($)$ / shares |
Summary of Significant Accounting Policy [Line Items] | ||
Conversion price | $ 10 | |
Binomial Lattice Model [Member] | ||
Summary of Significant Accounting Policy [Line Items] | ||
Conversion price | $ 9.52 | $ 10 |
Embedded conversion option liabilities (in thousands) | $ | 293 | 635 |
Binomial Lattice Model [Member] | Measurement Input, Risk Free Interest Rate | ||
Summary of Significant Accounting Policy [Line Items] | ||
Embedded derivative liability measurement input | 1.74 | 1.92 |
Binomial Lattice Model [Member] | Measurement Input, Price Volatility | ||
Summary of Significant Accounting Policy [Line Items] | ||
Embedded derivative liability measurement input | 60 | 55 |
Binomial Lattice Model [Member] | Measurement Input, Expected Term | ||
Summary of Significant Accounting Policy [Line Items] | ||
Expected life (in years) | 1 year 21 days | 1 year 3 months 3 days |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenues, net | $ 6,084 | $ 4,882 | $ 17,260 | $ 8,235 |
Endari [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues, net | 5,994 | 4,803 | 16,960 | 7,863 |
Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues, net | $ 90 | $ 79 | $ 300 | $ 372 |
REVENUES (Details 1)
REVENUES (Details 1) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Disaggregation Of Revenue [Line Items] | |
Balance as of December 31, 2018 | $ 2,364 |
Provision related to sales in the current year | 3,597 |
Adjustments related prior period sales | (1,300) |
Credit and payments made | (2,682) |
Balance as of September 30, 2019 | 1,979 |
Trade Discounts, Allowances and Chargebacks [Member] | |
Disaggregation Of Revenue [Line Items] | |
Balance as of December 31, 2018 | 303 |
Provision related to sales in the current year | 1,039 |
Adjustments related prior period sales | (218) |
Credit and payments made | (866) |
Balance as of September 30, 2019 | 258 |
Government Rebates and Other Incentives [Member] | |
Disaggregation Of Revenue [Line Items] | |
Balance as of December 31, 2018 | 1,880 |
Provision related to sales in the current year | 2,368 |
Adjustments related prior period sales | (1,082) |
Credit and payments made | (1,816) |
Balance as of September 30, 2019 | 1,350 |
Returns [Member] | |
Disaggregation Of Revenue [Line Items] | |
Balance as of December 31, 2018 | 181 |
Provision related to sales in the current year | 190 |
Balance as of September 30, 2019 | $ 371 |
REVENUES (Details 2)
REVENUES (Details 2) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
AmerisourceBergen Specialty Group [Member] | ||||
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk, percentage | 62.00% | 90.00% | 60.00% | 88.00% |
McKesson Plasma and Biologics LLC [Member] | ||||
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk, percentage | 22.00% | 4.00% | 21.00% | 3.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property and equipment | ||
Property and equipment, gross | $ 510 | $ 455 |
Less: accumulated depreciation | (347) | (303) |
Property and equipment, net | 163 | 152 |
Equipment [Member] | ||
Property and equipment | ||
Property and equipment, gross | 333 | 306 |
Leasehold Improvements [Member] | ||
Property and equipment | ||
Property and equipment, gross | 82 | 70 |
Furniture and Fixtures [Member] | ||
Property and equipment | ||
Property and equipment, gross | $ 95 | $ 79 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation expense | $ 16,000 | $ 13,000 | $ 44,000 | $ 21,000 |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule Of Investments [Line Items] | ||
Impairment loss on long-term investment | $ 524 | |
Net unrealized loss on marketable securities available-for-sale still held | 21,700 | $ 24,100 |
ASU 2016-01 [Member] | ||
Schedule Of Investments [Line Items] | ||
Cumulative effect adjustment on adoption of ASU 2016-01 | 41,400 | |
Cumulative effect on accumulated deficit, tax | $ 12,300 |
INVESTMENTS (Details 1)
INVESTMENTS (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule Of Investments [Line Items] | ||
Fair Value with Changes Recognized in Income | $ 27,643 | $ 49,581 |
Measurement Alternative - No Readily Determinable Fair Value | 538 | |
Marketable Equity Securities [Member] | ||
Schedule Of Investments [Line Items] | ||
Fair Value with Changes Recognized in Income | $ 27,643 | 49,581 |
Long-Term Investment At Cost [Member] | ||
Schedule Of Investments [Line Items] | ||
Measurement Alternative - No Readily Determinable Fair Value | $ 538 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts payable: | ||
Clinical and regulatory expenses | $ 352 | $ 83 |
Professional fees | 1,531 | 2,157 |
Selling expenses | 552 | 382 |
Manufacturing costs | 4,171 | |
Other vendors | 794 | 980 |
Total accounts payable | 7,400 | 3,602 |
Accrued interest payable, related parties | 36 | 842 |
Accrued interest payable | 824 | 2,138 |
Accrued expenses: | ||
Payroll expenses | 819 | 713 |
Government rebates and other incentives | 1,350 | 1,744 |
Other accrued expenses | 277 | 83 |
Total accrued expenses | 2,446 | 2,540 |
Total accounts payable and accrued expenses | $ 10,706 | $ 9,122 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Equity_Instrument$ / shares | Dec. 31, 2018USD ($)Equity_Instrument | |
Debt Instrument [Line Items] | ||
Conversion Price | $ / shares | $ 10 | |
Principal Outstanding | $ 19,279 | $ 55,172 |
