10-Q - EMED - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MarkOne)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30,2020.

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission File Number 000-56192

ELECTROMEDICAL TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware<br><br> <br>(State or<br>Other Jurisdiction <br><br>of Incorporation)	5047<br><br> <br>(Primary Standard Industrial<br><br> <br>Classification Code Number)	82-2619815<br><br> <br>(I.R.S. Employer<br><br> <br>Identification No.)
16561 N. 92^nd^ Street, Ste. 101
---	---
Scottsdale, AZ	85260
(Address of principal executive offices)	(Zip Code)

(303) 974-4770

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	x

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). ¨

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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

On September 30, 2020, 28,810,348 shares of common stock were outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS:	1
	CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30,<br> 2020 (UNAUDITED) AND DECEMBER 31, 2019	1
	CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE<br> AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)	2
	CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’<br> EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)	3
	CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE<br> MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)	5
	NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS	6
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT<br> MARKET RISK	29
Item 4.	CONTROLS AND PROCEDURES	29
PART II. OTHER INFORMATION		30
Item 1.	LEGAL PROCEEDINGS	30
Item 1A.	RISK FACTORS	30
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND<br> USE OF PROCEEDS	30
Item 3.	DEFAULTS UPON SENIOR SECURITIES	30
Item 4.	MINE SAFETY DISCLOSURE	30
Item 5.	OTHER INFORMATION	31
Item 6.	EXHIBITS	31
SIGNATURES		32

ITEM 1. FINANCIAL STATEMENTS

ELECTROMEDICALTECHNOLOGIES, INC.

BALANCE SHEETS

(UNAUDITED)

			December 31,<br><br> <br>2019
ASSETS
Current assets:
Cash and cash equivalents	85,477		$	-
Accounts receivable	16,841			15,667
Inventories	62,500			24,694
Prepaid expenses and other current assets	209,791			65,831
Total current assets	374,609			106,192
Other assets	85,601			25,580
Property and equipment, net	754,688			771,094
Total assets	1,214,898		$	902,866
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	308,198		$	251,162
Credit cards payable	22,531			31,009
Accrued expenses and other current liabilities	254,038			289,791
Customer deposits	64,780			40,120
KISS liability - related party	-			1,444,761
Convertible promissory notes, net of discount of 684,855	86,145			50,000
Related party notes payable	357,500			105,000
PPP Loan	39,500			-
Notes payable	17,846			59,153
Long term debt, current portion	27,236			25,595
Derivative liabilities	194,307			-
Total current liabilities	1,372,081			2,296,591
Long-term liabilities:
Bank debt, net of current portion	553,203			566,406
Government debt, net of current portion	154,991			-
Related party notes payable	-			213,000
Other liabilities	18,794			11,306
Total liabilities	2,099,069			3,087,303
Commitments and contingencies	-			-
Stockholders’ deficit
Series A Preferred Stock, 1,000,000 shares authorized and 500,000 outstanding	355,000			355,000
Common stock, .00001 par value, 50,000,000 shares authorized; 28,810,348 and 17,900,639 shares outstanding as of September 30, 2020 and December 31, 2019, respectively	286			177
Additional paid-in- capital	7,474,723			2,713,087
Accumulated deficit	(8,714,180	)		(5,252,701	)
Total stockholders’ deficit	(884,171)	)		(2,184,437	)
Total liabilities and stockholders’ deficit	1,214,898		$	902,866

All values are in US Dollars.

See accompanying notes to financial statements

| 1 |

| --- |

ELECTROMEDICALTECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2020			2019			2020			2019
Net sales	$	205,850		$	270,128		$	557,476		$	625,020
Cost of sales		57,383			75,202			139,892			181,409
Gross profit		148,467			194,926			417,584			443,611
Selling, general and administrative expenses		2,243,377			373,402			3,768,196			1,598,029
Loss from operations		(2,094,910	)		(178,476	)		(3,350,612	)		(1,154,418	)
Other income (expense)
Interest expense		(52,658	)		(10,601	)		(82,168	)		(35,342	)
Change in fair value of related party KISS liability		-			(1,553	)		(7,784	)		(41,257	)
Change in fair value of derivative liabilities		(22,415	)		-			(22,415	)		-
Other income		-			-			1,500			-
Total other expense		(75,073	)		(12,154	)		(110,867	)		(76,599	)
Net loss	$	(2,169,983	)	$	(190,630	)	$	(3,461,479	)	$	(1,231,017	)
Weighted average shares outstanding- basic and diluted		21,875,068			16,681,043			20,201,697			16,567,820
Weighted average loss per share- basic and diluted	$	(0.10	)	$	(0.01	)	$	(0.17	)	$	(0.07	)

See accompanying notes to financial statements

| 2 |

| --- |

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(UNAUDITED)

														Total
	Preferred Stock				Common Stock				Paid in		Accumulated			Stockholders’
	Amount		Shares		Amount		Shares		Capital		Deficit			Deficit
Balance, December 31,<br> 2018	$	-		-	$	162		16,320,823	$	1,447,960	$	(3,508,362	)	$	(2,060,240	)
Issuance of common stock for cash		-		-		1		104,506		79,999		-			80,000
Shares issued for consulting services		-		-		1		150,000		106,500		-			106,501
												-
Shares issued for software development services		-		-		-		50,000		35,500		-			35,500
Stock-based compensation		-		-		-		-		513,644		-			513,644
Net loss		-		-		-		-		-		(818,969	)		(818,969	)
Balance, March 31,<br> 2019	$	-		-	$	164		16,625,329	$	2,183,603	$	(4,327,331	)	$	(2,143,564	)
Issuance of common stock for cash		-		-		-		-		-		-			-
Shares issued for consulting services		-		-		1		43,461		30,855		-			30,856
Stock-based compensation		-		-		-		-		40,688		-			40,688
Net loss		-		-		-		-		-		(221,418	)		(221,418	)
Balance, June 30,<br> 2019	$	-		-	$	165		16,668,790	$	2,255,146	$	(4,548,749	)	$	(2,293,438	)
Issuance of common<br> stock for cash		-		-		-		42,253		30,000		-			30,000
Shares issued<br> for consulting services		-		-		-		20,000		14,200		-			14,200
Stock-based compensation		-		-		-		-		48,428		-			48,428
Net loss		-		-		-		-		-		(190,630	)		(190,630	)
Balance, September<br> 30, 2019	$	-		-	$	165		16,731,043	$	2,347,774	$	(4,739,379	)	$	(2,391,440	)

See accompanying notes to financial statements

| 3 |

| --- |

ELECTROMEDICALTECHNOLOGIES, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(UNAUDITED)

														Total
	Preferred Stock				Common Stock				Paid in		Accumulated			Stockholders’
	Amount		Shares		Amount		Shares		Capital		Deficit			Deficit
Balance, December 31, 2019	$	355,000		500,000	$	177		17,900,639	$	2,713,087	$	(5,252,701	)	$	(2,184,437	)
Shares issued in conjunction with vendor settlement		-		-		-		10,355		7,352		-			7,352
Shares issued for consulting services		-		-		6		600,000		289,994		-			290,000
Stock-based compensation		-		-		-		-		5,265		-			5,265
Net loss		-		-		-		-		-		(451,241	)		(451,241	)
Balance, March 31, 2020	$	355,000		500,000	$	183		18,510,994	$	3,015,698	$	(5,703,942	)	$	(2,333,061	)
Shares issued in conjunction with convertible promissory note		-		-		1		100,000		42,968		-			42,969
Beneficial conversion feature in conjunction with convertible promissory note		-		-		-		-		8,800		-			8,800
Shares issued to employee for services		-		-		20		2,000,000		599,980		-			600,000
Warrant issued for services		-		-		-		-		85,380		-			85,380
Issuance of common stock for cash		-		-		1		142,857		49,999		-			50,000
Stock-based compensation		-		-		-		-		5,481		-			5,481
Net loss		-		-		-		-		-		(840,255	)		(840,255	)
Balance, June 30, 2020	$	355,000		500,000	$	205		20,753,851	$	3,808,306	$	(6,544,197	)	$	(2,380,686	)
Beneficial conversion feature in conjunction with convertible<br> promissory notes		-		-		-		-		390,000		-			390,000
Conversion of KISS liability- related party shares		-		-		72		7,156,497		1,452,473		-			1,452,545
Shares issued for consulting services		-		-		9		900,000		1,817,991		-			1,818,000
Stock-based compensation		-		-		-		-		5,953		-			5,953
Net loss		-		-		-		-		-		(2,169,983	)		(2,169,983	)
Balance, September 30, 2020	$	355,000		500,000	$	286		28,810,348	$	7,474,723	$	(8,714,180)		$	(884,171	)

See accompanying notes to financial statements

| 4 |

| --- |

ELECTROMEDICALTECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

	2020			2019
Cash flows from operating activities:
Net loss	$	(3,461,479	)	$	(1,231,017	)
Adjustments to reconcile net loss to net cash used in operating activities:
Financing costs on put option liability		-			76,931
Provision for allowance for doubtful accounts		3,765			-
Stock-based compensation expense		2,761,848			754,317
Depreciation and amortization		16,406			18,988
Change in excess fair value of KISS liability- related party		7,784			41,257
Amortization of debt discount		33,038			-
Change in fair value of derivative liabilities		22,415			-
Change in operating assets and liabilities:
Accounts receivable		(4,939	)		(2,239	)
Inventories		(37,806	)		(29,847	)
Prepaid expenses and other current assets		(128,960	)		105,100
Due from Chief Executive Officer		-			10,256
Other assets		(60,021	)		-
Accounts payable		57,036			82,434
Credit cards payable		(8,478	)		(9,942	)
Accrued expenses and other current liabilities		(28,401	)		91,515
Customer deposits		24,660			(95,300	)
Other liabilities		7,488			-
Net cash used in operating activities		(795,644	)		(187,547	)
Cash flows from financing activities:
Repayments on short-term financing		(40,308	)		-
Proceeds from PPP loan		39,500			-
Issuance of convertible promissory note		665,000			-
Repayments on bank debt		(12,471	)		(17,992	)
Related party notes payable-net		24,500			203,000
Proceeds from government debt		155,900			-
Repayments on notes payable		(1,000	)		(107,461	)
Issuance of common stock for cash- net		50,000			110,000
Net cash provided by financing activities		881,121			187,547
Net decrease in cash and cash equivalents		85,477			-
Cash and cash equivalents, beginning of period		-			-
Cash and cash equivalents, end of period	$	85,477		$	-
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	37,408		$	14,805
Taxes	$	-		$	-
Non-cash investing and financing activities:
Issuance of 50,000 shares of stock and put option liability for prepaid software	$	-		$	71,200
Shares issued in conjunction with vendor settlement	$	7,352		$	-
Warrants, common stock and beneficial conversion feature issued in conjunction with convertible promissory note	$	490,000		$	-
Conversion of Kiss liability-related party to common stock	$	1,452,545		$	-
Discount in<br> convertible notes payable due to derivative liabilities	$	171,892		$	-

See accompanying notes to financial statements

| 5 |

| --- |

ELECTROMEDICALTECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1.	ORGANIZATION AND NATURE OF BUSINESS

Electro Medical Technologies, LLC (“the Company”), was formed in November 2010 as an Arizona limited liability company. In August 2017, the Company converted to a Delaware C Corporation under Electromedical Technologies, Inc. The Company is a bioelectronic engineering company with medical device certifications in the United States (FDA) and Mexico (Cofepris). The Company engineers simple-to-use portable bioelectronics devices, which provide fast and long -lasting pain relief across a broad range of ailments.

NOTE 2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Method

The accompanying unaudited financial statements of Electromedical Technologies, Inc. have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”) for interim financial information and in accordance with Rule 8-03 of Regulation S-X per Regulation A requirements. Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. These interim financial statements should be read in conjunction with the audited annual financial statements of the Company as of and for the year ended December 31, 2019. The results of operations for the three months and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, certain disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates affecting the financial statements have been prepared on the basis of the most current and best available information. However, actual results from the resolution of such estimates and assumptions may vary from those used in the preparation of the financial statements.

Going Concern

Since inception, the Company has incurred approximately $8.7 million of accumulated net losses. In addition, during the nine months ended September 30, 2020, the Company used $795,644 of cash from operations and had a working capital deficit of $997,472. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company expects to obtain funding through additional debt and equity placement offerings until it consistently achieves positive cash flows from operations. If the Company is unable to obtain additional funding, it may not be able to meet all of its obligations as they come due for the next twelve months. The continuing viability of the entity and its ability to continue as a going concern is dependent upon the entity being successful in its continuing efforts in growing its revenue base and/or accessing additional sources of capital, and/or selling assets.

As a result, there is significant uncertainty whether the entity will continue as a going concern and, therefore, whether it will realize its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial statements.

| 6 |

| --- |

Accordingly, no adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the entity not continue as a going concern. At this time, management is of the opinion that no asset is likely to be realized for an amount less than the amount at which it is recorded in the financial statements as at September 30, 2020.

Revenue Recognition

The FASB issued Accounting Standards Update (“ASU”) No. 2014-09, codified as ASC 606: Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted ASC 606 effective January 1, 2019 using modified retrospective basis and the cumulative effect was immaterial to the financial statements. In addition, the comparative prior period has not been restated.

Revenues are recognized when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities, allowance for estimated returns, chargebacks, and markdowns based upon management’s estimates and the Company’s historical experience. The Company’s liability for sales return refunds is recognized within other current liabilities, and an asset for the value of inventory which is expected to be returned is recognized within other current assets on the balance sheets. The Company generally allows a 30 day right of return to its customers. As of September 30, 2020, and December 31, 2019, the sales returns allowance was $6,990 and $3,225, respectively.

Certain larger customers pay in advance for future shipments. These advance payments totaled $64,780 and $40,120 at September 30, 2020 and December 31, 2019, respectively, and are recorded as customer deposits in the accompanying balance sheets. Revenue related to these advance payments is recognized upon shipment to the distributor or the end-customer.

At the completion of the initial three-year warranty, the Company sells extended warranties for periods ranging from one to three years. Revenue is recognized on a straight-line basis over the term of the contract. As of September 30, 2020 and December 31, 2019, deferred revenue of $38,796 and $24,177, respectively is recorded in connection with these extended warranties.

| 7 |

| --- |

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts, and the Company generally does not require collateral. As a general policy, the Company determines an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

The Company recorded an allowance for doubtful accounts of $1,000 at both September 30, 2020 and December 31, 2019,

Financial Instruments and Concentrations of Business and Credit Risk

The Company elected early adoption of the Accounting Standards Update (“ASU”) 2016-01, Recognition and Measurement of Financial Assets and Liabilities, which eliminates the requirement of the Company to disclose the fair value of its financial instruments as of the balance sheet date. Financial instruments that potentially subject the Company to concentrations of business and credit risks consist of cash and cash equivalents, accounts receivable, and accounts payable.

The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk.

The Company’s accounts receivable, which are unsecured, expose the Company to credit risks such as collectability and business risks such as customer concentrations. The Company mitigates credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic review of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. The Company mitigates business risks by attempting to diversify its customer base.

The Company had three significant customers (“Customers A, B and C”) for the three months ended September 30, 2020 that accounted for approximately 19.3%, 15.2% and 10.7%, respectively, of net sales, and one significant customer for the three months ended September 30, 2019 (“Customer A”), that accounted for approximately 10.0% of net sales. Customer A and Customer B accounted for 17.2% and 12.9% of net sales for the nine months ended September 30, 2020, respectively. Customer A accounted for 15.1% of net sales for the nine months ended September 30, 2019, respectively. There were no amounts outstanding from these customers as of September 30, 2020 and December 31, 2019. Amounts due these customers totaled $0 and $3,100 as of September 30, 2020 and December 31, 2019, respectively for commissions and reimbursements. Customer deposits on hand from Customer A totaled approximately $64,780 and $40,120 at September 30, 2020 and December 31, 2019, respectively. The loss of these customers would have a significant impact on the operations and cash flows of the Company.

The Company’s supplier concentrations expose the Company to business risks, which the Company mitigates by attempting to diversify its supply chain. Supplier concentrations consisted of one significant supplier in China (“Supplier A”) that accounted for approximately 86.8% and 80.8% of total net purchases for the three months and nine months ended September 30, 2020 and 0.0% and 81.6% for the three and nine months ended September 30, 2019., respectively. An additional supplier (“Supplier B”), accounted for approximately 100.0% and 11.0% of total net purchases for the three months and nine months ended September 30, 2019, respectively. There were no amounts due these suppliers at both September 30, 2020 and December 31, 2019. The loss of key vendors may have a significant impact on the operations and cash flows of the Company.

The estimated fair value of financial instruments has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is often required to interpret market data used to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.

| 8 |

| --- |

Disclosure of Fair Value

The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below:

·	Cash and cash equivalents are carried at cost, which approximates fair value.
·	The carrying amounts of receivables approximate fair value due to their short-term maturities.
---	---
·	The carrying amounts of payables approximate fair value due to their short-term maturities.
---	---
·	KISS liability-related party is adjusted to fair value based on the value of the Company as a whole using the discounted cash flow method.
---	---

Asset and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability

Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

The levels of the fair value hierarchy into which the Company’s assets and liabilities fall as December 31, 2019 are as follows:

	Level 1		Level 2		Level 3		Total
Liabilities
KISS liability- related party	$	-	$	-	$	1,444,761	$	1,444,761
Total fair value	$	-	$	-	$	1,444,761	$	1,444,761

See Note 5 for discussion of the Company’s valuation of the KISS liability- related party.

| 9 |

| --- |

Inventories

Inventories are stated at the lower of cost or market. Cost is determined based on the first-in, first-out cost flow assumption (“FIFO”) while market is determined based upon the estimated net realizable value less an allowance for selling and distribution expenses and a normal gross profit. The Company evaluates the need for inventory reserves associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis. As of September 30, 2020 and December 31, 2019, the Company believes there are no excess and obsolete inventories and accordingly, did not record an inventory reserve. Inventories consist of purchased finished goods.

