Emmaus Life Sciences, Inc. 8-K

What Happened
Emmaus Life Sciences, Inc. (EMMA) filed an 8-K on December 22, 2025 reporting that it entered into an Exchange Agreement that surrendered and cancelled an outstanding $3,000,000 convertible promissory note (the Subject Note). In exchange the company issued 6,332,692 shares of common stock (valued for this purpose at approximately $0.38 per share) and delivered a new convertible promissory note with a $600,000 principal (the Exchange Note). The filing states no additional cash was paid in the exchange.

Key Details

• Subject Note: $3,000,000 principal, 10% annual interest payable semi‑annually; previously convertible at $0.13 per share.
• Exchange Securities: 6,332,692 shares issued plus a $600,000 convertible note; Exchange Note bears 10% interest payable semi‑annually.
• Conversion mechanics: Exchange Note initially convertible at $0.01 per share; conversion price is subject to adjustment at the end of each three‑month period to equal the average VWAP if that VWAP is less than the then‑conversion price, and is further adjustable for stock splits/reverse splits.
• Repayment: Principal of the Exchange Note is due on demand. No additional consideration was paid in the transaction.

Why It Matters
This is a material debt restructuring: the company replaced a $3.0M convertible note with immediate equity (6.33M shares) plus a smaller $600K convertible note. That increases outstanding shares now (dilution) and could lead to additional dilution later because the new note’s conversion price can be adjusted downward to the quarterly VWAP (and starts at $0.01). The Exchange Note is interest‑bearing (10%) and is payable on demand, which creates a potential near‑term cash obligation if the holder demands repayment. Investors should weigh the immediate dilution and the terms of the new convertible note when assessing shareholder value and potential future dilution.