Discount Amount | 72 | 16,933 |
Carrying Amount | $ 19,207 | $ 38,239 |
Shares Underlying Notes | Equity_Instrument | 1,648 | 6,499 |
2013 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | $ 926 | $ 909 |
Carrying Amount | $ 926 | 909 |
2015 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | 10 | |
Carrying Amount | 10 | |
2016 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Term of Notes | Due on demand | |
Principal Outstanding | 843 | |
Carrying Amount | 843 | |
2016 Notes payable [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
2016 Notes payable [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
2017 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Term of Notes | Due on demand | |
Principal Outstanding | 2,575 | |
Carrying Amount | 2,575 | |
2017 Notes payable [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.00% | |
2017 Notes payable [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
2018 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 12,311 | |
Discount Amount | 9,233 | |
Carrying Amount | 3,078 | |
2018 Notes payable [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Term of Notes | Due on demand | |
2018 Notes payable [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
Term of Notes | 18 months | |
2019 Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
Principal Outstanding | $ 2,960 | |
Carrying Amount | $ 2,960 | |
2019 Notes payable [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Term of Notes | Due on demand | |
2019 Notes payable [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Term of Notes | 6 months | |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 3,886 | 16,648 |
Discount Amount | 9,233 | |
Carrying Amount | 3,886 | 7,415 |
Principal Outstanding, Current | 3,886 | 12,448 |
Discount Amount Current | 6,054 | |
Notes payable, current | $ 3,886 | 6,394 |
Principal Outstanding, Non Current | 4,200 | |
Discount Amount Non Current | 3,179 | |
Notes payable, non-current | 1,021 | |
2016 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | $ 20 | 270 |
Carrying Amount | $ 20 | 270 |
2017 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | 39 | |
Carrying Amount | 39 | |
2018 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 11.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | $ 159 | 159 |
Carrying Amount | $ 159 | 159 |
2019 Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Term of Notes | Due on demand | |
Principal Outstanding | $ 14 | |
Carrying Amount | 14 | |
Notes payable - related parties [Member] | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 193 | 468 |
Carrying Amount | 193 | 468 |
Principal Outstanding, Current | 193 | 468 |
Notes payable, current | $ 193 | $ 468 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)Equity_Instrument$ / shares | Dec. 31, 2018USD ($)Equity_Instrument | ||
Debt Instrument [Line Items] | |||
Conversion Price | $ / shares | $ 10 | ||
Principal Outstanding | $ 19,279 | $ 55,172 | |
Discount Amount | 72 | 16,933 | |
Carrying Amount | $ 19,207 | $ 38,239 | |
Shares Underlying Notes | Equity_Instrument | 1,648 | 6,499 | |
2019 Convertible Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 18 months | ||
Conversion Price | $ / shares | $ 9.52 | ||
Principal Outstanding | $ 12,200 | ||
Carrying Amount | $ 12,200 | ||
Shares Underlying Notes | Equity_Instrument | [1] | 1,292 | |
Convertible Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 12,200 | ||
Carrying Amount | $ 12,200 | ||
Shares Underlying Notes | Equity_Instrument | 1,292 | ||
Principal Outstanding, Current | $ 11,000 | ||
Convertible Debentures, Current | $ 11,000 | ||
Shares Underlying Notes Current | Equity_Instrument | 1,166 | ||
Principal Outstanding, Non Current | $ 1,200 | ||
Convertible Debentures, Non Current | $ 1,200 | ||
Shares Underlying Notes Non Current | Equity_Instrument | 126 | ||
[1] | The notes are convertible to Emmaus Life Sciences, Inc. shares. |
NOTES PAYABLE (Details 2)
NOTES PAYABLE (Details 2) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)Equity_Instrument$ / shares | Dec. 31, 2018USD ($)Equity_Instrument | ||
Debt Instrument [Line Items] | |||
Conversion Price | $ / shares | $ 10 | ||
Principal Outstanding | $ 19,279 | $ 55,172 | |
Discount Amount | 72 | 16,933 | |
Carrying Amount | $ 19,207 | $ 38,239 | |
Shares Underlying Notes | Equity_Instrument | 1,648 | 6,499 | |
Convertible notes payable, Current | $ 2,928 | $ 11,253 | |
Convertible notes payable, Non Current | 5,485 | ||
2011 Convertible notes payable [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 5 years | ||
Conversion Price | $ / shares | $ 3.05 | ||
Principal Outstanding | 300 | ||
Carrying Amount | $ 300 | ||
Shares Underlying Notes | Equity_Instrument | 98 | ||
2014 Convertible notes payable [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Principal Outstanding | $ 519 | ||
Carrying Amount | $ 519 | ||
Shares Underlying Notes | Equity_Instrument | 184 | ||
2014 Convertible notes payable [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Term of Notes | Due on demand | ||
Conversion Price | $ / shares | $ 3.05 | ||
2014 Convertible notes payable [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Term of Notes | 2 years | ||
Conversion Price | $ / shares | $ 3.60 | ||
2016 Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 1 year | ||
Conversion Price | $ / shares | $ 4.50 | ||