Deferred Offering Costs

Costs associated with the Company’s S-1 filings totaled $85,601 and $25,580 as of September 30, 2020 and December 31, 2019, Such costs are included in other assets on the accompanying balance sheets as of September 30, 2020 and December 31, 2019.

Property and Equipment

Property and equipment is recorded at cost and is comprised of a building and office furniture and equipment. The building is depreciated using the straight-line method over the estimated useful life of 40 years. Office furniture and equipment is depreciated using the double-declining method or the straight-line method over the estimated useful lives of 3 to 7 years.

Betterments, renewals, and extraordinary repairs that materially extend the useful life of the asset are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation applicable to assets retired are removed from the accounts, and the gain or loss on disposition, if any, is recognized in the accompanying statements of operations.

Impairment of Long-Lived Assets

In accordance with FASB ASC Topic 360, Property,Plant and Equipment, long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized on long-lived assets when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the carrying amount of the assets. In such cases, the carrying value of these assets are adjusted to their estimated fair values and assets held for sale are adjusted to their estimated fair values less selling expenses.

No impairment losses of long-lived assets were recognized for the nine months ended September 30, 2020 and 2019.

Income Taxes

Deferred tax assets as of September 30, 2020 consist of an amount insignificant to the financial statements as of September 30, 2020, for which a full valuation allowance would have been present.

Sales Taxes

FASB ASC Subtopic 605-45, RevenueRecognition – Principal Agent Considerations, provides that the presentation of taxes assessed by a governmental authority that are directly imposed on revenue-producing transactions (e.g. sales, use, and excise taxes) between a seller and a customer on either a gross basis (included in revenues and costs) or on a net basis (excluded from revenues) is an accounting policy decision that should be disclosed. In addition, for any such taxes that are reported on a gross basis, the amounts of those taxes should be disclosed in the financial statements for each period for which a statement of operations is presented if those amounts are significant. Sales taxes for the three and nine month periods ended September 30, 2020 and 2019 were recorded on a net basis. Included in accrued expenses at September 30,2020 and December 31, 2019 is approximately $70,000 and $62,000 respectively, related to sales taxes.

| 10 |

| --- |

Shipping and Handling Costs

The Company included shipping and handling costs in cost of sales on the accompanying statements of operations for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019.

Warranty

The Company warranties the sale of most of its products and records an accrual for estimated future claims. The standard warranty is typically for a period of three years. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The Company recorded a liability as of, September 30, 2020 and December 31, 2019 of $21,026 and $16,183, respectively, and is included in cost of sales in the statements of operations and within accrued expenses and other current liabilities on the accompanying balance sheets.

Advertising

Advertising costs are expensed as incurred. Total advertising expenses amounted to $0 for both the three months and nine months ended September 30, 2020 and 2019. Total advertising costs are included in selling, general and administrative expenses on the accompanying statements of operations.

Research and Development Costs

Research and development costs are expensed as incurred. Total research and development costs amounted to $0 and $14,529 for the three months ended September 30, 2020 and 2019, respectively. Total research and development costs amounted to $0 and $35,610 for the nine months ended September 30, 2020 and 2019, respectively Total research and development costs are included in selling, general and administrative expenses on the accompanying statements of operations.

| 11 |

| --- |

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. Potentially dilutive securities include convertible notes payable, warrants, stock options and the KISS liability-related party. As all potentially dilutive securities are anti-dilutive as of September 30, 2020 and 2019, diluted net loss per share is the same as basic net loss per share for each period.

COVID-19

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, COVID-19 has had an adverse effect on our business, including our supply chains and distribution systems. While we are taking diligent steps to mitigate disruptions to our supply chain, we are unable to predict the extent or nature of these impacts at this time to our future financial condition and results of operations.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms greater than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations and comprehensive loss. A modified retrospective transition approach is required for capital and operating leases existing at the date of adoption, with certain practical expedients available. The Company is currently in the process of evaluating the potential impact of this new accounting guidance, which is effective for the Company beginning on January 1, 2022. The impact is not expected to be significant.

Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

NOTE 3.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30, 2020			December<br> 31,<br><br> 2019
Building	$	875,000		$	875,000
Furniture and equipment		24,987			24,987
		899,987			899,987
Less: accumulated depreciation and amortization		(145,299	)		(128,893	)
	$	754,688		$	771,094

Depreciation and amortization expense related to property and equipment was $5,468 for both the three months ended September 30, 2020 and 2019, respectively. Depreciation and amortization expense related to property and equipment was $16,406 and $18,988 for the nine months ended September 30, 2020 and 2019, respectively. Depreciation and amortization are included in selling, general and administrative expenses on the accompanying statements of operations.

| 12 |

---
---	---

In May 2018, the Company entered into a note payable with a third- party vendor as payment for an outstanding balance in the amount of $43,692. The note is interest free and requires monthly payments of $5,461 beginning June 15, 2018 with the remaining balance due and payable on December 15, 2018. The Company did not make timely payments as of December 15, 2018 which resulted in interest being accrued on the unpaid balance at a rate of ten percent beginning July 31, 2017. The outstanding balance as of September 30, 2020 and December 31, 2019 is 17,846 and $18,846, respectively.

Interest expense of $8,028 has been accrued in the Company’s balance sheet as of September 30, 2020, of which $444 and $1,382, respectively, has been recorded in the Company’s statement of operations for the three months and nine months then ended. Interest expense of $494 and $2,014, respectively, has been recorded for the three months and nine months ended September 30, 2019.

In October 2019, the Company entered into a future revenue sale agreement. Under the terms of the agreement, the Company agrees to sell $73,336 of its future revenues for a purchase price of $50,500 less transaction fees of $3,115 for a net advance of $47,385. Payments of $375 per day are to be made for principal and interest until the $73,336 is paid in full. The outstanding balance as of September 30, 2020 and December 31, 2019 is $0 and $40,307, respectively.

In April 2020, the Company received $39,500 in payroll protection program loans (“PPP”). These loans provide for certain funding based on previous employment which in part may be forgivable under certain conditions. The remaining portion needs to be repaid over 2 years with a 10-month moratorium on payments and carry a 1% annual interest rate. These loans require no collateral nor personal guarantees. The Company anticipates that this loan will be forgiven in full.

Convertible Promissory Notes

In May 2018, the Company borrowed $25,000 in conjunction with a convertible promissory note. The note matures in June 2020 and accrues interest at a rate of 8% per annum. The lender has the right at any time to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.71 per share. In October 2019, the lender converted the $25,000 note and unpaid accrued interest of $2,948 into 39,363 shares of common stock. There is no beneficial conversion feature as the conversion price is at fair market value. The proceeds were used for operations.

In December 2019, the Company borrowed $50,000 in conjunction with a convertible promissory note. The note matures in May 2020 and is interest free. The lender has the right at any time to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.71 per share. There is no beneficial conversion feature as the conversion price is at fair market value. The proceeds were used for operations.

In June 2020, the Company borrowed $110,000 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $100,000 include an original issue discount of $10,000. A one-time charge of 8% will be applied to the principal amount of $110,000 on the Issuance Date to be paid upon maturity. The note matures on December 15, 2020. The lender has the right at any time to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.35 per share. The number of shares of common stock issuable upon conversion of any conversion amount shall be equal to the quotient of dividing the conversion amount by the conversion price of $0.35.

In conjunction with the note issued in June 2020, the Company issued 100,000 shares of common stock to the Investor as well as a warrant to purchase 250,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrant expires on June 30, 2023.

The common shares and warrants qualified for equity accounting as the warrants did not fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity. The warrants were measured at fair value at the time of issuance and classified as equity.

Each warrant entitles the holder to purchase one share of common stock for $1.00 per share. If held by the initial purchaser of the Private Warrant or certain permitted transferees, the purchase can occur on a cashless basis. The warrants will expire on June 4, 2023 or earlier upon redemption or liquidation.

The Company valued the warrants using the Black-Scholes model and recorded the warrants as a reduction of the note included in the debt discount balance. The following table summarizes the assumptions used in the valuation models to determine the fair value of the warrants:

Fair Value of Common Share	$	0.51
Exercise Price	$	1.00
Risk Free Rate		0.36	%
Expected Life (Yrs.)		3.00
Volatility		95.00	%

| 13 |

| --- |

The Common shares were valued at OTC market price on June 4, 2020. Upon valuation of the common shares and the warrants, the Company allocated the values using a relative fair market value approach. The common shares were valued at $42,969 and the warrants were valued at $48,231. The residual value of $8,800 was recorded as a discount associated with the beneficial conversion feature.

The Company shall at all times reserve and keep available out of its authorized common stock a number of shares equal to at least 5 times the full number of shares of common stock issuable upon conversion of all outstanding amounts under these notes. The Company will at all times reserve at least 5,000,000 shares of common stock for conversion.

The Company shall have the option, under specific terms in each note, to pre-pay the entire remaining outstanding principal amount of this note in cash plus a premium ranging from 20-50%.

Upon the occurrence of any Event of Default (without the need for any party to give any notice or take any other action) for the notes issued in June 2020, the outstanding balance shall immediately and automatically increase to 120% of the outstanding balance immediately prior to the occurrence of the Event of Default (the “Default Sum”). Upon the occurrence of any Event of Default, the note shall become immediately due and payable. In the event of default, the Company would be required to convert the notes at a price of 60% of the lowest trade in the last 25 days prior to default.

In July 2020, the Company borrowed $107,500 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $90,000 include an original issue discount of $7,500 and legal fees of $10,000. The note matures on July 21, 2021. The lender has the right after January 21, 2021 to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.50 per share. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest accrues at the rate of eight percent (8%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest, non-compounding, until paid. A beneficial conversion feature valued at $90,000 has been recorded as a discount on the note.

In August 2020, the Company borrowed $215,000 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $200,000 include an original issue discount of $15,000. The note matures on August 4, 2021. The lender has the right after February 4, 2021 to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.50 per share. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest accrues at the rate of eight percent (8%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest, non-compounding, until paid. A beneficial conversion feature valued at $200,000 has been recorded as a discount on the note.

| 14 |

| --- |

In August 2020, the Company borrowed $103,000 in conjunction with unsecured convertible promissory notes from an investor. Proceeds of $100,000 include an original issue discount of $3,000. The notes mature on August 11, 2021. The lender has the right for 180 days from the issuance date to convert the debt into fully paid and non- assessable shares of common stock at a price of $1.00 per share. From the period 180 days from issuance to maturity, the lender has the right to convert the debt into fully paid and non-assessable shares of common stock at a price of 63% of market value. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest accrues at the rate of ten percent (10%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 22% per year, simple interest, non-compounding, until paid. The note has a variable conversion price and the Company recorded an embedded derivative liability. The fair value of the liability totaled $97,654 at the date of issuance.

In September 2020, the Company borrowed $107,500 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $100,000 include an original issue discount of $7,500. The note matures on September 3, 2021. The lender has the right after March 3, 2021 to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.50 per share. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest accrues at the rate of eight percent (8%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest, non-compounding, until paid. A beneficial conversion feature valued at $100,000 has been recorded as a discount on the note.

In September 2020, the Company borrowed $78,000 in conjunction with unsecured convertible promissory notes from an investor. Proceeds of $75,000 include an original issue discount of $3,000. The notes mature on September 8, 2021. The lender has the right for 180 days from the issuance date to convert the debt into fully paid and non- assessable shares of common stock at a price of $1.00 per share. From the period 180 days from issuance to maturity, the lender has the right to convert the debt into fully paid and non-assessable shares of common stock at a price of 63% of market value. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest accrues at the rate of ten percent (10%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 22% per year, simple interest, non-compounding, until paid. The note has a variable conversion price and the Company recorded an embedded derivative liability. The fair value of the liability totaled $74,238 at the date of issuance.

	As of September 30,
Convertible notes	2020		2019
Principal balance	$	771,000	$	-
Debt discount balance		(684,855)		-
Net Notes balance	$	86,145	$	-
Debt discount is amortized over the term of the note using the effective interest method.

The beneficial conversion features and derivatives are initially recorded as a discount to the debt and amortized using the effective interest method. During the nine months ended September 30, 2020, $33,038 of debt discount amortization is recorded as interest expense.

| 15 |

---
---	---

On July 6, 2018, the Company entered into KISS agreement with a related party for a purchase price of $35,000. The purchase price of the KISS agreement is non-interest bearing, matured twelve months from the issuance date on July 6, 2019 and was recorded as KISS liability- related party in the current liabilities section of the Company’s balance sheet. Upon (a) after the maturity date of July 6, 2019; (b) in the event of a “Next Equity Financing” where the Company sells its preferred shares from which the Company receives not less than $1 million dollars; or, (c) a corporate transaction in which all or substantially all of the Company’s assets are sold, merged or consolidated into another entity, the investor may, at his discretion, convert the principal of the KISS into common shares of Company. The Company’s obligation is to convert the KISS note upon election of the investor.

(k) Under the terms of the agreement, the KISS agreement may be converted into a certain amount of “Conversion Shares” at the earlier of the Company’s “Next Equity Financing” or “Corporate Transaction” as defined in the agreement, or at maturity. The Company has calculated the estimated number of conversion shares to be 8,156,497. KISS conversion shares are equal to the quotient obtained by dividing the Conversion Amount by the Conversion Price as defined in the agreement. The conversion price is the quotient resulting from dividing (A) the Valuation Cap by (B) the Fully-Diluted Capitalization immediately prior to the conversion. “Valuation Cap” shall mean (i) US $82,497 for shares converted prior to July 1, 2020 (the “2020 Valuation Cap”)”); (ii) US $106,376 for shares converted prior to July 1, 2022 (the “2022 Valuation Cap”) and (iii) US $142,458 for shares converted on or after July 1, 2022.

In October 2019, the related party converted 1,000,000 of the conversion shares at a value of $197,942, which was reclassed to additional paid-in-capital. On September 23, 2020, the related party converted the remaining shares of 7,156,497 at a value of $1,452,575, which was reclassed to additional paid-in-capital.

The fair market value of the KISS liability- related party at December 31, 2019 is $1,444,762. Changes in fair market value are recorded as other income in the Company’s statements of operations. The change in fair market value for the three months ended September 30, 2020 and 2019, totaled $0 and $1,553 respectively. The change in fair market value for the nine months ended September 30, 2020 and 2019 totaled $7,784 and $41,257, respectively.

The Company determined the fair value of the KISS liability using the estimated enterprise value of the Company, allocating the percentage of fully diluted pro-rata shares to the value of the KISS liability. The Company will mark to market the liability at each reporting period.

NOTE 6.	LONG-TERM DEBT

Note Payable

In March 2015, the Company entered into an $850,000 note payable (the “Original Note Payable”) with a third-party to finance the purchase of its office building. The Original Note Payable consisted of interest-only payments at 4.5% per annum, payable monthly in arrears. The Original Note Payable was collateralized by a deed of trust in the office building. During 2015, the Company refinanced the Original Note Payable with bank debt and a new note payable (“Note Payable”) for the unpaid principal balance.

The Note Payable, effective December 31, 2015 was issued for a principal amount of $157,000 and personally guaranteed by the Company’s CEO. Interest began accruing on the interest commencement date of January 1, 2018, at 2% per annum, compounded monthly. The unpaid principal balance and accrued interest is due within ten days of the maturity date on December 31, 2020. The outstanding balance on the Note Payable at December 31, 2018 was $157,000. In August 2019, the Company’s CEO personally repaid $100,000 of the note payable to the third-party and was recorded as a reduction of the CEO’s amount due the Company. In October 2019, the lender converted the remaining balance of $57,000 and unpaid accrued interest of $5,373 into 87,849 shares of common stock.

| 16 |

| --- |

Government Debt

In June 2020, the Company received a $150,000 economic injury disaster loan (“EIDL”). The loan accrues interest at a rate of 3.75% annually and is collateralized by all personal property and intangible assets of the Company. The loan has a 12-month moratorium on payments, after which monthly principal and interest payments of $731 will be made through the maturity date of June 2050.

Bank Debt

In September 2015, the Company entered into a credit agreement for a $700,000 term loan with a financial institution. Payment terms consist of monthly payments in arrears of $3,547 for the first year outstanding. The monthly payment then increases to $4,574 until the term loan matures on September 30, 2025, in which the remaining unpaid principal balance and accrued interest is due. The interest rate for the first year was 1.99% per annum and increased to 4.95% per annum for the remaining life of the term loan. The term loan is collateralized by a deed of trust in the office building. The proceeds were used to purchase a building for which the Company’s operations are located. The net principal balance outstanding on the term loan at September 30, 2020 and December 31, 2019 was $581,145 and $592,001, respectively. The term loan is personally guaranteed by the Company’s CEO.

In March 2020, the Company entered into an agreement with the financial institution to defer its monthly payments for three months through May 2020. Such payments and additional accrued interest have been deferred to the maturity date of the loan.

Related Party Notes Payable

In October 2013, the Company entered in to a $45,000 note payable with an individual related to the Company’s CEO. The proceeds were used for operations. Interest began accruing on the interest commencement date of January 1, 2018, at 2% per annum, compounded monthly. The unpaid principal balance and accrued interest is due within ten days of the maturity date on December 31, 2020. In October 2019, the related party lender converted the principal amount of $44,000 and unpaid accrued interest of $1,592 into 64,215 shares of common stock.

In July 2017, the Company entered a $250,000 promissory note with its CEO. The proceeds were used for operations and Regulation A+ offering costs. The promissory note began accruing interest on the interest commencement date of October 1, 2018 at 2% per annum, compounded monthly. The unpaid principal balance and accrued interest are due within ten days of the maturity date on September 30, 2020. The note payable and accrued interest are deemed paid in full as of December 31, 2019.

