Form 8-K - Current report

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 14, 2023

 

Emmaus Life Sciences, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		001-35527		87-0419387
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

21250 Hawthorne Boulevard, Suite 800, Torrance, CA		90503
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code [phone]

 

 

(Former name or former address, if changed, since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: 

 

Title of each class		Trading Symbol		Name of each exchange on which registered
None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 2.02 Results of Operation and Financial Condition.

 

On August 14, 2023, Emmaus Life Sciences, Inc. issued a press release announcing the results of operations and financial condition as of and for the six months ended June 30, 2023. A copy of the press release is included as Exhibit 99.1 to this Current Report and incorporated herein by reference.

 

The information included in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits

 

(d)       Exhibits

 

See the accompanying Index to Exhibits, which information is incorporated herein by reference.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 14, 2023	Emmaus Life Sciences, Inc.
	By:	/s/ YASUSHI NAGASAKI
		Name:	Yasushi Nagasaki
		Title:	Chief Financial Officer

 

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INDEX TO EXHIBITS

Exhibit Number		Description
99.1		August 14, 2023 press release
104		Cover Page Interactive Date File (embedded within Inline XBRL document)

 

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Exhibit 99.1

 

 

Emmaus Life Sciences Reports Q2 2023 Financial Results

 

Record Net Revenues Contributed to Income from Operations

Sixth Straight Quarterly Increase in Net Revenues

 

Torrance CA, August 14, 2023 - Emmaus Life Sciences, Inc. (OTCQX: EMMA), a commercial-stage biopharmaceutical company and leader in the treatment of sickle cell disease, today reported on its financial condition and results of operations as of and for the three and six months ended June 30, 2023.

 

Recent Highlights

 

“We are pleased to report record net revenues for the quarter and six months ended June 30 owing to a jump in sales in the Middle East North Africa region and continuing recovery in U.S. sales compared to 2022. As a result, we were able to generate over $3.3 million in quarterly income from operations. Net revenue growth accelerated in the quarter, and we hope to continue this trend through the end of the year even without regard to the prospects for potential marketing approval of Endari in the Kingdom of Saudi Arabia,” remarked Yutaka Niihara, M.D., M.P.H., Chairman and Chief Executive Officer of Emmaus.

 

Financial and Operating Results

 

Net Revenues. Net revenues for the three months and six months ended June 30, 2023 were $10.8 million and $17.5 million, respectively, compared to $4.3 million and $7.5 million, respectively, for same periods in 2022. The increased net revenues were primarily attributable to a $4.1 million increase in net revenues from sales in the Middle East North Africa (MENA) region in Q2 2023. Net revenues in Q2 and the three months and six months ended June 30, 2023 also were positively affected by increased U.S. sales compared to the same periods in 2022.

 

Operating Expenses. Total operating expenses for the three months ended June 30, 2023 were $6.9 million, compared with $5.3 million for the same periods in 2022. Of the increased operating expenses in Q2 2023, $0.6 million was attributable to an increase in payroll expenses related to sales personnel and $1.0 million increase in general and administrative expenses. Total operating expenses for the six months ended June 30, 2023 were $14.4 million, compared with $10.6 million for the same period in 2022. The increase was due to a $1.2 million increase in share-based compensation, a $0.8 million increase in payroll expenses and a $0.6 million increase in consulting fees.

 

Income From Operations. Income from operations for the three months ended June 30, 2023 was $3.3 million, compared to a loss from operations of $1.4 million in the same periods in 2022. Income from operations for the six months ended June 30, 2023 increased to $2.2 million, compared to a loss from operations of $4.5 million for the same period last year. The increase income from operation resulted from higher new revenues in 2023 compared to 2022. Income from operations in Q2 2023 also increased by $4.5 million, or 385%, from $1.2 million loss from operations in Q1 2023 as a result of the increase in net revenues in Q2 2023.

 

 

 

 

Other Expense. Other expenses decreased to $4.8 million for the three months ended June 30, 2023, compared to $7.3 million in the same period in 2022. Other expenses for the six months ended June 30, 2023 increase to $7.2 million from $5.8 million in the same period in 2022. Other expenses in Q2 2023 included a decrease of $2.6 million in change in fair value of embedded conversion option of convertible promissory notes, partially offset by a $0.5 million increase in interest expense compared to Q2 2022.

 

Net Loss. For the quarter, the company realized a net loss of $1.5 million, or $0.03 per share based on approximately 52.9 million weighted average basic and diluted common shares. This compares to a net loss of $8.9 million, or $0.18 per share based on approximately 49.3 million weighted average basic and diluted common shares for the second quarter of 2022. The decrease in net loss was primarily attributable to the increase in income from operations and decrease in other expenses discussed above.

 

For the six months ended June 30, 2023, the company reported a net loss of $5.0 million, or $0.10 per share, based on approximately 51.8 million weighted average basic and diluted common shares. This compares to a net loss of $10.4 million, or $0.21 per share, based on approximately 49.3 million weighted average basic and diluted common shares for the six months ended June 30, 2022. The decrease was due to the increase in net revenues, partially offset by the increase in operating expenses.

 

Liquidity and Capital Resources. On June 30, 2023, the company had cash and cash equivalents of $1.4 million, compared with $2.0 million on December 31, 2022.