Principal Outstanding | $ 61 | ||
Carrying Amount | $ 61 | ||
Shares Underlying Notes | Equity_Instrument | 17 | ||
2017 Convertible notes payable [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Principal Outstanding | $ 2,820 | ||
Discount Amount | 349 | ||
Carrying Amount | $ 2,471 | ||
Shares Underlying Notes | Equity_Instrument | 899 | ||
2017 Convertible notes payable [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Term of Notes | Due on demand | ||
Conversion Price | $ / shares | $ 3.50 | ||
2017 Convertible notes payable [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Term of Notes | 1 year | ||
Conversion Price | $ / shares | $ 4.50 | ||
2018 Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 3,000 | $ 19,556 | |
Discount Amount | 72 | 6,169 | |
Carrying Amount | $ 2,928 | $ 13,387 | |
Shares Underlying Notes | Equity_Instrument | 356 | [1] | 3,664 |
2018 Convertible Notes Payable [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.00% | ||
Term of Notes | Due on demand | ||
Conversion Price | $ / shares | $ 3.50 | ||
2018 Convertible Notes Payable [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 2 years | ||
Conversion Price | $ / shares | $ 10 | ||
Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 3,000 | $ 23,256 | |
Discount Amount | 72 | 6,518 | |
Carrying Amount | $ 2,928 | $ 16,738 | |
Shares Underlying Notes | Equity_Instrument | 356 | 4,862 | |
Principal Outstanding, Current | $ 3,000 | $ 16,604 | |
Discount Amount Current | 72 | 5,351 | |
Convertible notes payable, Current | $ 2,928 | $ 11,253 | |
Shares Underlying Notes Current | Equity_Instrument | 356 | 3,981 | |
Principal Outstanding, Non Current | $ 6,652 | ||
Discount Amount Non Current | 1,167 | ||
Convertible notes payable, Non Current | $ 5,485 | ||
Shares Underlying Notes Non Current | Equity_Instrument | 881 | ||
2012 Convertible notes payable - related parties [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | Due on demand | ||
Conversion Price | $ / shares | $ 3.30 | ||
Principal Outstanding | $ 200 | ||
Carrying Amount | $ 200 | ||
Shares Underlying Notes | Equity_Instrument | 74 | ||
2015 Convertible notes payable - related parties [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 2 years | ||
Conversion Price | $ / shares | $ 4.50 | ||
Principal Outstanding | $ 200 | ||
Carrying Amount | $ 200 | ||
Shares Underlying Notes | Equity_Instrument | 58 | ||
2017 Convertible notes payable - related parties [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 2 years | ||
Conversion Price | $ / shares | $ 10 | ||
Principal Outstanding | $ 5,000 | ||
Discount Amount | 311 | ||
Carrying Amount | $ 4,689 | ||
Shares Underlying Notes | Equity_Instrument | 533 | ||
2018 Convertible notes payable - related parties [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.00% | ||
Term of Notes | 2 years | ||
Conversion Price | $ / shares | $ 10 | ||
Principal Outstanding | $ 9,400 | ||
Discount Amount | 871 | ||
Carrying Amount | $ 8,529 | ||
Shares Underlying Notes | Equity_Instrument | 972 | ||
Convertible notes payable - related parties [Member] | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 14,800 | ||
Discount Amount | 1,182 | ||
Carrying Amount | $ 13,618 | ||
Shares Underlying Notes | Equity_Instrument | 1,637 | ||
Principal Outstanding, Current | $ 5,400 | ||
Discount Amount Current | 311 | ||
Convertible notes payable, Current | $ 5,089 | ||
Shares Underlying Notes Current | Equity_Instrument | 665 | ||
Principal Outstanding, Non Current | $ 9,400 | ||
Discount Amount Non Current | 871 | ||
Convertible notes payable, Non Current | $ 8,529 | ||
Shares Underlying Notes Non Current | Equity_Instrument | 972 | ||
[1] | The notes are convertible to EMI Holding, Inc. shares. |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Average stated interest rate | 10.00% | 10.00% |
Average effective interest rate | 12.00% | 35.00% |
Conversion price | $ 10 | |
Warrants [Member] | ||
Debt Instrument [Line Items] | ||
Method of calculation of fair value of warrants | Binominal Monte-Carlo Cliquet Option Pricing Model | Binominal Monte-Carlo Cliquet Option Pricing Model |
10% of Senior Secured Debentures [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
10% of Senior Secured Debentures [Member] | Warrants [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of issued warrants | 10.00% | |
Convertible Debentures [Member] | ||
Debt Instrument [Line Items] | ||
Conversion debentures price | $ 9.52 |
NOTES PAYABLE (Details 3)
NOTES PAYABLE (Details 3) $ in Thousands | Sep. 30, 2019USD ($) |
Long Term Debt By Maturity [Abstract] | |
2019 (three months) | $ 6,079 |
2020 | 13,200 |
Total | $ 19,279 |
NOTES PAYABLE (Details 4)
NOTES PAYABLE (Details 4) - Warrant [Member] - Convertible Notes Payable [Member] | Sep. 30, 2019$ / shares | Dec. 31, 2018$ / shares |
Debt Instrument [Line Items] | ||
Stock price | $ 6.86 | $ 11.10 |
Expected life (in years) | 4 years 3 months 3 days | 5 years |
Exercise Price [Member] | ||
Debt Instrument [Line Items] | ||
Warrants and rights outstanding, measurement input | 5.87 | 11.30 |
Risk-free Interest Rate [Member] | ||
Debt Instrument [Line Items] | ||
Warrants and rights outstanding, measurement input | 1.79 | 3.05 |
Expected Volatility [Member] | ||
Debt Instrument [Line Items] | ||