The Company entered into additional promissory notes with a related party for $84,500 and repaid $45,000 of promissory notes in the nine months ended September 30, 2020, for a total of $357,500 outstanding. All notes mature at various times in 2020 and 2021. Interest will accrue at 10% per annum from the due date thereon until all principal is paid in full. Proceeds from the loans were used for operations.

The long-term debt agreements do not contain any financial covenants.

| 17 |

---
---	---

The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and shares to be issued were recorded as derivative liabilities on the issuance date.

Based on the various convertible notes described in Note 4. The fair value of applicable derivative liabilities on notes and the change in fair value of derivative liability are as follows for the nine months ended September 30, 2020:

	Derivative<br><br> Liability -<br><br> Convertible<br><br> Notes
Balance as of December 31, 2019	$	–
Additions during the period		171,892
Change in fair value		22,415
Balance as of September 30, 2020	$	194,307

The fair value of the derivative liabilities – convertible notes are estimated using a Black Scholes pricing model with the following assumptions:

Market value of common stock	0.99-2.03
Expected volatility	95
Expected term (in years)	1
Risk-free interest rate	0.36

All values are in US Dollars.

| 18 |

---
---	---

The Company has a promissory note with a related party for $44,000 that was converted into shares of common stock in 2019.

In October 2019, the Company entered into an employment agreement with the Company’s CEO. The terms of the agreement include an annual base salary of $240,000 and a signing bonus of $500,000, as well as discretionary annual bonuses and participation in long-term incentive plans. The signing bonus may be paid in shares of the Company’s common stock. The agreement remains in effect until the earlier of the discharge or resignation of the CEO. In conjunction with the agreement, the $500,000 signing bonus has been accrued and included in selling, general and administrative expenses in the accompanying statement of operations during the year ended December 31, 2019.

During the nine months ended September 30, 2020, the Company paid the Company’s CEO $27,256 towards the balance of the 2019 signing bonus. Total amount outstanding at September 30, 2020 and December 31, 2019 is $46,204 and $73,460, respectively.

See Notes 5, 6 and 12 for additional related party disclosure.

| 19 |

---
---	---

In January 2020, the Company issued 10,355 shares of common stock to a vendor as settlement for a liability totaling $7,532.

In February 2020, the Company issued 200,000 shares of common stock in conjunction with a twelve-month agreement for consulting services at a value of $102,000 or $0.51 per share. The value of the consulting services has been recorded as selling, general and administrative expenses in the Company’s statement of operations. The fair market value of the shares was determined based the on the Company’s closing price on the date of issuance.

In February 2020, the Company entered into a six- month consulting agreement with a third party. In conjunction with the agreement, the Company issued the third party 400,000 shares of common stock at a value of $188,000 or $0.47 per share, with the option to issue an additional 900,000 shares at the Company’s discretion. The value of the consulting services has been recorded as selling, general and administrative expenses in the Company’s statement of operations. The fair market value of the shares was determined based the on the Company’s closing price on the date of issuance. In August 2020, the Company issued the 900,000 shares of common stock in conjunction with the consulting agreement at a value of $1,818,000 or $2.02 per share. The value of the compensation has been recorded in selling, general and administrative expenses in the Company’s statement of operations.

In April 2020, the Company issued 2,000,000 shares of common stock to one of its employees as compensation for services provided at a value of $600,000 or $.30 per share. The value of the compensation has been recorded as selling, general and administrative expenses in the Company’s statement of operations.

On May 1, 2020, the Company issued a warrant to a third party to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.52 per share. The warrant is fully vested upon issuance and expires May 1, 2025. Compensation expense of $37,149 has been recorded in selling, general and administrative expenses in the accompanying statement of operations for the nine months ended September 30, 2020. The Company utilizes the Black Scholes valuation model which relies on certain assumptions to estimate the warrant’s fair value. The assumptions used in the determination of the fair value of the warrant awarded are provided in the table below.

Assumptions
Expected volatility rate	95	%
Expected dividend yield	0	%
Average risk-free interest rate	.36	%
Expected term years	5.0

In June 2020, the Company received a total of $50,000 from an investor in exchange for 142,857 shares of common stock of the Company at a price of $0.35 per share.

In June 2020, the Company issued 100,000 shares of common stock and a warrant to purchase 250,000 shares of common stock in conjunction with a convertible promissory note (see Note 4).

| 20 |

---
---	---

The Company recorded stock compensation expense of $5,953 and $48,429 during the three months ended September 30, 2020 and 2019, respectively and $16,899 and $110,198 during the nine months ended September 30, 2020 and 2019, respectively. Stock-based compensation is included in selling, general, and administrative expense in the accompanying statements of operations. Stock-based compensation expense is based on awards ultimately expected to vest. Total unrecognized stock-based compensation cost related to unvested time-based stock options was $9,425 as of September 30, 2020 and is expected to be recognized over a weighted-average period of 12 months.

		Weighted<br> Average<br> Exercise<br> Price
Options outstanding at December 31, 2019	445,000		-
Granted	-	$	-
Exercised	-		-
Forfeited		$	-
Expired	-		-
Options outstanding at September 30, 2020	445,000	$	0.71	2.5
Exercisable at September 30, 2020	360,000	$	0.71	2.5
Options exercisable and expected to vest at September 30, 2020	445,000	$	0.71	2.5

| 21 |

---
---	---

Contingencies

The Company is subject to various loss contingencies and assessments arising in the normal course of the business, some of which relate to litigation, claims, property taxes and sales and use tax or goods and services tax assessments. The Company considers the likelihood of the loss or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies and assessments. An estimated loss contingency or assessment is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Management regularly evaluates current information available to them to determine whether such accruals should be adjusted. Based on the information presently available, including discussion with counsel and other consultants, management believes that resolution of these matters will not have a material adverse effect on its business, results of operations, financial condition or cash flows.

NOTE 12.	SUBSEQUENT EVENTS

The Company has evaluated subsequent events that have occurred through the filing date, which is the date that the financial statements were available to be issued and determined that there were no subsequent events or transactions that required recognition or disclosure in the financial statements, except as disclosed below.

| 22 |

| --- |

Pursuant to a previous financing commitment entered into September 28, 2020, received on October 1, 2020, the Company borrowed $108,000 in conjunction with unsecured convertible promissory notes from an investor. Proceeds of $100,000 include an original issue discount of $8,000. The notes mature on September 28, 2021. The lender has the right for 180 days from the issuance date to convert the debt into fully paid and non- assessable shares of common stock at a price of 63% of market value. From the period 180 days from issuance to maturity, the lender has the right to convert the debt into fully paid and non-assessable shares of common stock at a price of $1.00 per share. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest accrues at the rate of ten percent (10%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 22% per year, simple interest, non-compounding, until paid.

Pursuant to a financing commitment, on October 22, 2020, the Company entered into a Note Purchase Agreement (the “Agreement”) with a third party for the sale of a convertible promissory note in the principal amount of $128,000 at a purchase price of $128,000. The note matures on October 22, 2021. The lender has the right to convert the debt into fully paid and non- assessable shares of common stock at a price equal to 65% of the outstanding share price. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest will accrue at the rate of ten percent (10%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 22% per year, simple interest, non-compounding, until paid.

Pursuant to a financing commitment, on November 3, 2020, the Company entered into a Note Purchase Agreement (the “Agreement”) with a third party for the sale of a convertible promissory note in the principal amount of $244,853 at a purchase price of $225,000. Proceeds of $225,000 include an original issue discount of $19,853. The note matures on November 3, 2021. The lender has the right to convert the debt into fully paid and non- assessable shares of common stock at a price of $0.50 per share. Conversions are subject to adjustments due to stock dividends, stock splits, rights offerings or combinations, recapitalizations and reorganizations. Interest will accrue at the rate of eight percent (8%) per annum, simple interest, in each case to the extent that the note and the principal amount and any unpaid accrued interest has not been converted into conversion shares (as defined) prior to the maturity date. Interest shall commence accruing on the issuance date and be computed on the basis of a 365-day year. In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest, non-compounding, until paid.

In October 2020, the Company received a total of $35,000 from investors in exchange for 70,000 shares of common stock of the Company at a price of $0.50 per share.

On November 6, 2020, the Company issued 65,000 shares of common stock, at a price of $0.91 per share, in conjunction with a consulting agreement.

On November 9, 2020, the Company purchased and returned to treasury stock 87,849 shares of common stock for a purchase price of $36,413.

| 23 |

| --- |

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS.

COVID-19may impact our business.

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical areas in which we operate. While it is unknown how long these conditions will last and what the complete financial effect will be to the Company, COVID-19 may have an adverse effect on our business. While we are taking diligent steps to mitigate any possible disruptions to our business, we are unable to predict the extent or nature of these impacts, at this time, to our future financial condition and results of operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following discussion and analysis should be read in conjunction with the unaudited condensed financial information and the notes thereto included herein, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto contained in our Registration Statement on Form S-1/A-4 for the Year ended December 31, 2019, as filed on July 20, 2020. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the caption “Cautionary Note Regarding Forward-Looking Statements” in this report, as well as under "Part I – Item 1A - Risk Factors" in our Form S-1/A-4 registration statement filed on July 20, 2020, and elsewhere in this Quarterly Report on Form 10-Q. These statements, like all statements in this report, speak only as of the date of this Quarterly Report on Form 10-Q (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments.

Overview and Financial Condition

Going Concern

The Company sustained continued operating losses during the years ended December 31, 2019 and 2018 and during the nine months ended September 30, 2020. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, in which it has not been successful, and/or obtaining additional financing from its shareholders or other sources, as may be required.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classifications of liabilities that may result, should the Company be unable to continue as a going concern.

Management is endeavoring to commence revenue-generating operations. While priority is on generating cash from operations through the sale of the Company’s products, management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity and/or debt securities, which may not be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and our operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us and/or our shareholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing shareholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the current holders of our shares of Common Stock.

| 24 |

| --- |

Results of Operations

The following table sets forth the results of our unaudited operational results for the three months ended September 30,

	2020			2019
Net Sales	$	205,850		$	270,128
Cost of goods sold:		57,383			75,202
Gross profit		148,467			194,926
Operating Expenses		2,243,377			373,402
Loss from operations		(2,094,910	)		(178,476	)
Other expense		(75,073	)		(12,154	)
Net Loss	$	(2,169,983	)	$	(190,630	)

The following table sets forth the results of our unaudited operational results for the nine months ended September 30,

	2020			2019
Net Sales	$	557,476		$	625,020
Cost of Goods Sold		139,892			181,409
Gross profit		417,584			443,611
Operating Expenses		3,768,196			1,598,029
Loss from operations		(3,350,612	)		(1,154,418	)
Other expense		(110,867	)		(76,599	)
Net Loss	$	(3,461,479	)	$	(1,231,017	)

| 25 |

| --- |

Operating Results

July 1, 2020 through September 30,2020 Compared to July 1, 2019 through September 30, 2019

Our sales totaled $205,850 for the three months ended September 30, 2020 and $270,128 for the three months ended September 30, 2019. The decrease of $64,278 or 24% is primarily related to a decrease in units sold, partially offset by an increase in average selling price. The Company’s inability to secure additional inventory contributed to the decline.

Cost of sales and gross margins for the three months ended September 30, 2020 and for the three months ended September 30, 2019 were $57,383 and 72% and $75,202 and 72%, respectively. Our cost of sales consists of the cost of materials and distribution expenses. Cost of sales and gross margins are affected by product mix as well as the mix in the level of sales between commissioned agents and distributors.

Interest expense totaled $52,658 for the three months ended September 30, 2020 as compared to $10,601 for the three months ended September 30, 2019. The increase in interest expense relates primarily to interest incurred in conjunction with the convertible notes entered into during 2020. The Company also recorded $22,415 as an adjustment to the fair value of the derivative liabilities related to convertible promissory notes in 2020.

As a result of the foregoing, we recorded a net loss of $2,169,983 for the three months ended September 30, 2020, compared to a net loss of $190,630 for the three months ended September 30, 2019. The increase in net loss is primarily attributed to the increase in selling, general and administrative expenses, decreased gross profit and increase in interest expense.

January 1, 2020 through September 30,2020 Compared to January 1, 2019 through September 30, 2019

Our sales totaled $557,476 for the nine months ended September 30, 2020 and $625,020 for the nine months ended September 30, 2019. The decrease is primarily related to a decrease in units sold.

Cost of sales and gross margins for the nine months ended September 30, 2020 and for the nine months ended September 30, 2019 were $139,892 and 75% and $181,409 and 71%, respectively. Our cost of sales consists of the cost of materials and distribution expenses. The increase in gross margin is primarily attributed to an increase in average selling price including pricing to certain distributors and the release and sale of previously written off inventory. Cost of sales and gross margins are affected by product mix as well as the mix in the level of sales between commissioned agents and distributors.

Selling, general and administrative expenses consist primarily of payroll, commissions, professional fees, sales and marketing, research and development and other operating expenses. Selling, general and administrative expenses totaled $3,768,196 for the nine months ended September 30, 2020 and $1,598,029 for the nine months ended September 30, 2019, an increase of $2,170,167 or about 136%. The change is primarily due to increases in stock-based compensation expense of $2,021,925, payroll related expenses of $44,791 and consulting and professional fees of $170,726, partially offset by put-option financing costs of $75,387 and commissions of $38,140. Stock-based compensation expense in the nine months ended September 30, 2020 includes $600,000 related to shares issued to an employee for services rendered and $2,154,192,000 related to third party consulting agreements. Stock-based compensation expense in the nine months ended September 30, 2019 includes $492,563 related to the sale by the Company’s CEO of 693,750 shares of common stock to certain employees at par value and $239,438 related to third party consulting agreements. The increase in payroll related expenses in the nine months ended September 30, 2020 is primarily related to the Company CEO’s employment agreement entered into in October 2019, partially offset by a decrease in medical insurance premiums and expenses related to a 2019 termination. The increase in consulting and professional fees relates primarily to costs associated with operating as a public company. The decrease in commissions is related to a decrease in sales as well as a promotion in the 2019 period that did not occur in 2020.

As a result of the foregoing, we recorded a net loss of $3,461,479 for the nine months ended September 30, 2020, compared to a net loss of $1,231,017 for the nine months ended September 30, 2019. The increase in net loss is primarily attributed to the increase in selling, general and administrative expenses, decreased gross profit and interest expense, partially offset by the change in fair value of the Kiss Liability-related party.

Liquidity and Capital Resources

During the nine months ended September 30, 2020, our cash and cash equivalents increased by $85,477 reflecting net proceeds from financing activities of $881,221, partially offset by cash used in operations of $795,644. At September 30, 2020, the Company had a working capital deficit of $997,472 and cash on hand of $85,477.

| 26 |

| --- |

Operating Activities

The increase in cash flows used in operating activities is primarily the result of increased costs related to public Company operations, including costs associated with the Company’s S-1 filing, the decrease in gross profit and increased interest expense.

Financing Activities

Cash flows provided from financing activities totaled $881,121 for the nine months ended September 30, 2020 as compared to $187,547 for the nine months ended September 30, 2019. The cash flows provided in the 2020 period are primarily the result of the following cash inflows :

$665,000 in net proceeds from convertible promissory notes

$155,900 in net proceeds from government debt

$39,500 in net proceeds from PPP loan

$24,500 in net proceeds from related party loans

$50,000 for the issuance of common stock

These cash inflows were partially offset by debt repayments totaling $53,779

The details of the convertible promissory notes are as follows:

In June 2020, the Company borrowed $110,000 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $100,000 include an original issue discount of $10,000.

In August 2020, the Company borrowed $215,000 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $200,000 include an original issue discount of $15,000.

| 27 |

| --- |

In August 2020, the Company borrowed $103,000 in conjunction with unsecured convertible promissory notes from an investor. Proceeds of $100,000 include an original issue discount of $3,000.

In September 2020, the Company borrowed $107,500 in conjunction with an unsecured convertible promissory note from an investor. Proceeds of $100,000 include an original issue discount of $7,500.

In September 2020, the Company borrowed $78,000 in conjunction with unsecured convertible promissory notes from an investor. Proceeds of $75,000 include an original issue discount of $3,000.

From October 1, 2020 through November 10, 2020, the Company entered into convertible notes totaling $480,853 with net proceeds of $453,000.

In October 2020, the Company received a total of $35,000 from investors in exchange for 70,000 shares of common stock of the Company at a price of $0.50 per share.

On November 6, 2020, the Company issued 65,000 shares of common stock, at a price of $0.91 per share, in conjunction with a consulting agreement.

On November 9, 2020, the Company purchased and returned to treasury stock 87,849 shares of common stock for a purchase price of $36,413.

| 28 |

---
---	---

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4.	CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely and reliable financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America.

As of the quarter ended September 30, 2020, our principal executive officer and principal financial officer completed an assessment of the effectiveness of our disclosure controls and procedures, to determine the existence of any material weaknesses or significant deficiencies. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant’s financial reporting.

Based on this evaluation, the Company’s management concluded its internal controls over financial reporting were not effective as of September 30, 2020. The ineffectiveness of the Company’s internal control over financial reporting was due to the following identified material weaknesses and significant deficiencies:

| 29 |

| --- |

Material Weakness

(1) We lack organizational controls designed to allow us to gather, organize, process, maintain and provide our auditor timely documentation concerning our financial records. This material weakness causes us to not be able to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP, and effectively close our books in a timely fashion and report to the Commission consistent with its rules and forms.

Significant Deficiency

(a) We do not have an Audit Committee – While not being legally obligated to have an Audit Committee, it is management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

(b) We do not have procedures in place to update our disclosures to include relevant accounting standards updates.

Changes in Internal Control over Financial Reporting.

Our management will continue to monitor and evaluate the designation, implementation and effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary.