 

About Emmaus Life Sciences

 

Emmaus Life Sciences, Inc. is a commercial-stage biopharmaceutical company and leader in the treatment of sickle cell disease. Endari® (L-glutamine oral powder), indicated to reduce the acute complications of sickle cell disease in adults and children 5 years and older, is approved for marketing in the United States, Israel, Kuwait, Qatar, the United Arab Emirates, Bahrain and Oman and is available on a named patient or early access basis in France, the Netherlands, and the Kingdom of Saudi Arabia, where Emmaus’ application for marketing authorization is awaiting final action by the Saudi Food & Drug Authority. For more information, please visit www.emmausmedical.com.

 

About Endari® (prescription grade L-glutamine oral powder) Endari®, Emmaus’ prescription grade L-glutamine oral powder, was approved by the U.S. Food and Drug Administration (FDA) in July 2017 for treating sickle cell disease in adult and pediatric patients five years of age and older.

 

Indication

 

Endari® is indicated to reduce the acute complications of sickle cell disease in adult and pediatric patients five years of age and older.

 

Important Safety Information

 

The most common adverse reactions (incidence >10 percent) in clinical studies were constipation, nausea, headache, abdominal pain, cough, pain in extremities, back pain, and chest pain.

 

Adverse reactions leading to treatment discontinuation included one case each of hypersplenism, abdominal pain, dyspepsia, burning sensation, and hot flash.

 

The safety and efficacy of Endari® in pediatric patients with sickle cell disease younger than five years of age has not been established.

 

For more information, please see full Prescribing Information of Endari® at: www.ENDARIrx.com/PI.

 

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About Sickle Cell Disease

 

There are approximately 100,000 people living with sickle cell disease (SCD) in the United States and millions more globally. The sickle gene is found in every ethnic group, not just among those of African descent; and in the United States an estimated 1-in-365 African Americans and 1-in-16,300 Hispanic Americans are born with SCD.¹ The genetic mutation responsible for SCD causes an individual's red blood cells to distort into a "C" or a sickle shape, reducing their ability to transport oxygen throughout the body. These sickled red blood cells break down rapidly, become very sticky, and develop a propensity to clump together, which causes them to become stuck and cause damage within blood vessels. The result is reduced blood flow to distal organs, which leads to physical symptoms of incapacitating pain, tissue and organ damage, and early death.²

 

¹Source: Data & Statistics on Sickle Cell Disease – National Center on Birth Defects and Developmental Disabilities, Centers for Disease Control and Prevention, December 2020.
²Source: Committee on Addressing Sickle Cell Disease – A Strategic Plan and Blueprint for Action -- National Academy of Sciences Press, 2020.

 

Forward-looking Statements

 

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the trend in sales in the MENA region and in the U.S. and need for related-party loans or other financing needed to meet our current liabilities and fund our business and operations. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time, including factors disclosed in the company’s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023 filed with the Securities and Exchange Commission on March 31, 2023, May 15, 2023 and August 14, 2023, respectively, and actual results may differ materially. Such forward-looking statements speak only as of the date they are made, and Emmaus assumes no duty to update them, except as may be required by law.

 

Company Contact:

Emmaus Life Sciences, Inc.

Willis Lee

Chief Operating Officer

[phone], Ext. 1130

[e-mail]

 

(Financial Tables Follow)

 

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Emmaus Life Sciences, Inc.

Condensed Consolidated Statement of Operations and Comprehensive Income Loss

 (In thousands, except share and per share amounts) (Unaudited)

 

		Three Months Ended June 30								Six Months Ended June 30
		2023				2022				2023				2022
Revenues, Net		$	10,759			$	4,287			$	17,512			$	7,521
Cost of Goods Sold			508				396				937				1,403
Gross Profit			10,251				3,891				16,575				6,118
Operating Expenses			6,925				5,331				14,414				10,626
Income (Loss) from Operations			3,326				(1,440	)			2,161				(4,508	)
Total Other Expenses			(4,842	)			(7,270	)			(7,155	)			(5,847	)
Net Loss			(1,482	)			(8,892	)			(5,009	)			(10,434	)
Comprehensive Income (Loss)			1,381				(12,664	)			(2,504	)			(13,518	)
Net Loss Per Share		($	0.03	)		($	0.18	)		($	0.10	)		($	0.21	)
Weighted Average Common Shares Outstanding			52,865,353				49,319,995				51,793,445				49,315,952

 

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Emmaus Life Sciences, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

		As of
		June 30, 2023				December 31, 2022
		(Unaudited)
Assets
Current Assets:
Cash and cash equivalents		$	1,361			$	2,021
Accounts receivable, net			5,573				375
Inventories, net			1,814				2,379
Prepaid expenses and other current assets			1,099				1,514
Total Current Assets			9,847				6,289
Property and equipment, net			68				75
Equity method investment			18,302				18,828
Right of use assets			2,585				2,799
Investment in convertible bond			19,210				19,971
Other Assets			276				263
Total Assets		$	50,288			$	48,225
Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses		$	15,200			$	13,549
Conversion feature derivative, notes payable			4,217				3,248
Notes payable, current portion			8,462				6,814
Convertible notes payable, net of discount			14,306				14,655
Other current liabilities			19,362				16,057
Total Current Liabilities			61,547				54,323
Notes payable, less current portion			0				380
Other long-term liabilities			23,773				27,613
Total Liabilities			85,320				82,316
Stockholders’ Deficit			(35,032	)			(34,091	)
Total Liabilities & Stockholders’ Deficit		$	50,288			$	48,225

 

 

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Cover	Aug. 14, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 14, 2023
Entity File Number	001-35527
Entity Registrant Name	Emmaus Life Sciences, Inc.
Entity Central Index Key	0000822370
Entity Tax Identification Number	87-0419387
Entity Incorporation, State or Country Code	DE
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
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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