Warrants and rights outstanding, measurement input | 65 | 70 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | Mar. 05, 2019 | Dec. 29, 2017 | Jun. 10, 2015 | Jun. 10, 2014 | Sep. 11, 2013 | Oct. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jul. 17, 2019 | Sep. 11, 2014 |
Warrants outstanding | 4,931,321 | 4,931,321 | |||||||||||||
Adjustment to additional paid-in capital - warrants | $ 181,000 | $ 5,000 | $ 105,000 | ||||||||||||
Convertible notes principal amount | $ 19,207,000 | $ 19,207,000 | $ 38,239,000 | ||||||||||||
Conversion price | $ 10 | $ 10 | |||||||||||||
Share-based compensation | $ 1,103,000 | $ 3,743,000 | |||||||||||||
Period remaining for recognition of unrecognized compensation cost | 1 year 10 months 24 days | ||||||||||||||
Common Stock [Member] | |||||||||||||||
Issuance of common stock for exercise of warrants | 6,983,350 | 85,410 | |||||||||||||
2011 Stock Incentive Option Plan [Member] | |||||||||||||||
Exercise price - options | $ 7.09 | $ 11.28 | |||||||||||||
Total unrecognized compensation cost | $ 1,700,000 | $ 1,700,000 | |||||||||||||
2011 Stock Incentive Option Plan [Member] | Stock Options [Member] | |||||||||||||||
Share-based compensation | $ 3,500,000 | $ 1,700,000 | |||||||||||||
Adjustment of Merger Exchange Ratio [Member] | 2011 Stock Incentive Option Plan [Member] | |||||||||||||||
Exercise price - options | $ 10.30 | ||||||||||||||
Exercisable term | 10 years | ||||||||||||||
Share-based compensation | $ 1,900,000 | ||||||||||||||
Adjustment of Merger Exchange Ratio [Member] | 2011 Stock Incentive Option Plan [Member] | Officer [Member] | |||||||||||||||
Stock options granted options to purchase common stock | 50,000 | ||||||||||||||
Adjustment of Merger Exchange Ratio [Member] | 2011 Stock Incentive Option Plan [Member] | Share Based Compensation Award, Tranche One [Member] | |||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||
Vesting period | 1 year | ||||||||||||||
Adjustment of Merger Exchange Ratio [Member] | 2011 Stock Incentive Option Plan [Member] | Share Based Compensation Award, Tranche Two [Member] | |||||||||||||||
Vesting percentage | 66.67% | ||||||||||||||
Vesting period | 2 years | ||||||||||||||
Maximum [Member] | Adjustment of Merger Exchange Ratio [Member] | 2011 Stock Incentive Option Plan [Member] | Common Stock [Member] | |||||||||||||||
Stock options granted options to purchase common stock | 357,000 | ||||||||||||||
Amended and Restated Warrants [Member] | |||||||||||||||
Exercise price | $ 5.87 | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | |||||||||||||||
Exercise price | $ 11.30 | ||||||||||||||
Warrants exercisable term | 5 years | ||||||||||||||
Date from which warrants are exercisable | Apr. 22, 2019 | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | T.R. Winston & Company, LLC [Member] | |||||||||||||||
Cash fee paid as percentage of gross proceeds from purchasers | 5.00% | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | Maximum [Member] | T.R. Winston & Company, LLC [Member] | |||||||||||||||
Number of common stock to be purchased | 120,000 | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | Senior Secured Convertible Promissory Note [Member] | |||||||||||||||
Exercise price | $ 10.80 | ||||||||||||||
Warrants to purchase shares of common stock | 240,674 | ||||||||||||||
Percentage of premium dilutive issuance price and number of shares issuable | 10.00% | ||||||||||||||
Warrants exercisable period after issuance | 5 years | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | 10% Redeemable Debenture [Member] | |||||||||||||||
Percentage of monthly payments interest rate | 10.00% | ||||||||||||||
Maturity date | Apr. 21, 2020 | ||||||||||||||
Monthly redemption payment on principal amount | $ 1,000,000 | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | 10% Redeemable Debenture [Member] | Minimum [Member] | |||||||||||||||
Debt instrument redemption amount | $ 20,000,000 | ||||||||||||||
GPB Debt Holdings II, LLC [Member] | Convertible Debt | Senior Secured Convertible Promissory Note [Member] | |||||||||||||||
Convertible notes principal amount | $ 13,000,000 | ||||||||||||||
Convertible notes aggregate purchase price | $ 12,500,000 | ||||||||||||||
Original issue discount percentage | 4.00% | ||||||||||||||
Private Placement [Member] | |||||||||||||||
Units issued in offering | 3,020,501 | ||||||||||||||
Unit price of offering | $ 2.50 | ||||||||||||||
Units issued in offering | $ 7,600,000 | ||||||||||||||
Warrants issued to broker of the offering | 300,000 | ||||||||||||||
Exercise price | $ 3.50 | $ 3.50 | |||||||||||||
Warrants outstanding | 2,225,036 | ||||||||||||||
Fair value of outstanding warrants | $ 1,800,000 | $ 7,100,000 | |||||||||||||
Number of warrants exercised | 1,095,465 | ||||||||||||||
Proceeds from exercise of warrants | $ 3,800,000 | ||||||||||||||
Issuance of common stock for exercise of warrants | 1,095,465 | ||||||||||||||
Adjustment to additional paid-in capital - warrants | $ 1,800,000 | ||||||||||||||
Private Placement [Member] | Replacement Warrants [Member] | |||||||||||||||
Exercise price | $ 3.50 | ||||||||||||||
Warrants outstanding | 1,095,465 | ||||||||||||||
Fair value of outstanding warrants | $ 2,500,000 | ||||||||||||||
Issuance of warrants | 1,095,465 | ||||||||||||||
Warrant exercise inducement expense | $ 3,500,000 | ||||||||||||||