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS

There are presently no material pending legal proceedings to which the Company, any executive officer, or any owner of record or beneficially of more than five percent of any class of voting securities is a party, or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

ITEM 1A.	RISK FACTORS

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On November 6, 2020 we issued 65,000 restricted common shares in exchange for consulting services. The sale was made in reliance on the exemption from registration provided by Section 4.2 of the Securities Act. The beneficial owner was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its respective qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to the beneficial owner full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. The beneficial owner acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof.

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES
None.
---
ITEM 4.	MINE SAFETY DISCLOSURES
---	---

Not applicable

| 30 |

---
---	---
None.
---
ITEM 6.	EXHIBITS
---	---

The following exhibits are included as part of this report:

*Included Herewith

**Incorporated by Reference from Registrant’s Form S-1/A filed July 20, 2020.

EXHIBIT NUMBER	EXHIBIT NAME
3.1(a)**	Certificate<br> of Incorporation
3.1(b)**	Amendment<br> to Articles of Incorporation January 9, 2020.
3.1(c)**	Amendment<br> to Articles of Incorporation – Increase of Authorized Common Stock.
3.1(d)**	Amendment<br> to Articles of Incorporation – Designation of Series A Preferred Common Stock.
3.1(e)**	Amendment<br> to Articles – Conversion to C Corporation from LLC.
3.(ii)**	Corporate<br> By-Laws
4**	Amendment<br> to Articles of Incorporation – Designation of Series A Preferred Common Stock.
10(i)**	Material<br> Contract – Matthew Wolfson Employment Contract.
10(ii)**	KISS<br> Agreement, Blue Ridge Enterprises, LLC, July 9, 2019.
10(iii)	Convertible<br> Promissory Note, JRD Enterprises III, LLC, July 21, 2020; Incorporated by reference from Form 10-Q for the quarter ended<br> June 30, 2020, filed August 14, 2020.
10(iv)	Convertible<br> Promissory Note, JRD Enterprises III, LLC, August 4, 2020; Incorporated by reference from Form 10-Q for the quarter ended<br> June 30, 2020, filed August 14, 2020.
10(v)*	Convertible Promissory Note, JSJ Investments, Inc., September<br> 28, 2020, as completed October 1, 2020.
10(vi)*	Convertible<br> Promissory Note, Redstart Holdings Corp., October 22, 2020.
10(vii)*	Convertible<br> Promissory Note, JR-HD Enterprises, III, LLC, November 3, 2020
10(viii)*	Settlement<br> Agreement, Iakovos Tsakalidis, November 6, 2020
31.1*	Certification<br> of Principal Executive Officer and Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications of Chief Executive Officer and Chief Financial<br> Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

| 31 |

---
---

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, thereunto duly authorized.

Dated: November 16, 2020

ELECTROMEDICAL TECHNOLOGIES INC.
By:	/s/ Matthew Wolfson
	Matthew Wolfson
	President & Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Matthew Wolfson
	Matthew Wolfson
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

| 32 |

| --- |

Exhibit 10(v)

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA

NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE COMPANY UPON CONVERSION HEREOF (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

10% CONVERTIBLE PROMISSORY NOTE

MATURITY DATE OF SEPTEMBER 28, 2021 *THE “MATURITY DATE”

$108,000 SEPTEMBER 28, 2020 *THE “ISSUANCE DATE”

FOR VALUE RECEIVED, Electromedical Technologies, Inc., a Delaware Corporation (the “Company”) doing business in Scottsdale, Arizona,, hereby promises to pay to the order of JSJ Investments Inc., an accredited investor and Texas Corporation, or its assigns (the “Holder”), the principal amount of One Hundred and Eight Thousands Dollars ($108,000) (“Note”), on demand of the Holder at any time on or after September 28, 2021 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of Ten Percent (10%) per annum (the “Interest Rate”) commencing on the date hereof (the “Issuance Date”).

The Principal Amount is One Hundred and Eight Thousand Dollars ($108,000) and the consideration paid by the Holder is One Hundred and Three Thousand Dollars ($103,000) (the “Consideration”); there exists an original issue discount of $5,000 (the “OID”)).

1.	Payments of Principal and Interest.
a.	Pre-Payment and Payment of Principal and Interest. The Company may pay this Note in full, together with any and all accrued and unpaid interest, plus any applicable pre-payment premium set forth herein and subject to the terms of this Section 1.a, at any time on or prior to the date which occurs 180 days after the Issuance Date hereof (the “Prepayment Date”). In the event the Note is not prepaid in full on or before the Prepayment Date, it shall be deemed a “Pre-Payment Default” hereunder. Until the Ninetieth (90th) day after the Issuance Date the Company may pay the principal at a cash redemption premium of 125%, in addition to outstanding interest, without the Holder’s consent; from the 91st day to the One Hundred and Twentieth (120th) day after the Issuance Date, the Company may pay the principal at a cash redemption premium of 130%, in addition to outstanding interest, without the Holder’s consent; from the 121st day to the Prepayment Date, the Company may pay the principal at a cash redemption premium of 140%, in addition to outstanding interest, without the Holder’s consent. After the Prepayment Date up to the Maturity Date this Note shall have a cash redemption premium of 150% of the then outstanding principal amount of the Note, plus accrued interest and Default Interest, if any, which may only be paid by the Company upon Holder’s prior written consent. At any time on or after the Maturity Date, the Company may repay the then outstanding principal plus accrued interest and Default Interest (defined below), if any, to the Holder.
---	---
b.	Demand of Repayment. The principal and interest balance of this Note shall be paid to the Holder<br>hereof on demand by the Holder at any time on or after the Maturity Date. The Default Amount (defined herein), if applicable, shall<br>be paid to Holder hereof on demand by the Holder at any time such Default Amount becomes due and payable to Holder. The Holder<br>may, by written notice to the Company at least five (5) days before the Maturity Date (as may have been previously extended), extend<br>the Maturity Date to up to one (1) year following the date of the original Maturity Date hereunder.
---	---
c.	Interest. This Note shall bear interest (“Interest”) at the rate of Ten Percent (10%)<br>per annum from the Issuance Date until the same is paid, or otherwise converted in accordance with Section 2 below, in full and<br>the Holder, at the Holder’s sole discretion, may include any accrued but unpaid Interest in the Conversion Amount. Interest<br>shall commence accruing on the Issuance Date, shall be computed on the basis of a 365day year and the actual number of days elapsed<br>and shall accrue daily and, after the Maturity Date, compound quarterly. Upon an Event of Default, as defined in Section 10 below,<br>the Interest Rate shall increase to Eighteen Percent (18%) per annum for so long as the Event of Default is continuing (“Default<br>Interest”).
---	---
d.	General Payment Provisions. This Note shall be paid in lawful money of the United States of America<br>by check or wire transfer to such account as the Holder may from time to time designate by written notice to the Company in accordance<br>with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is<br>not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a Business Day and, in<br>the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof<br>shall not be taken into account<br>for purposes of determining the amount of interest due on such date. For purposes of this Note, “Business Day” shall<br>mean any day other than a Saturday, Sunday or a day on which commercial banks in the State of Texas are authorized or required<br>by law or executive order to remain closed.
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
2.	Conversion of Note. At any time after the Pre-payment Date, the Conversion Amount (see Paragraph<br>2(a)(i)) of this Note shall be convertible into shares of the Company’s common stock (the “Common Stock”) according<br>to the terms and conditions set forth in this Paragraph 2.
---	---
a.	Certain Defined Terms. For purposes of this Note, the<br>following terms shall have the following meanings:
---	---
i.	“Conversion Amount” means the sum of (a) the principal amount of this Note to be converted<br>with respect to which this determination is being made, (b) Interest; and (c) Default Interest, if any, if so included at the Holder’s<br>sole discretion.
---	---
ii.	“Conversion Price” means a 37% discount to the lowest trading price during the previous<br>twenty (20) trading days to the date of a Conversion Notice; (subject to equitable adjustments for stock splits, stock dividends<br>or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company,<br>combinations, recapitalization, reclassifications, extraordinary distributions and similar events).
---	---
iii.	“Person” means an individual, a limited liability company, a partnership, a joint venture,<br>a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.
---	---
iv.	“Shares” means the Shares of the Common Stock of the Company into which any balance<br>on this Note may be converted upon submission of a “Conversion Notice” to the Company substantially in the form attached<br>hereto as Exhibit 1.
---	---
b.	Holder’s Conversion Rights. At any time after the Pre-payment Date, the Holder shall be entitled<br>to convert all of the outstanding and unpaid principal and accrued interest of this Note into fully paid and non-assessable shares<br>of Common Stock in accordance with the stated Conversion Price. The Holder shall not be entitled to convert on a Conversion Date<br>that amount of the Note in connection with that number of shares of Common Stock which would be in excess of the sum of the number<br>of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is<br>being made on a Conversion Date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99%<br>of the outstanding shares of Common Stock of the Company on such Conversion Date. For the purposes of the provision to the immediately<br>preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of<br>1934, as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to aggregate conversions<br>of 4.99% (“Conversion Limitation 1”). The Holder shall have the authority to determine whether the restriction contained<br>in this Section 2(b) will limit any conversion hereunder, and accordingly, the Holder may waive the conversion limitation<br>described in this Section 2(b), in whole or in part, upon and effective after 61 days prior written notice to the Company<br>to increase or decrease such percentage to any other amount as determined by Holder in its sole discretion (“Conversion Limitation<br>2”). If in the case that the Company’s Common Stock is “chilled” for deposit into the DTC system and only<br>eligible for clearing deposit, then an additional 15% discount to the Conversion Price shall apply for all future conversions under<br>the Note while the “chill” is in effect. For the avoidance of doubt, with reference to section 2(a)ii of this note,<br>when the “chill” is in effect the conversion price will increase from a 35% discount to a 50% discount to the lowest<br>trading price during the previous (20) days to the date of a Conversion Notice. To the extent the Conversion Price of the Company’s<br>Common Stock closes below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders<br>to reduce the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this<br>adjustment unless the Holder, in its sole and absolute discretion elects instead to set the Conversion Price to par value for such<br>conversion(s) and the conversion amount for such conversion(s) shall be increased to include Additional Principal, where “Additional<br>Principal” means such additional amount to be added to the conversion amount to the extent necessary to cause the number<br>of Common Stock issuable upon such conversion(s) to equal the same number of Common Stock as would have been issued had the Conversion<br>Price not been set to par value in the Holder’s sole and absolute discretion.
---	---
c.	Fractional Shares. The Company shall not issue any fraction of a share of Common Stock upon any<br>conversion; if such issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such<br>fraction of a share of Common Stock up to the nearest whole share except in the event that rounding up would violate the conversion<br>limitation set forth in section 2(b) above.
---	---
d.	Conversion Amount. The Conversion Amount shall be converted pursuant to Rule 144(b)(1)(ii) and<br>Rule 144(d)(1)(ii) as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, into<br>unrestricted shares at the Conversion Price.
---	---
e.	Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:
---	---
i.	Holder’s Conversion Requirements. To convert this Note into shares of Common Stock on any<br>date set forth in the Conversion Notice by the Holder (the “Conversion Date”), the Holder shall transmit by email,<br>facsimile or otherwise deliver, for receipt on or prior to 11:59 p.m., Eastern Time, on such date or on the next business day,<br>a copy of a fully executed notice of conversion in the form attached hereto as Exhibit 1 to the Company.
---	---
ii.	Company’s Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company<br>shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice, send, via<br>email, facsimile or overnight courier, a confirmation of receipt of such Conversion Notice to such Holder indicating that the Company<br>will process such Conversion Notice in accordance with the terms herein. Within two (2) Business Days after the date the Conversion<br>Notice is delivered, the Company shall have issued and electronically transferred the shares to the Broker indicated in the Conversion<br>Notice; should the Company be unable to transfer the shares electronically, it shall, within two (2) Business Days after the date<br>the Conversion Notice was delivered, have surrendered to an overnight courier for delivery the next day to the address as specified<br>in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of shares of Common Stock to which<br>the Holder shall be entitled.
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
iii.	Record Holder. The person or persons entitled to receive the shares of Common Stock issuable upon<br>a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the<br>Conversion Date.
---	---
iv.	Timely Response by Company. Upon receipt by Company of a Conversion Notice, Company shall respond<br>within one business day to Holder confirming the details of the Conversion, and provide within two business days the Shares requested<br>in the Conversion Notice.
---	---
v.	Liquidated Damages for Delinquent Response. If the Company fails to deliver for whatever reason<br>(including any neglect or failure by, e.g., the Company, its counsel or the transfer agent) to Holder the Shares as requested<br>in a Conversion Notice within three (3) business days of the Conversion Date, the Company shall be deemed in “Default of<br>Conversion.” Beginning on the fourth (4^th^) business day after the date of the Conversion Notice, after the Company<br>is deemed in Default of Conversion, there shall accrue liquidated damages (the “Conversion Damages”) of $2,000 per<br>day for each day after the third business day until delivery of the Shares is made, and such penalty will be added to the Note<br>being converted (under the Company’s and Holder’s expectation and understanding that any penalty amounts will tack<br>back to the Issuance Date of the Note). The Parties agree that, at the time of drafting of this Note, the Holder’s damages<br>as to the delinquent response are incapable or difficult to estimate and that the liquidated damages called for is a reasonable<br>forecast of just compensation.
---	---
vi.	Liquidated Damages for Inability to Issue Shares. If the Company fails to deliver Shares requested<br>by a Conversion Notice due to an exhaustion of authorized and issuable common stock such that the Company must increase the number<br>of shares of authorized Common Stock before the Shares requested may be issued to the Holder, the discount set forth in the Conversion<br>Price will be increased by 5 percentage points (i.e. from 37% to 42%) for the Conversion Notice in question and all future Conversion<br>Notices until the outstanding principal and interest of the Note is converted or paid in full. These liquidated damages shall not<br>render the penalties prescribed by Paragraph 2(e)(v) void, and shall be applied in conjunction with Paragraph 2(e)(v) unless otherwise<br>agreed to in writing by the Holder. The Parties agree that, at the time of drafting of this Note, the Holder’s damages as<br>to the inability to issue shares are incapable or difficult to estimate and that the liquidated damages called for is a reasonable<br>forecast of just compensation.
---	---
vii.	Rescindment of Conversion Notice. If: (i) the Company fails to respond to Holder within one business<br>day from the date of delivery of a Conversion Notice confirming the details of the Conversion, (ii) the Company fails to provide<br>the Shares requested in the Conversion Notice within three business days from the date of the delivery of the Conversion Notice,<br>(iii) the Holder is unable to procure a legal opinion required to have the Shares issued unrestricted and/or deposited to sell<br>for any reason related to the Company's standing with the SEC or FINRA, or any action or inaction by the Company, (iv) the Holder<br>is unable to deposit the Shares requested in the Conversion Notice for any reason related to the Company's standing with the SEC<br>or FINRA, or any action or inaction by the Company, (v) if the Holder is informed that the Company does not have the authorized<br>and issuable Shares available to satisfy the Conversion, or (vi) if OTC Markets changes the Company's designation to 'Limited Information'<br>(Yield), 'No Information' (Stop Sign), 'Caveat Emptor' (Skull and Crossbones), or 'OTC', 'Other OTC' or 'Grey Market' (Exclamation<br>Mark Sign) on the day of or any day after the date of the Conversion Notice, the Holder maintains the option and sole discretion<br>to rescind the Conversion Notice ("Rescindment") by delivering a notice of rescindment to the Company in the same manner<br>that a Conversion Notice is required to be delivered to the Company pursuant to the terms of this Note.
---	---
viii.	Transfer Agent Fees and Legal Fees. The issuance of the certificates shall be without charge or<br>expense to the Holder. The Company shall pay any and all Transfer Agent fees, legal fees, and advisory fees required for execution<br>of this Note and processing of any Notice of Conversion, including but not limited to the cost of obtaining a legal opinion with<br>regard to the Conversion. The Holder will deduct $3,000 from the principal payment of the Note solely to cover the cost of obtaining<br>any and all legal opinions required to obtain the Shares requested in any given Conversion Notice. These fees do not make provision<br>for or suffice to defray any legal fees incurred in collection or enforcement of the Note as described in Paragraph 13. All expenses<br>incurred by Holder, for the issuance and clearing of the Common Stock into which this Note is convertible into, shall immediately<br>and automatically be added to the balance of the Note at such time as the expenses are incurred by Holder.
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
ix.	Conversion Right Unconditional. If the Holder shall provide a Notice of Conversion as provided<br>herein, the Company’s obligations to deliver Common Stock shall be absolute and unconditional, irrespective of any claim<br>of setoff, counterclaim, recoupment, or alleged breach by the Holder of any obligation to the Company.
---	---
3.	Other Rights of Holder: Reorganization, Reclassification, Consolidation, Merger or Sale. Any recapitalization,<br>reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets to another<br>Person or other transaction which is effected in such a way that holders of Common Stock are entitled to receive (either directly<br>or upon subsequent liquidation) stock, securities, cash or other assets with respect to or in exchange for Common Stock is referred<br>to herein as “Organic Change.” Prior to the consummation of any (i) Organic Change or (ii) other Organic Change following<br>which the Company is not a surviving entity, the Company will secure from the Person purchasing<br>such assets or the successor resulting from such Organic Change (in each case, the “Acquiring Entity”) a written agreement<br>(in form and substance reasonably satisfactory to the Holder) to deliver to Holder in exchange for this Note, a security of the<br>Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Note, and reasonably satisfactory<br>to the Holder. Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and<br>substance reasonably satisfactory to the Holder) to ensure that the Holder will thereafter have the right to acquire and receive<br>in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable<br>upon the conversion of the Note, such shares of stock, securities, cash or other assets that would have been issued or payable<br>in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable<br>and receivable upon the conversion of the Note as of the date of such Organic Change (without taking into account any limitations<br>or restrictions on the convertibility of the Note set forth in Section 2(b) or otherwise). All provisions of this Note must be<br>included to the satisfaction of Holder in any new Note created pursuant to this section.
---	---
a.	Adjustment Due to Distribution. If the Company shall<br>declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock<br>repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Company’s shareholders<br>in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”),<br>then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders<br>entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to<br>the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the<br>record date for the determination of shareholders entitled to such Distribution.
---	---
4.	Representations and Warranties of the Company. In connection with the transactions provided for<br>herein, the Company hereby represents and warrants to the Holder the following:
---	---
a.	Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly<br>existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and authority<br>to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction<br>in which the failure to so qualify would have a material adverse effect on its business or properties.
---	---
b.	Authorization. All corporate action has been taken on the part of the Company, its officers, directors<br>and stockholders necessary for the authorization, execution and delivery of this Agreement. The Company has taken all corporate<br>action required to make all of the obligations of the Company reflected in the provisions of this Agreement, valid and enforceable<br>obligations. The shares of capital stock issuable upon conversion of the Note have been authorized or will be authorized prior<br>to the issuance of such shares.
---	---
c.	Fiduciary Obligations. The Company hereby represents that it intends to use the proceeds of the<br>Note primarily for the operations of its business and not for any personal, family, or household purpose. The Company hereby represents<br>that its board of directors, in the exercise of its fiduciary duty, has approved the execution of this Agreement based upon a reasonable<br>belief that the proceeds of the Note provided for herein is appropriate for the Company after reasonable inquiry concerning its<br>financial objectives and financial situation.
---	---
5.	Covenants of the Company.
---	---
a.	So long as the Company shall have any obligations under this Note, the Company shall not without<br>the Holder’s prior written consent pay, declare or set apart for such payment any dividend or other distribution (whether<br>in cash, property, or other securities) on shares of capital stock solely in the form of additional shares of Common Stock
---	---
b.	So long as the Company shall have any obligations under this Note, the Company shall not without<br>the Holder’s prior written consent sell, lease, or otherwise dispose of a significant portion of its assets outside the ordinary<br>course of business. Any consent to the disposition of any assets may be conditioned upon a specified use of the proceeds thereof.
---	---
6.	Reservation of Shares. The Company shall at all times, so long as any principal amount of the Note<br>is outstanding, reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of<br>effecting the conversion of the Note, eight times the number of shares of Common Stock as shall at all times be sufficient to effect<br>the conversion of all of the principal amount, plus Interest and Default Interest, if any, of the Note then outstanding (“Share<br>Reserve”), unless the Holder stipulates otherwise in the “Irrevocable Letter of Instructions to the Transfer Agent.”<br>So long as this Note is outstanding, upon written request of the Holder or via telephonic communication, the Company’s Transfer<br>Agent shall furnish to the Holder the then-current number of common shares issued and outstanding, the then-current number of common<br>shares authorized, the then-current number of unrestricted shares, and the then-current number of shares reserved for third parties.
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
7.	Voting Rights. The Holder of this Note shall have no voting rights as a note holder, except as<br>required by law, however, upon the conversion of any portion of this Note into Common Stock, Holder shall have the same voting<br>rights as all other Common Stock holders with respect to such shares of Common Stock then owned by Holder.
---	---
8.	Reissuance of Note. In the event of a conversion or redemption pursuant to this Note of less than<br>all of the Conversion Amount represented by this Note, the Company shall promptly cause to be issued and delivered to the Holder,<br>upon tender by the Holder of the Note converted or redeemed, a new note of like tenor representing the remaining principal amount<br>of this Note which has not been so converted or redeemed and which is in substantially the same form as this Note, as set forth<br>above.
---	---
9.	Default and Remedies.
---	---
a.	Event of Default. For purposes of this Note, an “Event<br>of Default” shall occur upon:
---	---
i.	the Company’s default in the payment of the outstanding principal, Interest or Default Interest<br>of this Note when due, whether at Maturity, acceleration or otherwise;
---	---
ii.	the occurrence of a Default of Conversion as set forth in Section 2(e)(v);
---	---
iii.	the failure by the Company for ten (10) days after notice to it to comply with any material provision<br>of this Note not included in this Section 10(a);
---	---
iv.	the Company’s breach of any covenants, warranties, or representations made by the Company<br>herein;
---	---
v.	any of the information in the DDF is false or misleading in any material respect;
---	---
vi.	the default by the Company in any Other Agreement entered into by and between the Company and Holder,<br>for purposes hereof “Other Agreement” shall mean, collectively, all agreements and instruments between, among or by:<br>(1) the Company, and, or for the benefit of, (2) the Holder and any affiliate<br>of the Holder, including without limitation, promissory notes;
---	---
vii.	the cessation of operations of the Company or a material subsidiary;
---	---
viii.	the Company pursuant to or within the meaning of any Bankruptcy Law; (a) commences a voluntary<br>case; (b) consents to the entry of an order for relief against it in an involuntary case; (c) consents to the appointment of a<br>Custodian of it or for all or substantially all of its property; (d) makes a general assignment for the benefit of its creditors;<br>or (e) admits in writing that it is generally unable to pay its debts as the same become due;
---	---
ix.	court of competent jurisdiction entering an order or decree under any Bankruptcy Law that: (a)<br>is for relief against the Company in an involuntary case; (b) appoints a Custodian of the Company or for all or substantially all<br>of its property; or (c) orders the liquidation of the Company or any subsidiary, and the order or decree remains unstayed and in<br>effect for thirty (30) days;
---	---
x.	the Company files a Form 15 with the SEC;
---	---
xi.	the Company’s failure to timely file all reports required to be filed by it with the Securities<br>and Exchange<br>Commission; xii. the Company’s failure to timely file<br>all reports required to be filed by it with OTC Markets to remain a “Current<br>Information” designated company; xiii. the Company’s Common Stock is reported as “No Inside” by OTC Markets<br>at any time while any principal, Interest or Default Interest under the Note remains outstanding;
---	---
xiv.	the Company’s failure to maintain the required<br>Share Reserve pursuant to the terms of the Irrevocable Letter<br>of Instructions to the Transfer Agent; xv. the Company directs its transfer agent not to transfer, or delays, impairs, or hinders<br>its transfer agent in transferring or issuing (electronically or in certificated form) any certificate for Shares of Common Stock<br>to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to<br>remove (or directs its transfer agent not to remove or impairs, delays and/or hinders its transfer agent from removing) any restrictive<br>legend (or to withdraw and stop transfer instructions) on any certificate for any Shares of Common Stock issued to the Holder upon<br>conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement<br>or threat that it does not intend to honor its obligations pursuant to a Conversion Notice submitted by the Holder) and any such<br>failure shall continue uncured for three (3) Business Days after the Conversion Notice has been delivered to the Company by Holder;
---	---
xvi.	the Company’s failure to remain current in its<br>billing obligations with its transfer agent and such delinquency causes the transfer agent to refuse to issue Shares to Holder<br>pursuant to a Conversion Notice; xvii. the Company effectuates<br>a reverse split of its Common Stock and fails to provide twenty (20) days prior written notice to Holder of its intention to do<br>so; or
---	---
xviii.	OTC Markets changes the Company's designation to 'No Information' (Stop Sign), 'Caveat Emptor'<br>(Skull and Crossbones), or 'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark Sign).
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
xix.	"Change of Control Transaction" means the occurrence<br>after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or "group"<br>(as described in Rule 13d5(b)(1) promulgated under the Securities Exchange Act of 1934) of effective control (whether through legal<br>or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 40% of the voting securities<br>of the Company, (b) the Company merges into or consolidates with any other Person, as that term is defined in the Securities Act<br>of 1933, as amended, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the<br>stockholders of the Company immediately prior to such transaction own less than 60% of the aggregate voting power of the Company<br>or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another<br>Person and the stockholders of the Company immediately prior to such transaction own less than 60% of the aggregate voting power<br>of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more<br>than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members<br>of the Board of Directors on the Issuance Date (or by those individuals who are serving as members of the Board of Directors on<br>any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are<br>members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it<br>is bound.
---	---
xx.	Altering the conversion terms of any notes that are currently outstanding.
---	---
xxi.	Notwithstanding anything to the contrary contained in this Note or the other related or companion<br>documents, a breach or default by the Company of any covenant or other term or condition contained in any of other<br>agreement entered into by the Company, after the passage of all applicable notice and cure or grace periods therein.
---	---

