Electromedical Technologies
Announces Financial and Operational Highlights for the Three Months
Ended March 31, 2022
SCOTTSDALE, AZ -- May 24, 2022 -- InvestorsHub NewsWire --
Electromedical Technologies, Inc. (OTCQB: EMED) ("Electromedical"
or the "Company"), a pioneer in the development and production of
bioelectronic devices designed to relieve chronic, intractable, and
acute pain by using frequencies and electro-modulation, is pleased
to provide its Financial and Operational Highlights for the three
months ended March 31, 2022.
"We continue to drive strong growth on the topline, which is
critical given the inherent scalability of our model and our
capacity to expand with strong margins," noted Matthew Wolfson,
Founder and CEO of Electromedical. "Our flagship device,
the WellnessPro plus, has helped thousands upon thousands of people
over the past 15 years get their lives back and enjoy a pain free
life without the use of opioids. These trends are picking
up in our core business and our focus on investing in marketing and
sales personnel and initiatives continues to pay off and provide a
strong outlook ahead as we move closer toward the commercial launch
of our next generation product line."
Financial Performance Highlights for the Three Months Ended Mar
31, 2022
- Net Sales increased 33% year over year to
$221,894
- Gross Profit increased 24% year over year
- Gross Margin decreased from 75% to 70%, impacted by
additional freight costs to expedite inventory
delivery
- Overall Net Loss dropped 55% year over year to $1.1
million
Operational Highlights for the Three Months Ended Mar 31,
2022
- Continued investments in
Marketing and Sales initiatives.
- Hired Director of Business
and Sales Development with deep industry track record and
experience.
- Made strong R&D gains in
development of new product line targeting October 2022 full
commercial launch.
Management sees the Company's continued strides in topline growth
as further reinforcement for its strategic decision to invest
heavily in sales and marketing, both in terms of personnel and
other key strategies. In particular, the Company's decision to hire
a top industry veteran with a long track record of success, David
Orn, as its new Director of Business and Sales Development has been
important in driving further topline expansion.
Orn added, "My goal for this year is to onboard 100 active
independent medical sales reps, selling the Wellness Pro plus every
month."
Wolfson added, "Q1 was a strong start to an exciting
year with bold steps ahead. I'm proud of our team and grateful for
the new talent we have been adding as we scale our operations, and
I look forward to sharing more with our stakeholders as we push
past new milestones in the months ahead."
About Electromedical Technologies
Headquartered in Scottsdale, Arizona, Electromedical Technologies,
Inc. is a commercial stage, FDA cleared, bioelectronic medical
device manufacturing company initially focused on the treatment of
various chronic, acute, intractable, and post-operative pain
conditions. Through University collaboration agreements, the
Company is working to develop a comprehensive research program in
defining the effects of electro-modulation on the human body. By
studying the impacts of electrical fields in cell signaling and
effects on virus assembly and immune responses, the Company's goal
is to reduce pain and improve overall human wellbeing. The
Company's current FDA cleared product indications are for chronic
acute post traumatic and post-operative, intractable pain
relief.
For more information, please visit www.electromedtech.com.
Note: Nonhuman preliminary studies that we are planning to start
in the near future and their applications are not related to our
current product in any way and are currently not cleared in the
US.
Safe Harbor Statement
This release contains forward-looking statements that are based
upon current expectations or beliefs, as well as a number of
assumptions about future events. Although we believe that the
expectations reflected in the forward-looking statements and the
assumptions upon which they are based are reasonable, we can give
no assurance or guarantee that such expectations and assumptions
will prove to have been correct. Forward-looking statements are
generally identifiable by the use of words like "may," "will,"
"should," "could," "expect," "anticipate," "estimate," "believe,"
"intend," or "project" or the negative of these words or other
variations on these words or comparable terminology. The reader is
cautioned not to put undue reliance on these forward-looking
statements, as these statements are subject to numerous factors and
uncertainties, including but not limited to: adverse economic
conditions, competition, adverse federal, state and local
government regulation, international governmental regulation,
inadequate capital, inability to carry out research, development
and commercialization plans, loss or retirement of key executives
and other specific risks. To the extent that statements in this
press release are not strictly historical, including statements as
to revenue projections, business strategy, outlook, objectives,
future milestones, plans, intentions, goals, future financial
conditions, events conditioned on stockholder or other approval, or
otherwise as to future events, such statements are forward-looking,
and are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements contained in this release are subject to certain risks
and uncertainties that could cause actual results to differ
materially from the statements made.
Corporate Contact:
Electromedical Technologies, Inc.
Tel: 1.888.880.7888
Email: ir@electromedtech.com
https://electromedtech.com
ELECTROMEDICAL
TECHNOLOGIES, INC.