Securities Purchase Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Purchase Agreement With 10% Senior Secured Debentures [Member] | |||||||||||||||
Percentage of monthly payments interest rate | 10.00% | ||||||||||||||
Principal amount of debentures and warrants issued | $ 12,200,000 | ||||||||||||||
Securities Purchase Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Purchase Agreement With 10% Senior Secured Debentures [Member] | Maximum [Member] | |||||||||||||||
Number of common stock to be purchased | 1,220,000 | ||||||||||||||
Securities Amendment Agreement [Member] | GPB Debt Holdings II, LLC [Member] | |||||||||||||||
Maturity date | May 1, 2019 | ||||||||||||||
Monthly redemption payment on principal amount | $ 1,000,000 | ||||||||||||||
Monthly redemptions description | The debenture holders subsequently waived their rights to the monthly redemptions due June 1 and July 1, 2019 respectively. | ||||||||||||||
Securities Amendment Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Maximum [Member] | |||||||||||||||
Exercise price | $ 1.30 | ||||||||||||||
Securities Amendment Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Minimum [Member] | |||||||||||||||
Warrants to purchase shares of common stock | 244,000 | ||||||||||||||
Securities Amendment Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Amended and Restated Debentures [Member] | |||||||||||||||
Maturity date | Oct. 21, 2020 | ||||||||||||||
Monthly redemption payment on principal amount | $ 1,000,000 | ||||||||||||||
Monthly redemption payment, commencement date | Nov. 30, 2019 | ||||||||||||||
Conversion price | $ 10 | ||||||||||||||
Securities Amendment Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Amended and Restated Warrants [Member] | |||||||||||||||
Exercise price | $ 10 | ||||||||||||||
Securities Amendment Agreement [Member] | GPB Debt Holdings II, LLC [Member] | Amended and Restated Warrants [Member] | Maximum [Member] | |||||||||||||||
Warrants to purchase shares of common stock | 1,460,000 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding, ending | 4,931,321 | |
Warrant [Member] | ||
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding, beginning | 3,436,431 | 5,265,432 |
Assumed as part of Merger | 1,044,939 | |
Granted | 500,951 | 1,542,000 |
Exercised | (51,000) | (2,385,317) |
Cancelled, forfeited or expired | (985,684) | |
Warrants outstanding, ending | 4,931,321 | 3,436,431 |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 1) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 4,931,321 |
Total, Exercisable | 4,931,321 |
Warrants Issued in 2015 - Exercise Price $4.67 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 115,953 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 5 months 4 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.67 |
Total, Exercisable | 115,953 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.67 |
Warrants Issued in 2015 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 115,953 |
Total, Exercisable | 115,953 |
Warrants Issued in 2016 - Exercise Price $4.29 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 124,703 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 1 year 9 months 10 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.29 |
Total, Exercisable | 124,703 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.29 |
Warrants Issued in 2016 - Exercise Price $4.48 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 78,760 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 1 year 7 months 2 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.48 |
Total, Exercisable | 78,760 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.48 |
Warrants Issued in 2016 - Exercise Price $4.76 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 1,365,189 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 1 year 7 months 9 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.76 |
Total, Exercisable | 1,365,189 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.76 |
Warrants Issued in 2016 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 1,568,652 |
Total, Exercisable | 1,568,652 |
Warrants Issued in 2017 - Exercise Price $ 10.28 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 252,802 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 3 years 9 months |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 10.28 |
Total, Exercisable | 252,802 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 10.28 |
Warrants Issued in 2017 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 252,802 |
Total, Exercisable | 252,802 |
Warrants Issued in 2018 - Exercise Price $ 10.76 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 210,553 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 3 years 10 months 9 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 10.76 |
Total, Exercisable | 210,553 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 10.76 |
Warrants Issued in 2018 - Exercise Price $ 5.87 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 1,407,188 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 4 years 21 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 5.87 |
Total, Exercisable | 1,407,188 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.87 |
Warrants Issued in 2018 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 1,617,741 |