The Term “Bankruptcy Law” means Title 11, U.S. Code, or any similar Federal or State Law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

b.	Remedies. If an Event of Default occurs, the Holder may in its sole discretion determine to request<br>immediate repayment of all or any portion of the Note that remains outstanding; at such time the Company will be required to pay<br>the Holder the Default Amount (defined herein) in cash. For purposes hereof, the “Default Amount” shall mean: the product<br>of (A) the then outstanding principal amount of the Note, plus accrued Interest and Default Interest, divided by (B) the Conversion<br>Price as determined on the Issuance Date, multiplied by (C) the highest price at which the Common Stock traded at any time between<br>the Issuance Date and the date of the Event of Default. If the Company fails to pay the Default Amount within five (5) Business<br>Days of written notice that such amount is due and payable, then Holder shall have the right at any time, so long as the Company<br>remains in default (and so long and to the extent there are a sufficient number of authorized but unissued shares), to require<br>the Company, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of<br>the Company equal to the Default Amount divided by the Conversion Price then in effect.
c.	If at any time after the Issuance Date, the Company is not DWAC Eligible, then an additional 5%<br>discount shall be factored into the Conversion Price. If at any time after the Issuance Date, the Common Stock is not DTC Eligible,<br>then an additional 5% discount shall be factored into the Conversion Price. In addition, if any Event of Default occurs after the<br>Issuance Date, then an additional 5% discount shall be factored into the Conversion Price for each of the first three (3) Events<br>of Default that occur after the Issuance Date (for the avoidance of doubt, each occurrence of any Event of Default shall be deemed<br>to be a separate occurrence for purposes of the foregoing reductions, even if the same Event of Default occurs three (3) separate<br>times). For example, if there are three (3) separate occurrences of an Event of Default, then an additional 5% discount shall be<br>factored into the Conversion Price for the first such occurrence, and so on for each of the second and third occurrences of such<br>Event of Default.
---	---
10.	Vote to Change the Terms of this Note. This Note and any provision hereof may only be amended by<br>an instrument in writing signed by the Company and the Holder.
---	---
11.	Lost or Stolen Note. Upon receipt by the Company of evidence satisfactory to the Company of the<br>loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking<br>by the Holder to the Company in a form reasonably acceptable to the Company and, in the case of mutilation, upon surrender and<br>cancellation of the Note, the Company shall execute and deliver a new Note of like tenor and date and in substantially the same<br>form as this Note; provided, however, the Company shall not be obligated to re-issue a Note if the Holder contemporaneously requests<br>the Company to convert such remaining principal amount, plus accrued Interest and Default Interest, if any, into Common Stock.
---	---
12.	Payment of Collection, Enforcement and Other Costs. If: (i) this Note is placed in the hands of<br>an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (ii) an attorney is retained<br>to represent the Holder of this Note in any bankruptcy, reorganization, receivership or other proceedings affecting creditors’<br>rights and involving a claim under this Note, then the Company shall pay to the Holder all reasonable attorneys’ fees, costs<br>and expenses incurred in connection therewith, in addition to all other amounts due hereunder.
---	---
13.	Cancellation. After all principal, accrued Interest and Default Interest, if any, at any time owed<br>on this Note has been paid in full or otherwise converted in full, this Note shall automatically be deemed canceled, shall be surrendered<br>to the Company for cancellation and shall not be reissued.
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
14.	Waiver of Notice. To the extent permitted by law, the Company hereby waives demand, notice, protest<br>and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.
---	---
15.	Governing Law. This Note shall be construed and enforced in accordance with, and all questions<br>concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State<br>of Texas, without giving effect to provisions thereof regarding conflict of laws. Each party hereby irrevocably submits to the<br>nonexclusive jurisdiction of the state and federal courts sitting in Texas for the adjudication of any dispute hereunder or in<br>connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees<br>not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,<br>that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is<br>improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,<br>action or proceeding by sending, through certified mail or overnight courier, a copy thereof to such party at the address for such<br>notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice<br>thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.<br>EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY<br>DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
---	---
16.	Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided<br>in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including<br>a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance<br>with the provisions giving rise to such remedy and nothing herein shall limit the Holder’s right to pursue actual damages<br>for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no<br>characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with<br>respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder thereof<br>and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).
---	---
17.	Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall<br>limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Company and<br>the Holder and shall not be construed against any person as the drafter hereof.
---	---
18.	Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise<br>of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such<br>power, right or privilege preclude further exercise thereof or of any other right, power or privilege.
---	---
19.	Partial Payment. In the event of partial payment by the Holder, the principal sum due to the Holder<br>shall be prorated based on the consideration actually paid by the Holder such that the Company is only required to repay the amount<br>funded and the Company is not required to repay any unfunded portion of this Note, with the exception of any OID contemplated herein.
---	---
20.	Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between<br>the parties with regard to the subjects herein. None of the terms of this Agreement can be waived or modified, except by an express<br>agreement signed by all Parties hereto.
---	---
21.	Additional Representations and Warranties. The Company expressly acknowledges that the Holder,<br>including but not limited to its officer, directors, employees, agents, and affiliates, have not made any representation or warranty<br>to it outside the terms of this Agreement. The Company further acknowledges that there have been no representations or warranties<br>about future financing or subsequent transactions between the parties.
---	---
22.	Notices. All notices and other communications given or made to the Company pursuant hereto shall<br>be in writing (including facsimile or similar electronic transmissions) and shall be deemed effectively given: (i) upon personal<br>delivery, (ii) when sent by electronic mail or facsimile, as deemed received by the close of business on the date sent, (iii) five<br>(5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid or (iv) one (1) day<br>after deposit with a nationally recognized overnight courier, specifying next day delivery. All communications shall be sent either<br>by email, or fax, or to the email address or facsimile number set forth on the signature page hereto. The physical address, email<br>address, and phone number provided on the signature page hereto shall be considered valid pursuant to the above stipulations; should<br>the Company’s contact information change from that listed on the signature page, it is incumbent on the Company to inform<br>the Holder.
---	---
23.	Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable<br>law, such provision shall be excluded from this Agreement and the rest of the Agreement shall be enforceable in accordance with<br>its terms.
---	---
24.	Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates<br>the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum<br>rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will<br>not seek to claim or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal,<br>Interest or Default Interest on this Note.
---	---

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA
25.	Successors and Assigns. This Agreement shall be binding upon all successors and assigns hereto.<br>The Company may not assign this Note without the prior written consent of Holder. This Note and any shares of Common Stock issued<br>upon conversion of this Note may be offered, sold, assigned or transferred by Holder without the consent of the Company.
---	---

— SIGNATUREPAGE TO FOLLOW —

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA

IN WITNESS WHEREOF, the Company has caused this Note to be signed by its CEO, on and as of the Issuance Date.

Electromedical Technologies, Inc.

Signature:

By:	/s/ Matthew Woftson
Title:	Principal Executive Officer
---	---
Address:	16561 N 92nd Street Ste. 101
	Scottsdale AZ 85260
Email:	ceo@electromedtech.com
Phone:	(602) 790-8034
Facsimile:

JSJ Investments Inc.

Signature:

/s/ Sameer Hirji

Sameer Hirji, President

JSJ Investments Inc.

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA

10830 North Central Expressway, Suite 152

Dallas TX 75231

888-503-2599

Exhibit1 Conversion Notice

Reference is made to the 10% Convertible Note issued by Electromedical Technologies, Inc. (the "Note"), dated September 28, 2020 in the principal amount of $108,000 with 10% interest. This note currently holds a principal balance of $108,000. The features of conversion stipulate a Conversion Price equal to a 37% discount to the lowest trading price during the previous twenty (20) trading days to the date of a Conversion Notice pursuant to the provisions of Section 2(a)(ii) in the Note.

In accordance with and pursuant to the Note, the undersigned hereby elects to convert $______ of the principal/interest balance of the Note, indicated below into shares of Common Stock (the "Common Stock"), of the Company, by tendering the Note specified as of the date specified below.

Date of Conversion: __________

Please confirm the following information:

Conversion Amount: $ ____________________

Conversion Price: $ ____________________ ( ____ % discount from $ ____________________)

Number of Common Stock to be issued: _____________________________________________________________________

Current Issued/Outstanding: _______________________________________________________________________________

If the Issuer is DWAC eligible, please issue the Common Stock into which the Note is being converted in the name of the Holder of the Note and transfer the shares electronically to:

[BROKER INFORMATION]

Holder Authorization:

JSJ Investments Inc.

10830 North Central Expressway, Suite 152	*Do not send certificates to this address

Dallas, TX 75231

888-503-2599

Tax ID: 20-2122354

Sameer Hirji, President

[DATE]

[CONTINUED ON NEXT PAGE]

PLEASE BE ADVISED, pursuant to Section 2(e)(ii) of the Note, “Upon receipt by the Company of a copy of the Conversion Notice, the Company shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice, SEND, VIA EMAIL, FACSIMILE OR OVERNIGHT COURIER, A CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER INDICATING THAT THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in accordance with the terms herein. Within two (2) Business Days after the date of the Conversion Confirmation, the Company shall have issued and electronically transferred the shares to the Broker indicated in the Conversion Notice; should the Company be unable to transfer the shares electronically, they shall, within two (2) Business Days after the date of the Conversion Confirmation, have surrendered to FedEx for delivery the next day to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled.”

DocuSign Envelope ID: 39B6801E-C97B-406A-9620-579BB3F3D9FA

Signature:

/s/ Matthew Wolfson

Matthew Wolfson

CEO

Electromedical Technologies, Inc.