BALANCE SHEETS
(UNAUDITED)
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March 31, 2022
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December 31, 2021
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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170,048
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$
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383,170
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Accounts receivable
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31,790
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35,085
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Inventories
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196,924
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218,510
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Prepaid expenses and other current
assets
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24,930
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38,002
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Total current assets
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423,692
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674,767
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Property and equipment,
net
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721,875
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727,344
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Total assets
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$
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1,145,567
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$
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1,402,111
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LIABILITIES
AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable
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$
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274,251
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$
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214,785
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Credit cards payable
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14,686
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11,283
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Accrued expenses and other current
liabilities
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539,237
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317,037
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Customer deposits
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21,850
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—
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Convertible promissory notes, net of
discount of $492,877 and $723,166, respectively
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1,289,476
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811,687
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Related party notes
payable
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—
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57,875
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Long term debt, current
portion
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30,490
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29,502
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Total current liabilities
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2,169,990
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1,442,169
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Long-term liabilities:
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Bank debt, net of current
portion
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511,613
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518,849
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Government debt, net of current
portion
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153,789
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154,429
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Other liabilities
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9,204
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9,167
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Total liabilities
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2,844,596
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2,124,614
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Commitments and
contingencies
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—
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—
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Stockholders' deficit
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Series A Preferred Stock,
$.00001
par value,
1,000,000
shares
authorized
and 500,000 outstanding
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355,000
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355,000
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Series B Preferred Stock,
$.00001
par value,
1 share authorized and 0 outstanding
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—
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—
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Common stock, $.00001 par value, 500,000,000 and 250,000,000 shares authorized;
104,955,567
and 87,725,842 shares outstanding at March 31, 2022
and December 31, 2021, respectively
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1,048
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876
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Additional paid-in-capital
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20,401,493
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20,804,333
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Accumulated deficit
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(22,456,570)
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(21,882,712)
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Total stockholders'
deficit
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(1,699,029)
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(722,503)
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Total liabilities and stockholders'
deficit
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$
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1,145,567
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$
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1,402,111
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ELECTROMEDICAL
TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH
31,
(UNAUDITED)
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2022
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2021
|
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Net sales
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$
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221,894
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$
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166,440
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Cost of
sales
|
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67,641
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41,951
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Gross profit
|
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154,253
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124,849
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Selling, general and
administrative expenses
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879,810
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1,689,383
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Loss from operations
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(725,557)
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(1,564,534)
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Other income
(expense)
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Interest expense
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(213,379)
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(1,060,302)
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Change in fair market value of
derivative liabilities
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—
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14,798
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Other income (expense)
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—
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(428)
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Loss on extinguishment of
debt
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(205,600)
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—
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Forgiveness of debt
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—
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50,082
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Total other expense
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(418,979)
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(995,850)
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Net loss
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$
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(1,144,536)
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$
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(2,560,384)
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Deemed dividend related to warrant
resets
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(63,381)
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(510,222)
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Net loss attributable
to common stockholders
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(1,207,917)
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(3,070,606)
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Weighted average
shares outstanding - basic and diluted
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97,260,915
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28,558,027
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Weighted average loss
per share - basic and diluted
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$
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(0.01)
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$
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(0.11)
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ELECTROMEDICAL
TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH
31,
(UNAUDITED)
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2022
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2021
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Cash flows from operating
activities:
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Net loss
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$
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(1,144,536)
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$
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(2,560,384)
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Adjustments to reconcile net loss to
net cash used in operating activities:
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Stock-based compensation
expense
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361,603
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1,298,727
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Depreciation and
amortization
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5,469
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5,469
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Forgiveness of debt
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—
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(49,783)
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Loss on extinguishment of
debt
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205,600
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—
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Amortization of debt discount and day
one derivative loss and warrant expense
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164,710
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1,010,601
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Change in fair value of derivative
liabilities- convertible promissory notes
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—
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|
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(14,798)
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Change in operating assets and
liabilities:
|
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Accounts receivable
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3,295
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(4,178)
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Inventories
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21,586
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(129,791)
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Prepaid expenses and other current
assets
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13,072
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161,990
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Other assets
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—
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7,000
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Accounts payable
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|
|
59,466
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(42,284)
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Credit cards payable
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3,403
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(1,057)
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Accrued expenses and other current
liabilities
|
|
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(33,400)
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|
|
9,817
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Customer deposits
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21,850
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(18,301)
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Other liabilities
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37
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(265)
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Net cash used in operating
activities
|
|
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(317,845)
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(327,237)
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Cash flows from financing
activities:
|
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Repayments on bank debt
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(6,888)
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(6,556)
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Related party notes
payable-net
|
|
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(57,875)
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(50,000)
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Issuance of convertible promissory
notes
|
|
|
494,220
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|
712,500
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Repayments on convertible promissory
notes
|
|
|
(367,500)
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|
—
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Repayments on notes
payable
|
|
|
—
|
|
|
(12,846)
|
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Issuance of common stock for cash -
net
|
|
|
42,766
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|
|
—
|
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Net cash provided by financing
activities
|
|
|
104,723
|
|
|
643,098
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|
|
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Net (decrease) increase in cash and
cash equivalents
|
|
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(213,122)
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|
315,861
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Cash and cash equivalents, beginning
of period
|
|
|
383,170
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|
|
264,913
|
|
|
|
|
|
|
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Cash and cash equivalents, end of
period
|
|
$
|
170,048
|
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$
|
580,774
|
|
|
|
|
|
|
|
|
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Supplemental disclosures of cash flow
information:
|
|
|
|
|
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Cash paid during the period
for:
|
|
|
|
|
|
|
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Interest
|
|
$
|
72,308
|
|
$
|
16,356
|
|
Income taxes
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,2022 adoption of
ASU2020-06
|
|
$
|
379,355
|
|
$
|
—
|
|
Warrants, common stock and beneficial
conversion feature issued in conjunction with convertible
promissory notes
|
|
$
|
192,996
|
|
$
|
420,096
|
|
Derivative liabilities issued in
conjunction with convertible promissory notes
|
|
$
|
—
|
|
$
|
974,931
|
|
Conversion of convertible promissory
notes, derivative liabilities and accrued interest into shares of
common stock
|
|
$
|
—
|
|
$
|
380,103
|