Total, Exercisable | 1,617,741 |
Warrants Issued in 2019 - Exercise Price $ 6.12 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 32,391 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 4 years 7 months 28 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 6.12 |
Total, Exercisable | 32,391 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 6.12 |
Warrants Issued in 2019 - Exercise Price $ 12.00 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 76,575 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 3 years 11 months 23 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 12 |
Total, Exercisable | 76,575 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 12 |
Warrants Issued in 2019 - Exercise Price $ 14.04 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 174,999 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 3 years 6 months |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 14.04 |
Total, Exercisable | 174,999 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 14.04 |
Warrants Issued in 2019 - Exercise Price $ 31.50 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 737,975 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 9 months 25 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 31.50 |
Total, Exercisable | 737,975 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 31.50 |
Warrants Issued in 2019 - Exercise Price $ 36.24 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 22,333 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 9 months 25 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 36.24 |
Total, Exercisable | 22,333 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 36.24 |
Warrants Issued in 2019 - Exercise Price $ 60.00 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 666 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 1 year 3 months |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 60 |
Total, Exercisable | 666 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 60 |
Warrants Issued in 2019 - Exercise Price $ 5.87 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 256,234 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 4 years 29 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 5.87 |
Total, Exercisable | 256,234 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.87 |
Warrants Issued in 2019 - Exercise Price $ 7.68 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 75,000 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 4 years 9 months 18 days |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 7.68 |
Total, Exercisable | 75,000 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 7.68 |
Warrants Issued in 2019 [Member] | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants Issued, Outstanding | 1,376,173 |
Total, Exercisable | 1,376,173 |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details 2) - 2011 Stock Incentive Option Plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Number of Options outstanding, beginning | 6,642,200 | 6,775,200 |
Number of Options, Granted or deemed granted | 636,683 | 357,000 |
Number of Options, Exercised | (200) | (170,000) |
Number of Options, Cancelled, forfeited and expired | (33,333) | (320,000) |
Number of Options outstanding, end | 7,245,350 | 6,642,200 |
Number of Options, Options exercisable | 6,987,464 | 5,958,783 |
Number of Options, Options available for future grant | 2,167,150 | 2,357,800 |
Weighted-average exercise price, Options outstanding, beginning | $ 4.40 | $ 4.12 |
Weighted-average exercise price, Granted or deemed granted | 7.09 | 11.28 |
Weighted-average exercise price, Exercised | 5 | 4.59 |
Weighted-average exercise price, Cancelled, forfeited and expired | 11.30 | 6.06 |
Weighted-average exercise price, Options outstanding, end | 4.68 | 4.40 |
Weighted-average exercise price, Options exercisable | $ 4.46 | $ 3.87 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018USD ($)ft² | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | |
Leases [Line Items] | |||||
Rent expense | $ | $ 286,000 | $ 191,000 | $ 705,000 | $ 493,000 | |
Weighted average remaining lease term | 6 years 6 months | 6 years 6 months | |||
Weighted average discount rate | 13.10% | 13.10% | |||
Torrance, California [Member] | |||||
Leases [Line Items] | |||||
Operating lease, leased space | ft² | 13,734 | 13,734 | |||
Operating lease, base rental per month | $ | $ 48,087 | ||||
Operating lease, additional space for rent | ft² | 7,559 | 1,600 | 1,600 | ||
Operating lease, commencing date | Sep. 9, 2019 | ||||
Operating lease, base rent per month for additional space | $ | $ 27,590 | $ 2,240 | |||
Operating lease base rent payable commencing date | Jan. 1, 2020 | ||||
Operating lease, expiration date | May 31, 2026 | Jan. 31, 2020 | |||
New York [Member] | |||||
Leases [Line Items] | |||||
Operating lease, additional space for rent | ft² | 2,986 | 2,986 | |||
Operating lease, base rent per month for additional space | $ | $ 5,500 | ||||
Operating lease, expiration date | Dec. 30, 2019 | ||||
Tokyo, Japan [Member] | |||||
Leases [Line Items] | |||||
Operating lease, leased space | ft² | 1,322 | 1,322 | |||
Operating lease, expiration date | Sep. 30, 2020 |
LEASES (Details)
LEASES (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (three months) | $ 184 |
2020 | 900 |
2021 | 978 |
2022 | 1,006 |