Exhibit 10(vi)

NEITHERTHE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLEHAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOTBE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIESUNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), INA GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAYBE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $128,000.00	Issue Date: October 22, 2020

PurchasePrice: $128,000.00

CONVERTIBLE PROMISSORY NOTE

FOR VALUERECEIVED, ELECTROMEDICAL TECHNOLOGIES, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of REDSTART HOLDINGS CORP., a New York corporation, or registered assigns (the “Holder”) the sum of $128,000.00 together with any interest as set forth herein, on October 22, 2021 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of ten percent (10%)(the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.00001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date of issuance of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III), each in respect of the remaining outstanding amount of this Note to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable conversion price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

| 1 |

| --- |

1.2 Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 1.0 minus the Applicable Percentage (as defined herein) multiplied by the Market Price (as defined herein). “Market Price” shall equal the average of the lowest three (3) daily VWAPs over the fifteen (15) consecutive Trading Days immediately preceding the date on which the Market Price is being determined. “VWAP” shall mean the daily dollar volumeweighted average sale price for the Common Stock on the Principal Market on any particular Trading Day during the period beginning at 9:30 a.m., New York City Time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00 p.m., New York City Time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its "Volume at Price" functions or, if the foregoing does not apply, the dollar volumeweighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York City Time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00 p.m., New York City Time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the OTCBB or the "pink sheets" by the National Quotation Bureau, Inc. If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the holder of the Note. All such determinations of VWAP shall to be appropriately and equitably adjusted in accordance with the provisions set forth herein for any stock dividend, stock split, stock combination or other similar transaction occurring during any period used to determine the Market Price (or other period utilizing VWAPs). “Trading Day” shall mean a day on which there is trading on the Principal Market. “Principal Market” shall mean the OTCBB or such other principal market, exchange or electronic quotation system on which the Common Stock is then listed for trading. “Applicable Percentage” shall mean 35%.

1.3 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved six times the number of shares that would be issuable upon full conversion of the Note (assuming that the 4.99% limitation set forth in Section 1.1 is not in effect)(based on the Variable Conversion Price of the Note (as defined in Section 1.2) from time to time, initially 2,171,014 shares)(the “Reserved Amount”). The Reserved Amount shall be increased (or decreased with the written consent of the Holder) from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Variable Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.4 Method of Conversion.

(a) Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

| 2 |

| --- |

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion.

(c) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

(d) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

(e) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

| 3 |

| --- |

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Variable Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

1.7 Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the periods set forth on the table immediately following this paragraph (the “Prepayment Periods”) or as otherwise agreed to between the Borrower and the Holder, the Borrower shall have the right, exercisable on not more than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.7. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder in a writing to the Borrower (which shall direction to be sent to Borrower by the Holder at least one (1) business day prior to the Optional Prepayment Date). If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash equal to the percentage (“Prepayment Percentage”) as set forth in the table immediately following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.4 hereof (the “Optional Prepayment Amount”).

| 4 |

---
---	---
1. The period beginning on the Issue Date and ending on the date which is one hundred fifty (150) days following the Issue Date.	123%
2. The period beginning on the date that is one hundred fifty-one (151) days from the Issue Date and ending one hundred eighty (180) days following the Issue Date.	129%

After the expiration of the Prepayment Periods set forth above, the Holder may submit an Optional Prepayment Notice to the Holder. Upon receipt by the Holder of the Optional Prepayment Notice post Prepayment Periods, the prepayment shall be subject to the Holder’s and the Borrower’s agreement with respect to the applicable Prepayment Percentage.

Notwithstanding anything contained herein to the contrary, the Holder’s conversion rights herein shall not be affected in any way until the Note is fully paid (funds received by the Holder) pursuant to an Optional Prepayment Notice.

ARTICLE II. CERTAIN COVENANTS

2.1 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1 Failure to Pay Principal and Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such breach continues for a period of five (5) days after written notice from the Holder.

3.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

| 5 |

| --- |

3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.7 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

3.8 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.9 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.10 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

| 6 |

| --- |

3.11 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.12 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.13 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable Variable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

| 7 |

| --- |

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Variable Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

ELECTROMEDICAL TECHNOLOGIES, INC.

16561 N. 92nd Street, Suite 101

Scottsdale, AZ 85260

Attn: Matthew Wolfson, Chief Executive Officer

Fax:

Email: ceo@electromedtech.com

If to the Holder:

REDSTART HOLDINGS CORP. 1188

Willis Avenue

Albertson, New York 11507

Attention: Gregg B. Solomon, President

e-mail: redstartholdingscorp@gmail.com

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman LLP

111 Great Neck Road, Suite 216

Great Neck, NY 11021

Attn: Allison Naidich

facsimile: 516-466-3555

e-mail: allison@nwlaw.com

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Most Favored Nation. During the period where any monies are owed to the Holder pursuant to this Note, if the Borrower engages in any future financing transactions with a third party investor, the Borrower will provide the Holder with written notice (the “MFN Notice”) thereof promptly but in no event less than 10 days prior to closing any financing transactions. Included with the MFN Notice shall be a copy of all documentation relating to such financing transaction and shall include, upon written request of the Holder, any additional information related to such subsequent investment as may be reasonably requested by the Holder. In the event the Holder determines that the terms of the subsequent investment are preferable to the terms of the securities of the Borrower issued to the Holder pursuant to the terms of the Purchase Agreement, the Holder will notify the Borrower in writing. Promptly after receipt of such written notice from the Holder, the Borrower agrees to amend and restate the Securities (which may include the conversion terms of this Note), to be identical to the instruments evidencing the subsequent investment. Notwithstanding the foregoing, this Section 4.4 shall not apply in respect of (i) an Exempt Issuance, or (ii) an underwritten public offering of Common Stock. “Exempt Issuance” means the issuance of: (a) shares of Common Stock or options to employees, officers, consultants, advisors or directors of the Borrower pursuant to any stock or option plan duly adopted for such purpose by a majority of the members of the Board of Directors or a majority of the members of a committee of directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of this Note and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Borrower, provided that any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Borrower and in which the Borrower receives benefits in addition to the investment of funds, but shall not include a transaction in which the Borrower is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

| 8 |

| --- |

4.5 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

4.6 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.7 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

4.9 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

| 9 |

| --- |

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on October 22, 2020

ELECTROMEDICALTECHNOLOGIES, INC.

By:	/s/ Matthew Wolfson
	Matthew Wolfson
	Chief Executive Officer

EXHIBITA -- NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of ELECTROMEDICAL TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of October 22, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

¨	The Borrower shall electronically<br> transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with<br> DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).<br><br> <br><br><br> <br>Name of DTC Prime Broker:<br><br> <br>Account Number:
¨	The undersigned hereby requests<br> that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are<br> based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is<br> necessary, on an attachment hereto:<br><br> <br><br><br> <br>REDSTART HOLDINGS CORP.<br><br> <br>1188 Willis Avenue<br><br> <br>Albertson, New York 11507<br><br> <br>Attention: Gregg B. Solomon, President<br><br> <br>e-mail: redstartholdingscorp@gmail.com
Date of conversion:	______________
---	---
Applicable Conversion Price:	$_____________
Number of shares of common stock to be issued pursuant to conversion of the Notes:	______________<br><br> <br>Amount of Principal
Balance due remaining
under the Note after this conversion:	______________
REDSTART HOLDINGS CORP.
---
By:
Name: Gregg B. Solomon, President
Date:

| 10 |

| --- |

SECURITIESPURCHASE AGREEMENT

This SECURITIESPURCHASE AGREEMENT (the “Agreement”), dated as of October 22, 2020, by and between ELECTROMEDICAL TECHNOLOGIES,INC., a Delaware corporation, with its address at 16561 N. 92nd Street, Suite 101, Scottsdale, AZ 85260 (the “Company”), and REDSTART HOLDINGS CORP., a New York corporation, with its address at 1188 Willis Avenue, Albertson, New York 11507 (the “Buyer”).

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”); and

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $128,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.00001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

Purchase and Sale of Note.

a. Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

| 11 |

| --- |

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about October 23, 2020, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.

b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. Information. The Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.

e. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act; or may be sold pursuant to an applicable exemption from registration, the Conversion Shares may bear a restrictive legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

f. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

| 12 |

| --- |

Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

c. Capitalization. As of the date hereof, the authorized common stock of the Company consists of 50,000,000 authorized shares of Common Stock, $0.00001 par value per share, of which 29,321,878 shares are issued and outstanding. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. .

d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

| 13 |

| --- |

f. SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates or if amended, as of the dates of the amendments, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates or if amended, as of the dates of the amendments, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Company is subject to the reporting requirements of the 1934 Act.

g. Absence of Certain Changes. Since June 30, 2020, except as set forth in the SEC Documents, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

h. Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

i. No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

j. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

k. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

l. Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

| 14 |

| --- |

COVENANTS.

a. Best Efforts. The Company shall use its best efforts to satisfy timely each of the conditions described in Section 7 of this Agreement.

b. Form D; Blue Sky Laws. The Company agrees to timely make any filings required by federal and state laws as a result of the closing of the transactions contemplated by this Agreement.

c. Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

d. Expenses. At the Closing, the Company’s obligation with respect to the transactions contemplated by this Agreement is to reimburse Buyer’ expenses shall be $3,000.00 for Buyer’s legal fees and due diligence fee.

e. Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except with the prior written consent of the Buyer.

f. Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note.

g. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

h. The Buyer is Not a “Dealer”. The Buyer and the Company hereby acknowledge and agree that the Buyer has not: (i) acted as an underwriter; (ii) acted as a market maker or specialist; (iii) acted as “de facto” market maker; or (iv) conducted any other professional market activities such as providing investment advice, extending credit and lending securities in connection; and thus that the Buyer is not a “Dealer” as such term is defined in the 1934 Act.

Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined in the Note) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to an exemption from registration, all such certificates shall bear the restrictive legend specified in Section 2(e) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and/or this Agreement. If the Buyer provides the Company and the Company’s transfer, at the cost of the Buyer, with an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

15
Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

d. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Board of Directors’ resolutions relating to the transactions contemplated hereby.

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g. The Conversion Shares shall have been authorized for quotation on an exchange or electronic quotation system and trading in the Common Stock on such exchange or electronic quotation system shall not have been suspended by the SEC or an exchange or electronic quotation system.

h. The Buyer shall have received an officer’s certificate described in Section 3(d) above, dated as of the Closing Date.

| 16 |

| --- |

Governing Law; Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Note or any related document or agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

| 17 |

| --- |

e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be as set forth in the heading of this Agreement with a copy by fax only to (which copy shall not constitute notice) to Naidich Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison Naidich, facsimile: 516-466-3555, e-mail: allison@nwlaw.com. Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

h. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

| 18 |

| --- |

i. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

j. No Strict Construction. The language used in this Agreement will bed deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

k. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

| 19 |

| --- |

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

ELECTROMEDICAL TECHNOLOGIES, INC.

By:
	Matthew Wolfson
	Chief Executive Officer

REDSTART HOLDINGS CORP.

By:
	Gregg B. Solomon
	President

| 20 |

| --- |

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Principal Amount of Note:	$128,000.00
Aggregate Purchase Price:	$128,000.00

| 21 |

| --- |

CORPORATE RESOLUTIONOF THE BOARD OF DIRECTORS

ELECTROMEDICALTECHNOLOGIES, INC.

I, the undersigned, a member of the Board of Directors of ELECTROMEDICAL TECHNOLOGIES, INC., a corporation organized under the laws of the State of Delaware (the “Corporation”), hereby certify that the following resolution, upon motions made, seconded and carried, was duly adopted pursuant to the laws of the State of Delaware and the articles and By-Laws of the Corporation and is now in full force and effect:

WHEREAS, the Board of Directors of the Corporation deem it in the best interests of the Corporation to enter into the Securities Purchase Agreement dated October 22, 2020 (the “Agreement”), in connection with the issuance of a convertible note of the Corporation in favor of Redstart Holdings Corp., in the aggregate principal amount of $128,000.00 (the “Note”), convertible into shares of common stock, $0.00001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note, along with an irrevocable letter agreement with Pacific Stock Transfer Co., the Corporation’s transfer agent, with respect to the reserve of shares of common stock of the Corporation to be issued upon any conversion of the Note; the issuance of such shares of common stock in connection with a conversion of the Note; and the indemnification of Pacific Stock Transfer Co. for all loss, liability, or expense in carrying out the authority and direction contained in the irrevocable letter agreement (the “Letter Agreement”);

NOW, THEREFORE, BE IT:

RESOLVED, that the Corporation is hereby authorized to enter into the Agreement, the Note and the Letter Agreement which provides in pertinent part: (i) reserve shares of common stock of the Corporation to be issued upon any conversion of the Note; (ii) issue such shares of common stock in connection with a conversion of the Note (issuance upon receipt of a notice of conversion of the holder of the Note) without any further action or confirmation by the Corporation; and the Corporation indemnifies Pacific Stock Transfer Co. for all loss, liability, or expense in carrying out the authority and direction contained in the Letter Agreement:

RESOLVED, that any executive officer of the Corporation be, and hereby is, authorized, empowered and directed, from time to time, to take such additional action and to execute, certify and deliver to the transfer agent of the Corporation, as any appropriate or proper to implement the provisions of the foregoing resolutions:

The undersigned, does hereby certify that I am a member of the Board of Directors of the Corporation; that the foregoing is a true and correct copy of resolutions duly adopted and ratified at a meeting of the Board of Directors of the Corporation duly convened and held in accordance with its bylaws and the laws of the State of Delaware, as transcribed by me from the minutes; and that the same have not in any way been modified, repealed or rescinded and are in full force and effect.

IN WITNESS WHEREOF, I have hereunto set my hands as Chief Executive Officer and Member of the Board of Directors of the Corporation.

Dated: October 22, 2020
	Matthew Wolfson,
	Chief Executive Officer/ Member of the Board

OFFICER'S CERTIFICATE

The undersigned, Matthew Wolfson, Chief Executive Officer of ELECTROMEDICAL TECHNOLOGIES, INC., a Delaware Corporation (the "Company"), in connection with the authorization and issuance of a Convertible Promissory Note in the aggregate principal amount of $128,000.00 in accordance with the Securities Purchase Agreement dated October 22, 2020 by and among the Company and REDSTART HOLDINGS CORP. (the "Purchase Agreement"), hereby certifies that:

1. I am the duly appointed Chief Executive Officer of the Company.

2. The representations and warranties made by the Company in Section 3 of the Purchase Agreement are true and correct in all material respects as of the date of this Officer's Certificate. The capitalization of the Company described in Section 3(c) of the Purchase Agreement has not changed as of the date hereof.

3. As of the date hereof, the Company has satisfied and duly performed all of the conditions and obligations specified in Section 7 of the Purchase Agreement to be satisfied on or prior to the Closing Date (as defined in the Purchase Agreement) or such conditions and obligations have been waived expressly in writing signed by the purchaser.

4. The Company has complied with or, if compliance prior to Closing (as defined in the Purchase Agreement) is not required, promptly following the Closing the Company will comply with, the filing requirements in respect of this transaction under (a) Regulation D under the Securities Act of 1933, as amended (the "1933 Act") (and applicable Blue Sky regulations) and (b) the Securities Exchange Act of 1934, as amended.

5. There has been no adverse change in the business, affairs, prospects, operations, properties, assets or condition of the Company since June 30, 2020, the date of the Company's most recent reviewed financial statements delivered to the Buyers (as defined in the Purchase Agreement), other than losses and matters which would not, individually or in the aggregate, have a Material Adverse Effect (as defined in the Purchase Agreement).

6. The Company is qualified as a foreign corporation in all jurisdictions in which the Company owns or leases properties, or conducts any business except where failure of the Company to be so qualified would not have a Material Adverse Effect (as defined in the Purchase Agreement).

IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as of October 22, 2020.

Matthew Wolfson
Chief Executive Officer
Funding date
---
Time:

DISBURSEMENT AUTHORIZATION

TO:	REDSTART HOLDINGS CORP.
FROM:	ELECTROMEDICAL TECHNOLOGIES, INC.
	Tranche #3 RED-_______ (EMED fka ELCQ)<br><br> <br>16561 N. 92nd Street, Suite 101 Scottsdale, AZ 85260
DATE:	October 22, 2020
RE:	Disbursement of Funds

In connection with the funding of an aggregate of $128,000.00 pursuant to that certain Securities Purchase Agreement dated as of October 22, 2020 (the "Agreement"), you are hereby directed to disburse such funds as follows:

1. $125,000.00 to ELECTROMEDICAL TECHNOLOGIES, INC. in accordance with the wire transfer instructions attached as Schedule A hereto; and

2. $2,500.00 to Naidich Wurman LLP for legal fee reimbursement; and

3. $500.00 to be retained by REDSTART HOLDINGS CORP. for a due diligence fee.

Upon receipt of such funds, you may release from escrow the Note, the Purchase Agreement and the instructions to Transfer Agent (each as defined in the Agreement).

Matthew Wolfson
Chief Executive Officer

Schedule A

Account Name:	Electromedical Technologies
Account Address:	16561 N 92nd St suite 101, Scottsdale,<br> AZ,85260
ABA Routing Number:	122101706
Account Number:	457023402995
Bank Name:	Bank of America
Bank Address:	6501 N Scottsdale Rd, Scottsdale, AZ 85250

I hereby direct that the proceeds of the funding referenced in the above Disbursement Authorization be sent via wire transfer to the above account.

Matthew Wolfson
Chief Executive Officer

ELECTROMEDICAL TECHNOLOGIES, INC.

October 22, 2020

Pacific Stock Transfer

4045 South Spencer St., Suite 403

Las Vegas, NV 89119

Pacific Stock Transfer:

ELECTROMEDICAL TECHNOLOGIES, INC., a Delaware corporation (the "Company") and REDSTART HOLDINGS CORP., a New York corporation (the "Investor") have entered into a Securities Purchase Agreement dated as of October 22, 2020 (the "Agreement") providing for the issuance of a certain 10% Convertible Promissory Note in the principal amount of $128,000.00 (the "Note") by the Company to the Investor.

Documentation

The Company has executed and delivered to PSTC a Board of Director’s Resolution, Minutes of the Meeting or Secretary’s Certificate and a copy of the executed Note between the Company and Investor. PSTC may rely on the authenticity of these documents in connection with the instructions contained in this letter (the “ITAI”).

Share Reservation

PSTC is irrevocably authorized and instructed to reserve 2,171,014 shares of common stock ("Common Stock") of the Company for issuance upon conversion of the Note. The amount of Common Stock so reserved cannot be altered, amended, or decreased without the written consent of the Investor. The Company expressly authorizes the Investor to increase the reservation of shares at any time without the Company’s consent so long as there are sufficient authorized and unissued shares of the Company not otherwise reserved available to do so.

Issuance of Stock

The Company hereby requests PSTC act promptly, without unreasonable delay and without the need for any action or confirmation by the Company with respect to the issuance of Common Stock pursuant to any Conversion Notices received from the Investor. PSTC must issue the shares of Common Stock to the

Investor, pursuant to this ITAI, despite any threatened or ongoing dispute between the Company and Investor, unless there is a valid court order prohibiting such issuance.

The Company hereby authorizes the issuance of such number of shares as will be necessary to fully convert the note under its terms and any such shares shall be considered fully paid and non-assessable at the time of their issuance. The shares to be issued are to be registered in the name of the holder of the securities submitted for conversion or exercise. PSTC is not responsible for determining the accuracy of any conversion notice and may rely on any instructions presented by or on behalf of the Investor.

Share Restrictions

So long as PSTC has previously received confirmation from the Company or Investor’s counsel that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Section 4(a)(1) without any restriction, and the Company or its counsel or Investor's counsel provides an opinion of counsel to that effect acceptable to you, other documentation that may reasonably be requested, and the number of shares to be issued are less than 4.99% of the total issued and outstanding common stock of the Company, such shares should be transferred without any legend which would restrict the transfer of the shares, and PSTC should remove all stop-transfer instructions relating to such shares (such shares shall be issued from the reserve, but in the event there are insufficient reserve shares of Common Stock to accommodate a notice of conversion under the Note and/or notice of exercise under the Warrant (each a “Conversion Notice”) PSTC and the Company agree that the Conversion Notice should be completed using authorized but unissued shares of Common Stock that the Company has in its treasury that are not otherwise reserved). Until such time as PSTC is advised by Investor or Company counsel as above that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Section 4(a)(1) without any restriction, PSTC is hereby instructed to place the following legend on the certificates:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR SECTION 4(A)(1) UNDER SAID ACT.

Indemnification

The Company hereby indemnifies PSTC and its officers, directors, principals, partners, agents and representatives, and holds each of them harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements of its attorneys) incurred by or asserted against PSTC arising out of or in connection with the instructions set forth herein, the performance of duties hereunder and otherwise in respect hereof, including the costs and expenses of defense against any claim or liability hereunder, including claims that may be asserted by the Company, except that the Company shall not be liable hereunder as to matters in respect of which it is determined that PSTC has acted with gross negligence or in bad faith. PSTC shall have no liability to the Company in respect to any action taken or any failure to act in respect of this if such action was taken or omitted to be taken in good faith, and PSTC shall be entitled to rely in this regard on the advice of counsel.

The Investor and Company expressly understand and agree that nothing in this ITAI shall require or be construed in any way to require PSTC, in its sole discretion as the Transfer Agent, to do, take or not do or take any action that would be contrary to any Federal or State law, rule, or regulation including but expressly not limited to both the Securities Act of 1933 and the Securities and Exchange Act of 1934 as amended and the rules and regulations promulgated there under by the Securities and Exchange Commission.

Board Authorization

The Board of Directors of the Company has approved the irrevocable instructions and does hereby extend the Company's ITAI to indemnify PSTC for all loss, liability or expense in carrying out the authority and direction herein contained on the terms herein set forth.

PSTC Compensation

The Company and Investor understand and agree to compensate PSTC for all services in relation to this ITAI per the PSTC fee schedule then in force. The Company and Investor understand and agree that the PSTC fee schedule is subject to change and the Investor and the Company agree to pay the full amount of any such ITAI and conversion according to the PSTC fee schedule then in force. All PSTC processing fees for Investor conversions will be expected and payable by Investor upon receipt of the request from the presenter of such request. PSTC shall not be obligated to process any request until and unless its fees are paid.

PSTC Resignation & Termination

The Company agrees that PSTC may resign at any time as the Company's transfer agent. The Company may terminate PSTC as transfer agent per the requirements of the agreement governing the relationship between PSTC and the Company. In the event PSTC resigns or is terminated by the Company, PSTC reserves the right to complete any pending transactions which are in good order or reject any pending transactions which are not in good order, the determination of good order being in the sole discretion of PSTC. Upon termination or resignation, it shall be the Company’s obligation to engage a suitable replacement transfer agent that will agree to serve as transfer agent for the Company and be bound by the terms and conditions of this ITAI within five (5) business days, and PSTC reserves the right to notify the successor agent of the details of this ITAI.

Note Satisfaction and Reserve Termination

The Company and the Investor agree that PSTC will be notified in writing by the Investor when the note has been fully converted. Upon such notification of termination of this ITAI, any and all remaining shares in the reservation related to this ITAI will immediately be released and returned to the Company’s authorized shares. The Company understands that it and not PSTC has the sole responsibility to identify and establish when any share reserve has been exhausted and fulfilled. PSTC will not cancel or abolish an existing share reservation amount without the express written consent of both the Company and the Investor or proof satisfactory to PSTC in its sole discretion that the security has been fully converted.

Amendments

The Investor is intended to be and is a third-party beneficiary hereof, and no amendment or modification to the instructions set forth herein may be made without the written consent of the Investor.

Very<br>truly yours,
ELECTROMEDICAL<br>TECHNOLOGIES, INC.
Matthew Wolfson
Chief Executive Officer

Acknowledged and Agreed:

Pacific Stock Transfer

By:
Name:
Title:

REDSTART HOLDINGS CORP.

By:
	Gregg B. Solomon
	President

Exhibit 10(vii)

Note Purchase Agreement

By and Among

Electromedical Technologies, Inc.

And

JR-HD Enterprises III, LLC

Dated as of November 3, 2020

TABLE OF CONTENTS

Article I.	DEFINITIONS	1
Section 1.01	Definitions.	1
Section 1.02	Interpretive Provisions.	2
Article II.	PURCHASE AND SALE	3
Section 2.01	Purchase and Sale.	3
Section 2.02	Deliverables at Closing.	3
Section 2.03	Closing.	3
Section 2.04	Use of Proceeds.	3
Article III.	REPRESENTATIONS AND WARRANTIESOF THE COMPANY	3
Section 3.01	Authorization of Transactions.	3
Section 3.02	Governmental Approvals; Non-contravention.	4
Section 3.03	Brokers.	4
Article IV.	REPRESENTATIONS AND WARRANTIESOF BUYER	4
Section 4.01	Authorization of Transactions.	4
Section 4.02	Governmental Approvals; Non-contravention.	4
Section 4.03	Investment Representations.	5
Section 4.04	Brokers.	6
Article V.	INDEMNIFICATION	6
Section 5.01	General Indemnification.	6
Section 5.02	Procedures for Indemnification.	6
Section 5.03	Payment.	6
Section 5.04	Effect of Knowledge on Indemnification.	6
Article VI.	MISCELLANEOUS	7
Section 6.01	Notices.	7
Section 6.02	Attorneys’ Fees	7
Section 6.03	Amendments; No Waivers; No<br>Third-Party Beneficiaries.	7
Section 6.04	Expenses.	8
Section 6.05	Further Assurances.	8
Section 6.06	Successors and Assigns; Benefit.	8
Section 6.07	Governing Law; Etc.	8
Section 6.08	Survival.	9
Section 6.09	Resolution of Disputes.	9
Section 6.10	Severability.	10
Section 6.11	Entire Agreement.	10
Section 6.12	Specific Performance.	10
Section 6.13	Construction.	10
Section 6.14	Counterparts.	10

NOTE PURCHASE AGREEMENT

This Note Purchase Agreement (together with all exhibits hereto, this “Agreement”) is entered into as of November 3, 2020 (the “Closing Date”), by and among Electromedical Technologies, Inc., a Delaware corporation (the “Company”) and JR-HD Enterprises III, LLC, a Delaware limited liability company (“Buyer”). The Company and the Buyer may be collectively referred to herein as the “Parties” and individually as a “Party”.

WHEREAS, the Company desires to issue and sell to the Buyer a convertible promissory note in the aggregate principal amount of $244,852.94 and in the form as attached hereto as Exhibit A (the “Note”) on the terms set forth herein and the Buyer wishes to purchase the Note on the terms and conditions provided for herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Article I. DEFINITIONS

Section 1.01 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms, as used herein, have the following meanings:

(a)	“Affiliate” means, with respect to a specified Person, any other Person that directly<br>or indirectly Controls, is Controlled by or is under common Control with, the specified Person.
(b)	“Business Day” means any day except Saturday, Sunday and any legal holiday or a day<br>on which banking institutions in Delaware generally are authorized or required by Law or other governmental actions to close.
---	---
(c)	“Contract” means any contract, commitment, understanding or agreement (whether oral<br>or written).
---	---
(d)	“Common Stock” mean shares of common stock, par value $0.00001 per share, of the Company.
---	---
(e)	“Control” means (a) the possession, directly or indirectly, of the power to vote 10%<br>or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly,<br>of the power to direct or cause the direction of the management and policies of a Person, by contractor otherwise, or (c) being<br>a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.
---	---
(f)	“Governmental Entity” means any federal, state, municipal, local or foreign government<br>and any court, tribunal, arbitral body, administrative agency, department, subdivision, entity, commission or other governmental,<br>government appointed, quasi-governmental or regulatory authority, reporting entity or agency, domestic, foreign or supranational.
---	---
(g)	“Law” means any applicable foreign, federal, state or local law (including common law),<br>statute, treaty, rule, directive, regulation, ordinances and similar provisions having the force or effect of law or an Order of<br>any Governmental Entity.
---	---

(h)	“Liabilities” means liabilities, obligations or responsibilities of any nature whatsoever,<br>whether direct or indirect, matured or un-matured, fixed or unfixed, known or unknown, asserted or un asserted, choate or inchoate,<br>liquidated or unliquidated, secured or unsecured, absolute, contingent or otherwise, including any direct or indirect indebtedness,<br>guaranty, endorsement, claim, loss, damage, deficiency, cost or expense.
(i)	“Lien” means, with respect to any property or asset, any lien, security interest, mortgage,<br>pledge, charge, claim, lease, agreement, right of first refusal, option, limitation on transfer or use or assignment or licensing,<br>restrictive easement, charge or any other restriction of any kind, and any conditional sale or voting agreement or proxy, and including<br>any restriction on the ownership, use, voting, transfer, possession, receipt of income or other exercise of any attributes of ownership,<br>in respect of such property or asset, and any agreement to give any of the foregoing.
---	---
(j)	“Losses” means any losses, damages, deficiencies, Liabilities, assessments, fines,<br>penalties, judgments, actions, claims, costs, disbursements, fees, expenses or settlements of any kind or nature, including legal,<br>accounting and other professional fees and expenses.
---	---
(k)	“Order” means any judgment, writ, decree, determination, award, compliance agreement,<br>settlement agreement, injunction, ruling, charge, judicial or administrative order, determination or other restriction of any Governmental<br>Entity or arbitrator.
---	---
(l)	“Person” means a natural person, a corporation, a limited liability company, a partnership,<br>an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality<br>thereof.
---	---
(m)	“Securities Act” means the United States Securities Act of 1933, as amended, and the<br>rules and regulation promulgated thereunder.
---	---
(n)	“Transactions” means the purchase and sale of the Note and the other transactions contemplated<br>under the Transaction Documents.
---	---
(o)	“Transaction Documents” means this Agreement, the Note and any other agreement, document,<br>certificate or writing delivered or to be delivered in connection with this Agreement and any other document related to the Transactions<br>related to the forgoing, including, without limitations, those delivered at the Closing.
---	---

Section 1.02 Interpretive Provisions. Unless the express context otherwise requires, the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; the terms “Dollars” and “$” mean United States Dollars, unless otherwise specified herein; references herein to a specific Section, Subsection, Recital or Exhibit shall refer, respectively, to Sections, Subsections, Recitals or Exhibits of this Agreement; wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; references herein to any gender shall include each other gender; references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained in this Section 1.02 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement; references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity; references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time; and references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder.

Article II. PURCHASE AND SALE

Section 2.01 Purchase and Sale. Subject to the terms and conditions of this Agreement, at the Closing (as defined below), the Company shall issue and sell to Buyer a Note in the aggregate principal amount of $244,852.94, for a purchase price of $225,000.00 (the “Purchase Price”), reflecting a $19,852.94 original issue discount.

Section 2.02 Deliverables at Closing. At the Closing (as defined below), Buyer shall deliver the Purchase Price to the Company via a check payable to the Company or wire transfer pursuant to the wire transfer instructions as provided by the Company to Buyer, and the Company shall issue to Buyer the Note.

Section 2.03 Closing. On the terms set forth herein, the closing of the Transactions (the “Closing”) shall take place by conference call and electronic communication (i.e., emails/pdf) or facsimile, with exchange of original signatures to follow by mail, on the date hereof and effective as of 11:59 p.m. Eastern time, on such date.

Section 2.04 Use of Proceeds. The Company covenants and agrees that it shall utilize the Purchase Price for working capital purposes.

Article III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Buyer that the following representations and warranties contained in this Article III are true and correct as of the Closing Date:

Section 3.01 Authorization of Transactions. The Company is a corporation duly authorized and in good standing in the State of Delaware and has the requisite power and capacity to execute and deliver the Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Company of the applicable Transaction Documents and the consummation of the Transactions have been duly and validly authorized by all requisite action on the part of the Company. The Transaction Documents to which the Company is a party have been duly and validly executed and delivered by The Company. Each Transaction Document to which the Company is a party constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms and conditions, except to the extent enforcement thereof may be limited by applicable bankruptcy, insolvency or other Laws affecting the enforcement of creditors’ rights or by the principles governing the availability of equitable remedies.

Section 3.02 Governmental Approvals; Non-contravention.

(a)

No consent, Order, action or non-action of, or filing, notification, declaration or registration with, any Governmental Entity or Person is necessary for the execution, delivery or performance by the Company of this Agreement or any other Transaction Document to which the Company is a party.

(b)

The execution, delivery and performance by the Company of the Transaction Documents to which the Company is a party, and the consummation by the Company of the Transactions, do not (i) violate or conflict with any Law or Order to which the Company or the Note may be subject, (ii) constitute a violation or breach of, be in conflict with, constitute or create (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, modification, cancellation or acceleration) of any obligation under any Contract to which the Company is a party or to which the Company or the Note are subject or by which the Company’s properties, assets or rights are bound or (iii) result in the creation or imposition of any Lien upon any of the rights, properties or assets of the Company or on the Note.

---

Section 3.03 Brokers. The Company has not engaged, or caused to be incurred any Liability or obligation to, any investment banker, finder, broker or sales agent or any other Person in connection with the origin, negotiation, execution, delivery or performance of the Transaction Documents to which it is a party, or the Transactions.

Article IV. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Company that the following statements contained in this Article IV are true and correct as of the Closing Date:

Section 4.01 Authorization of Transactions. Buyer is a limited liability company, duly qualified under the laws of the State of Delaware, and has the requisite power and capacity to execute and deliver the Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance by Buyer of the applicable Transaction Documents and the consummation of the Transactions have been duly and validly authorized by all requisite action on the part of Buyer. The Transaction Documents to which Buyer is a party have been duly and validly executed and delivered by Buyer. Each Transaction Document to which Buyer is a party constitutes the valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms and conditions, except to the extent enforcement thereof may be limited by applicable bankruptcy, insolvency or other Laws affecting the enforcement of creditors’ rights or by the principles governing the availability of equitable remedies.

Section 4.02 Governmental Approvals; Non-contravention.

(a)	No consent, Order, action or non-action of, or filing, notification, declaration or registration<br>with, any Governmental Entity is necessary for the execution, delivery or performance by Buyer of this Agreement or any other Transaction<br>Document to which Buyer is a party.
(b)	The execution, delivery and performance by Buyer of the Transaction Documents to which Buyer is<br>a party, and the consummation by Buyer of the Transactions, do not violate any Laws or Orders to which Buyer is subject or violate,<br>breach or conflict with any provision of Buyer’s organizational documents.
---	---

Section 4.03 Investment Representations.