2023 and thereafter | 3,668 |
Total lease payments | 6,736 |
Less: Interest | 2,178 |
Present value of lease liabilities | $ 4,558 |
LEASES (Details 1)
LEASES (Details 1) $ in Thousands | Dec. 31, 2018USD ($) |
Future minimum lease payments | |
2019 | $ 730 |
2020 | 974 |
2021 | 973 |
2022 | 1,003 |
2023 and thereafter | 3,665 |
Total | $ 7,345 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Telcon, Inc. ("Telcon") [Member] ₩ / shares in Units, $ / shares in Units, $ in Millions | Oct. 31, 2018$ / shares | Sep. 29, 2017$ / sharesshares | Jul. 12, 2017USD ($)Numberkg$ / kg | Jun. 12, 2017USD ($)$ / sharesshares | Jun. 12, 2017KRW (₩)₩ / shares | Jul. 31, 2017USD ($) | Jul. 31, 2017KRW (₩)₩ / shares | Sep. 30, 2019$ / shares$ / kg | Sep. 30, 2019₩ / shares$ / kg | Dec. 31, 2018$ / shares | Dec. 31, 2018₩ / shares |
Investment | $ 31.8 | ₩ 36,001,446,221 | |||||||||
Investment, in per share | ₩ / shares | ₩ 5,419 | ||||||||||
Investment, closing price | (per share) | $ 4.16 | ₩ 4,995 | $ 7.43 | ₩ 8,280 | |||||||
Number of shares purchased | shares | 4,444,445 | ||||||||||
Price per share | $ / shares | $ 6.60 | ||||||||||
Share repurchases, initial price per share | $ / shares | $ 7.60 | ||||||||||
Management Control Acquistion Agreement [Member] | |||||||||||
Investment | $ 31.8 | ||||||||||
Management Control Acquistion Agreement [Member] | Korea (South), Won | |||||||||||
Investment | ₩ | ₩ 36,000,000,000 | ||||||||||
API Supply Agreement [Member] | |||||||||||
Investment, closing price | $ / shares | $ 4.79 | ||||||||||
Proceeds from supply agreement | $ 31.8 | ||||||||||
API Supply Agreement [Member] | Pharmaceutical Grade L-glutamine [Member] | |||||||||||
Percentage of right to supply | 25.00% | 25.00% | |||||||||
Agreement term | 15 years | 15 years | |||||||||
API Supply Agreement [Member] | Korea (South), Won | |||||||||||
Shares originally purchased (in shares) | shares | 6,643,559 | ||||||||||
Investment, in per share | ₩ / shares | ₩ 5,419 | ||||||||||
Proceeds from supply agreement | ₩ | ₩ 36,000,000,000 | ||||||||||
Raw Material Supply Agreement [Member] | |||||||||||
Agreement term | 5 years | ||||||||||
Number of renewals | Number | 10 | ||||||||||
Raw Material Supply Agreement [Member] | Pharmaceutical Grade L-glutamine [Member] | |||||||||||
Weight of drug per supply agreement | kg | 940,000 | ||||||||||
Unit price of grade L-glutamine | $ / kg | 50 | 19 | 19 | ||||||||
Monthly purchase amount | $ 0.4 | ||||||||||
Purchase amount | $ 47 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($)Equity_Instrument$ / shares | Dec. 31, 2018USD ($)Equity_Instrument$ / shares | ||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | $ 19,207 | $ 38,239 | |||
Conversion price | $ / shares | $ 10 | ||||
Shares Underlying Notes | Equity_Instrument | 1,648 | 6,499 | |||
Lan T. Tran [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10.00% | [1] | 10.00% | [2] | |
Date of Loan | Apr. 29, 2016 | [1] | Apr. 29, 2016 | [2] | |
Term of Loan | Due on Demand | [1] | Due on Demand | [2] | |
Principal Amount Outstanding | $ 20 | [1] | $ 20 | [2] | |
Highest Principal Outstanding | $ 20 | [1] | $ 20 | [2] | |
Hope Hospice [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [3] | 10.00% | 10.00% | ||
Date of Loan | [3] | Jun. 3, 2016 | Jun. 3, 2016 | ||
Term of Loan | [3] | Due on Demand | Due on Demand | ||
Principal Amount Outstanding | [3] | $ 250 | |||
Highest Principal Outstanding | [3] | $ 250 | $ 250 | ||
Amount of Principal Repaid | [3] | 250 | |||
Amount of Interest Paid | [3] | $ 78 | |||
Lan T. Tran [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10.00% | [1] | 10.00% | [2] | |
Date of Loan | Feb. 9, 2017 | [1] | Feb. 9, 2017 | [2] | |
Term of Loan | Due on Demand | [1] | Due on Demand | [2] | |
Principal Amount Outstanding | [2] | $ 12 | |||
Highest Principal Outstanding | $ 12 | [1] | $ 12 | [2] | |
Yutaka Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10.00% | [1],[4] | 10.00% | [2],[5] | |
Date of Loan | Sep. 14, 2017 | [1],[4] | Sep. 14, 2017 | [2],[5] | |
Term of Loan | Due on Demand | [1],[4] | Due on Demand | [2],[5] | |
Principal Amount Outstanding | [2],[5] | $ 27 | |||
Highest Principal Outstanding | $ 904 | [1],[4] | 904 | [2],[5] | |
Amount of Principal Repaid | 27 | [1],[4] | 877 | [2],[5] | |
Amount of Interest Paid | $ 2 | [1],[4] | $ 95 | [2],[5] | |
Lan T. Tran [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 11.00% | [1] | 11.00% | [2] | |
Date of Loan | Feb. 10, 2018 | [1] | Feb. 10, 2018 | [2] | |
Term of Loan | Due on Demand | [1] | Due on Demand | [2] | |
Principal Amount Outstanding | $ 159 | [1] | $ 159 | [2] | |
Highest Principal Outstanding | $ 159 | [1] | 159 | [2] | |
Lan T. Tran [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [1] | 10.00% | |||
Date of Loan | [1] | Feb. 9, 2019 | |||
Term of Loan | [1] | Due on Demand | |||
Principal Amount Outstanding | [1] | $ 14 | |||
Highest Principal Outstanding | [1] | 14 | |||
Promissory Note Payable To Related Parties [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | 193 | 468 | |||
Highest Principal Outstanding | 1,359 | 2,176 | |||
Amount of Principal Repaid | 277 | 1,708 | |||
Amount of Interest Paid | $ 80 | $ 294 | |||
Yasushi Nagasaki [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10.00% | [1] | 10.00% | [2] | |
Date of Loan | Jun. 29, 2012 | [1] | Jun. 29, 2012 | [2] | |
Term of Loan | Due on Demand | [1] | Due on Demand | [2] | |
Principal Amount Outstanding | [2] | $ 200 | |||
Highest Principal Outstanding | $ 200 | [1] | $ 200 | [2] | |
Amount of Principal Repaid | [1] | 200 | |||
Amount of Interest Paid | [1] | $ 56 | |||
Conversion price | $ / shares | $ 3.30 | [1] | $ 3.30 | [2] | |
Shares Underlying Notes | Equity_Instrument | [2] | 74,000 | |||
Yutaka & Soomi Niihara [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10.00% | [1],[4] | 10.00% | [2],[5] | |
Date of Loan | Nov. 16, 2015 | [1],[4] | Nov. 16, 2015 | [2],[5] | |
Term of Loan | 2 years | [1],[4] | 2 years | [2],[5] | |
Principal Amount Outstanding | [2],[5] | $ 200 | |||
Highest Principal Outstanding | $ 200 | [1],[4] | $ 200 | [2],[5] | |
Amount of Principal Repaid | [1],[4] | 200 | |||
Amount of Interest Paid | [1],[4] | $ 73 | |||
Conversion price | $ / shares | $ 4.50 | [1],[4] | $ 4.50 | [2],[5] | |
Shares Underlying Notes | Equity_Instrument | [2],[5] | 58,000 | |||
Wei Peu Zen [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | 10.00% | [4] | 10.00% | [5] | |
Date of Loan | Nov. 6, 2017 | [4] | Nov. 6, 2017 | [5] | |
Term of Loan | 2 years | [4] | 2 years | [5] | |
Principal Amount Outstanding | [5] | $ 5,000 | |||
Highest Principal Outstanding | $ 5,000 | [4] | 5,000 | [5] | |
Amount of Principal Repaid | [4] | 5,000 | |||
Amount of Interest Paid | $ 597 | [4] | $ 250 | [5] | |
Conversion price | $ / shares | $ 10 | [4] | $ 10 | [5] | |
Shares Underlying Notes | Equity_Instrument | [5] | 533,000 | |||
Profit Preview International Group, Ltd. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [6] | 10.00% | 10.00% | ||
Date of Loan | [6] | Feb. 1, 2018 | Feb. 1, 2018 | ||
Term of Loan | [6] | 2 years | 2 years | ||
Principal Amount Outstanding | [6] | $ 4,037 | |||
Highest Principal Outstanding | [6] | $ 4,037 | 4,037 | ||
Amount of Principal Repaid | [6] | 4,037 | |||
Amount of Interest Paid | [6] | $ 385 | $ 202 | ||
Conversion price | $ / shares | [6] | $ 10 | $ 10 | ||
Shares Underlying Notes | Equity_Instrument | [6] | 420,000 | |||
Profit Preview International Group, Ltd. [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [6] | 10.00% | 10.00% | ||
Date of Loan | [6] | Mar. 21, 2018 | Mar. 21, 2018 | ||
Term of Loan | [6] | 2 years | 2 years | ||
Principal Amount Outstanding | [6] | $ 5,363 | |||
Highest Principal Outstanding | [6] | $ 5,363 | 5,363 | ||
Amount of Principal Repaid | [6] | 5,363 | |||
Amount of Interest Paid | [6] | $ 442 | $ 268 | ||
Conversion price | $ / shares | [6] | $ 10 | $ 10 | ||
Shares Underlying Notes | Equity_Instrument | [6] | 552,000 | |||
Convertible notes payable - related party current [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | $ 5,400 | ||||
Highest Principal Outstanding | $ 14,800 | 5,400 | |||
Amount of Principal Repaid | 14,800 | ||||
Amount of Interest Paid | 1,553 | $ 250 | |||
Shares Underlying Notes | Equity_Instrument | 665,000 | ||||
Promissory note payable and convertible notes payable - related party [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | 193 | $ 15,268 | |||
Highest Principal Outstanding | 16,159 | 16,976 | |||
Amount of Principal Repaid | 15,077 | 1,708 | |||
Amount of Interest Paid | $ 1,633 | $ 1,014 | |||
Shares Underlying Notes | Equity_Instrument | 1,637,000 | ||||
Masaharu & Emiko Osato [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [5] | 11.00% | |||
Date of Loan | [5] | Dec. 29, 2015 | |||
Term of Loan | [5] | Due on Demand | |||
Highest Principal Outstanding | [5] | $ 300 | |||
Amount of Principal Repaid | [5] | 300 | |||
Amount of Interest Paid | [5] | $ 76 | |||
Lan T. Tran [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [2] | 11.00% | |||
Date of Loan | [2] | Feb. 10, 2016 | |||
Term of Loan | [2] | Due on Demand | |||
Highest Principal Outstanding | [2] | $ 131 | |||
Amount of Principal Repaid | [2] | 131 | |||
Amount of Interest Paid | [2] | $ 29 | |||
Masaharu & Emiko Osato [Member] | |||||
Short-term Debt [Line Items] | |||||
Interest Rate | [5] | 11.00% | |||
Date of Loan | [5] | Feb. 25, 2016 | |||
Term of Loan | [5] | Due on Demand | |||
Highest Principal Outstanding | [5] | $ 400 | |||
Amount of Principal Repaid | [5] | 400 | |||
Amount of Interest Paid | [5] | 94 | |||
Convertible notes payable - related party non-current [Member] | |||||
Short-term Debt [Line Items] | |||||
Principal Amount Outstanding | 9,400 | ||||
Highest Principal Outstanding | 9,400 | ||||
Amount of Interest Paid | $ 470 | ||||
Shares Underlying Notes | Equity_Instrument | 972,000 | ||||
[1] | Officer. | ||||
[2] | Officer | ||||
[3] | Dr. Niihara, a Director and the Chairman, and Chief Executive Officer of the Company, is also the Chief Executive Officer of Hope Hospice. | ||||
[4] | Director. | ||||
[5] | Director | ||||
[6] | Mr. Zen, a Director of the Company, is the sole owner of Profit Preview International Group, Ltd. |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Nov. 13, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Common stock | $ 2,950,000 | $ 730,000 | $ 2,530,000 | $ 275,000 | |
Common Stock [Member] | |||||
Common stock | $ 1,000 | ||||
Number of Shares Issued | 477,338 | 76,755 | 322,920 | 26,254 | |
Common Stock [Member] | Subsequent Event [Member] | |||||
Common stock | $ 2,400,000 | ||||
Number of Shares Issued | 800,000 |