(a)	Buyer understands and agrees that the consummation of this Agreement including the delivery of<br>the Note as contemplated hereby and the shares of Common Stock that may be issued to Buyer pursuant to the Note (the “Shares”<br>and, together with the Note, collectively, the “Securities”) constitute the offer and sale of securities under the<br>Securities Act and applicable state statutes and that the Securities are being acquired for Buyer’s own account and not with<br>a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration<br>under the Securities Act.
(b)	Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation<br>D under the Securities Act.
---	---
(c)	Buyer understands that the Securities are being offered and sold to Buyer in reliance upon specific<br>exemptions from the registration requirements of United States federal and state securities Laws and that the Company is relying<br>upon the truth and accuracy of, and Buyer’s compliance with, the representations, warranties, agreements, acknowledgments<br>and understandings of Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of Buyer<br>to acquire the Securities.
---	---
(d)	At no time was Buyer presented with or solicited by any leaflet, newspaper or magazine article,<br>radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting<br>otherwise than in connection and concurrently with such communicated offer. Buyer is not purchasing the Note acquired by Buyer<br>hereunder as a result of any “general solicitation” or “general advertising,” as such terms are defined<br>in Regulation D under the Securities Act, which includes, but is not limited to, any advertisement, article, notice or other communication<br>regarding the Note acquired by Buyer hereunder published in any newspaper, magazine or similar media or on the internet or broadcast<br>over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.
---	---
(e)	Buyer is acquiring the Securities for its own account as principal, not as a nominee or agent,<br>for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in<br>part and no other person has a direct or indirect beneficial interest in the Securities. Further, Buyer does not have any contract,<br>undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third<br>person, with respect to the Securities.
---	---
(f)	Buyer, either alone or together with its representatives, has such knowledge, sophistication and<br>experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment<br>in the Securities, and has so evaluated the merits and risks of such investment.
---	---
(g)	Buyer understands that no United States federal or state agency or any other governmental or state<br>agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities<br>nor have such authorities passed upon or endorsed the merits of the transactions set forth herein.
---	---

Section 4.04 Brokers. Buyer has not engaged any investment banker, finder, broker or sales agent or any other Person in connection with the origin, negotiation, execution, delivery or performance of any Transaction Document to which it is a party, or the Transactions.

Article V. INDEMNIFICATION

Section 5.01 General Indemnification. Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and such other Party’s Affiliates and each of their respective directors, officers, managers, partners, employees, agents, equity holders, successors and assigns (each, an “Indemnified Party”), from and against any and all Losses incurred or suffered by any Indemnified Party arising out of, based upon or resulting from any breach of any representation or warranty of the Indemnifying Party herein or breach by the Indemnifying Party of, or any failure the Indemnifying Party to perform, any of the covenants, agreements or obligations contained in or made pursuant to this Agreement or the Transaction Documents by the Indemnifying Party.

Section 5.02 Procedures for Indemnification. In the event that an Indemnified Party shall incur or suffer any Losses in respect of which indemnification may be sought under this Article V against the Indemnifying Party, the Indemnified Party shall assert a claim for indemnification by providing a written notice (the “Notice of Loss”) to the Indemnifying Party stating the nature and basis of such indemnification. The Notice of Loss shall be provided to the Indemnifying Party as soon as practicable after the Indemnified Party becomes aware that it has incurred or suffered a Loss.

Section 5.03 Payment. Upon a determination of liability under this Article V the Indemnifying Party shall pay or cause to be paid to the Indemnified Party the amount so determined within five (5) Business Days after the date of such determination. If there should be a dispute as to the amount or manner of determination of any indemnity obligation owed under this Agreement, the Indemnifying Party shall nevertheless pay when due such portion, if any, of the obligation that is not subject to dispute. Upon the payment in full of any amounts due under this Article V with respect to any claim, the Indemnifying Party shall be subrogated to the rights of the Indemnified Party against any Person with respect to the subject matter of such claim.

Section 5.04 Effect of Knowledge on Indemnification. The right to indemnification, reimbursement or other remedy based upon any representations, warranties, covenants and obligations set forth in this Agreement shall not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with any such representation, warranty, covenant or obligation. The waiver of any condition based upon the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, shall not affect the right to indemnification, reimbursement or other remedy based upon such representations, warranties, covenants or obligations.

Article VI. MISCELLANEOUS

Section 6.01 Notices.

(a)	Any notice or other communications required or permitted hereunder shall be in writing and shall<br>be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage<br>prepaid, addressed as follows:

if to the Company, to:

Electromedical Technologies, Inc.

Attn: Matthew Wolfson

16561 N. 92nd Street, Suite 101

Scottsdale, AZ 85260

Email: ceo@electromedtech.com

If to the Buyer, to:

JR-HD Enterprises III, LLC

Attn: Jeff Ramson

150 East 58th Street, 20th Floor

New York, NY 10155

Email: Jramson@pcgadvisory.com

With a copy, which shall not constitute notice, to:

Anthony L.G., PLLC

Attn: John Cacomanolis

625 N. Flagler Drive, Suite 600

West Palm Beach, FL 33401

Email: jcacomanolis@anthonypllc.com

(b)	Any Party may change its address for notices hereunder upon notice to each other Party in the manner<br>for giving notices hereunder.
(c)	Any notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered,<br>(ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt<br>requested and received and (iv) three (3) days after mailing, if sent by registered or certified mail.
---	---

Section 6.02 Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

Section 6.03 Amendments; No Waivers; No Third-Party Beneficiaries.

(a)	This Agreement may be amended, modified, superseded, terminated or cancelled, and any of the terms,<br>covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by both of the<br>Parties.

(b)	Every right and remedy provided herein shall be cumulative with every other right and remedy, whether<br>conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance<br>of any obligation by another Party shall be construed as a waiver of the same or any other default then, theretofore, or thereafter<br>occurring or existing.
(c)	Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction<br>of any condition herein nor any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or<br>remedy or from requiring satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation<br>of that Party or impairs any right of the Party giving such notice or making such demand, including any right to take any action<br>without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach<br>of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with respect<br>to such breach, or subsequent exercise of any right or remedy with respect to any other breach.
---	---
(d)	Notwithstanding anything else contained herein, no Party shall seek, nor shall any Party be liable<br>for, consequential, punitive or exemplary damages, under any tort, contract, equity, or other legal theory, with respect to any<br>breach (or alleged breach) of this Agreement or any provision hereof or any matter otherwise relating hereto or arising in connection<br>herewith.
---	---

Section 6.04 Expenses. Unless otherwise contemplated or stipulated by a Transaction Document, all costs and expenses incurred in connection with this Agreement shall be paid by the Party incurring such cost or expense.

Section 6.05 Further Assurances. Following the Closing, each Party shall execute and deliver such documents and other papers and take such further action as may be reasonably required to carry out the provisions of the Transaction Documents.

Section 6.06 Successors and Assigns; Benefit. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. No Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of the other Party. Other than as specifically set forth herein, including in Article V, nothing in this Agreement shall confer on any Person other than the Parties, and their respective successors and assigns, any rights, remedies, obligations, or Liabilities under or by reason of this Agreement.

Section 6.07 Governing Law; Etc.

(a)

This Agreement, and all matters based upon, arising out of or relating in any way to the Transactions or the Transaction Documents, including all disputes, claims or causes of action arising out of or relating to the Transactions or the Transaction Documents as well as the interpretation, construction, performance and enforcement of the Transaction Documents, shall be governed by the laws of the United States and the State of Delaware, without regard to any jurisdiction’s conflict-of-laws principles.

(b)	SUBJECT TO Section 6.09, ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS<br>AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE CONTEMPLATED TRANSACTIONS SHALL BE INSTITUTED SOLELY IN THE FEDERAL COURTS OF<br>THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK, IN EACH CASE LOCATED IN NEW YORK CITY, NEW YORK, AND EACH<br>PARTY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY<br>AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY<br>WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS<br>BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c)	EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT<br>MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE<br>TRANSACTIONS, THE PERFORMANCE THEREOF OR THE FINANCINGS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).<br>EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR<br>OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES<br>THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS<br>AND CERTIFICATIONS IN THIS Section 6.07(c).
---	---
(d)	Each of the Parties acknowledge that each has been represented in connection with the signing of<br>this waiver by independent legal counsel selected by the respective Party and that such Party has discussed the legal consequences<br>and import of this waiver with legal counsel. Each of the Parties further acknowledge that each has read and understands the meaning<br>of this waiver and grants this waiver knowingly, voluntarily, without duress and only after consideration of the consequences of<br>this waiver with legal counsel.
---	---

Section 6.08 Survival. The representations and warranties in this Agreement shall survive the Closing for a period of 12 months from the Closing Date, and no claim for indemnification may be made after such time. All covenants and agreements in this Agreement will survive until fully performed; provided, however, that, nothing herein shall prevent a Party from making any claim hereunder, or relieve any other Party from any liability hereunder, after such time for any breach thereof.

Section 6.09 Resolution of Disputes. Except as otherwise provided herein, all controversies, disputes or actions between the Parties arising out of the Transactions or this Agreement, including their respective Affiliates, owners, officers, directors, agents and employees, arising from or relating to this Agreement shall on demand of either party be submitted for arbitration to in accordance with the rules and regulations of the American Arbitration Association. The arbitration shall be conducted by one arbitrator jointly selected by each Party who is a party to the Dispute, provided, however, that if such Parties are unable to agree on the identity of the arbitrator within 10 Business Days of commencement of efforts to do so, each Party who is a party to the Dispute shall select one arbitrator and the arbitrators so selected shall select a final arbitrator, and the final arbitrator shall conduct the arbitration alone. The Parties agree that, in connection with any such arbitration proceeding, each shall submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedures) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding shall be barred. The arbitrator shall be instructed to use every reasonable effort to perform its services within seven days of request, and, in any case, as soon as practicable. The Parties agree to be bound by the provisions of any limitation on the period of time by which claims must be brought under Delaware law or any applicable federal law. The arbitrator(s) shall have the right to award the relief which he or she deems proper, consistent with the terms of this Agreement, including compensatory damages (with interest on unpaid amounts from due date), injunctive relief, specific performance, legal damages and costs. The award and decision of the arbitrator(s) shall be conclusive and binding on all Parties, and judgment upon the award may be entered in any court of competent jurisdiction. Any right to contest the validity or enforceability of this award shall be governed exclusively by the United States Arbitration Act. The arbitration shall be conducted in New York City, New York. The provisions of this Section 6.09 shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.

Section 6.10 Severability. If any provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any Party. Upon such determination that any provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the extent possible.

Section 6.11 Entire Agreement. The Transaction Documents constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the Parties with respect to the subject matter hereof and thereof.

Section 6.12 Specific Performance. Each Party agrees that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that each Party shall be entitled to seek specific performance of the terms hereof in addition to any other remedy at law or in equity.

Section 6.13 Construction. The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. In the event of a conflict between language or amounts contained in the body of this Agreement and language or amounts contained in the Exhibits attached hereto, the language or amounts in the body of the Agreement shall control. References to Articles or Sections shall refer to those portions of this Agreement. The use of the terms “hereunder,” “hereof,” “hereto” and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section or clause of or Exhibit to this Agreement.

Section 6.14 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that each Party need not sign the same counterpart. A facsimile copy or electronic transmission of a signature page shall be deemed to be an original signature page.

[Signature page follows]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Closing Date.

Electromedical Technologies, Inc.
By:
Name:	Matthew Wolfson
Title:	Chief Executive Officer
JR-HD Enterprises III, LLC
By:
Name:	Jeff Ramson
Title:	Manager

Exhibit A

Convertible Promissory Note

(Attached)

Exhibit 10(viii)

SettlementAgreement & Release

This Settlement Agreement & Release ("Agreement"), dated this 9^th^ day of November, 2020 is by and between Electromedical Technologies, Inc. a Delaware Corporation having a principal place of business at 16561 N 92nd Street Ste. 101, Scottsdale AZ 85260 ("EMED"), and Iakovos Tsakalidis ("TSAKALIDIS"). Both EMED and TSAKALIDIS may be collectively referred to as the “Parties.”

RECITALS:

Whereas, TSAKALIDIS historically provided financing to EMED in order to aid EMED in its operations. As security for TSAKALIDIS’ loans to EMED, EMED agreed to issue TSAKALIDIS 87,849 registered common shares. The shares were issued and were registered in EMED’s Form S-1 Registration Statement made effective by the Securities and Exchange Commission on August 6, 2020.

WHEREAS, As of the date hereof, EMED is in arrears in its payment obligations to TSAKALIDIS in the amount of $36,413.

WHEREAS, EMED and TSAKALIDIS have held good faith communications concerning amounts due through NOVEMBER 9, 2020, and have come to an agreement whereby EMED will pay TSAKALIDIS $36,413 on November 9, 2020, and TSAKALIDIS agrees to cancel and return to EMED’s treasury the 87,849 shares of registered common stock issued to TSAKALIDIS as security for his loans to EMED.

NOW THEREFORE, in consideration for the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, EMED and TSAKALIDIS hereto agree as follows:

Section 1.	Incorporation of the RECITALS clauses.

1.1. EMED and TSAKALIDIS acknowledge that all of the representations set forth in the RECITALS clauses of this Agreement are incorporated herein by reference and made a material part of this Agreement with the same force and effect as if more fully set forth here at. EMED and TSAKALIDIS agree to waive any rule of contract construction or legal presumption that would prohibit any court of competent jurisdiction from construing or enforcing this Agreement based upon the contents of the RECITALS above.

Page 1 of 3

Section 2.	Settlement Payment, Document Delivery; Release of All<br>Claims.

2.1. Settlement Payment. Upon execution of this Agreement, by 5:00 PM on November 9, 2020, EMED shall pay TSAKALIDIS $36,413. Upon payment, and by operation of this Agreement, TSAKALIDIS cancels and returns to EMED’s treasury the 87,869 shares of common stock registered in his name in EMED’s Form S-1 registration statement.

2.2. Release of All Claims. Except as provided for herein, and in further consideration of the mutual covenants hereto, TSAKALIDIS agrees on behalf of him, and his respective successors, assigns, to irrevocably and unconditionally remises, releases, acquits, satisfies and forever discharges EMED, specifically including its agents, directors, officers, affiliates, employees representatives, insurance carriers, attorneys, divisions and subsidiaries, (and all agents, directors, officers, employees, representatives, insurance carriers, and attorneys of such divisions and subsidiaries), and their predecessors, successors, administrators and assigns, and all persons acting by, through, under, or in concert with any of them (collectively "Releases"), of and from any and all claims, actions, causes of action, suits, debts, charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, and expenses (including attorney fees and costs actually incurred), of any nature whatsoever, known or unknown, in law or equity, arising out of the facts contained in the RECITALS.

2.3. Except as for any specific rights created by virtue of this Agreement, TSAKALIDIS promises not to institute any future suits or proceedings at law or in equity or any arbitration or administrative proceedings against EMED on account of any claim or cause of action arising specifically out of the facts in the RECITALS herein.

2.4. This is intended as a full and complete release and discharge of any or all claims that TSAKALIDIS may or might have or had against each other regarding the facts in the RECITALS, and TSAKALIDIS does so in full and final settlement, release and discharge of any and all such claims and the Parties intend to and does forever hereby release and discharge the each other of and from any and all liability of any nature whatsoever for all damages to each other, specifically including, but not limited to, all past, present and future rights to recover for sums of money compromised in this Agreement on account of said events alleged in the RECITALS, as well as for all consequences, effects and results thereto and resulting damages to each other, whether the same or any circumstances pertaining thereto are now known or unknown to TSAKALIDIS or anyone else, expected or unexpected by TSAKALIDIS or anyone else, or have already appeared or developed or may now be latent or may in the future appear or develop or become known to TSAKALIDIS or anyone else.

2.7 This Agreement constitutes a compromise, settlement, and release of disputed claims and is being entered into solely to avoid the burden, inconvenience, and expense of litigating those claims. This Agreement is not to be and shall never be construed or deemed an admission or concession by any of the Parties hereto of liability or culpability at any time for any purpose concerning any claim being compromised, settled, and released, or any other matter.

Section 3.	Miscellaneous Provisions.

3.1. Notices. All notices, offers of other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given or made (i) if delivered personally; or (ii) upon receipt by facsimile transmission (with written confirmation of receipt) or confirmed electronic mail; or (iii) after the expiration of the second business day following deposit with documented overnight delivery service; or (iv) five business days of transmission by regular mail. All notices given or made pursuant hereto shall be so given or made to the parties at the following addresses:

If to EMED:	Electromedical Technologies, Inc.
	Attention: Mr. Matthew Wolfson
	16561 N. 92^nd^ Street, Ste. 101
	Scottsdale, AZ 85260
	Telephone: 602-790-8034
	Email: ceo@electromedtech.com
If to TSAKALIDIS:	Iakovos Tsakalidis
	6940 E Doubletree Ranch Rd
	Paradise Valley, AZ, 85253
	Cell: 480 277 9679

The address of any party hereto may be changed by a notice in writing given in accordance with the provisions hereof.

3.2. Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, such provision shall be severed and enforced to the extent possible or modified in such a way as to make it enforceable, and the invalidity, illegality or unenforceability thereof shall not affect the validity, legality or enforceability of the remaining provisions of this Agreement.

3.3. Binding on Affiliated Third Parties. This Agreement shall inure to the benefit of and shall be binding upon EMED and TSAKALIDIS and their respective agents, representatives, executors, administrators, trustees, personal representatives, partners, directors, officers, shareholders, agents, attorneys, insurers, employees, representatives, predecessors, successors, heirs and assigns.

3.4. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to principles of conﬂict of laws. Any controversy or claim arising out of or relating to this Settlement Agreement or the Breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The Arbitration shall be conducted in Scottsdale, AZ.

3.5. Counterparts. This Agreement may be executed in multiple counterparts, all of which shall be deemed originals, and with the same effect as if all Parties had signed the same document. All of such counterparts shall be construed together with and shall constitute one Agreement, but in making proof, it shall only be necessary to produce one such counterpart. A facsimile transmission shall be as valid and enforceable as an original.

Page 2 of 3

3.6. Entire Understanding. This Agreement is the entire, final, and complete agreement of the Parties relating to the subject of this Agreement, and supersedes and replaces all prior or existing written and oral agreements between the Parties or their representatives relating thereto.

3.7. Further Assurances. The parties agree to execute and deliver to each other such other documents, and to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement.

3.8. Amendments. This Agreement shall not be amended or otherwise modified unless in writing signed by all of the parties hereto.

3.9. Acknowledgment. EMED and TSAKALIDIS acknowledges (i) They have read this Agreement and have consulted with their respective attorneys concerning its contents and legal consequences and have requested any change in language necessary or desirable to effectuate their intent and expectations so that the rule of construction of contracts construing ambiguities against the drafting party shall be inapplicable; (ii) They have taken all corporate actions and obtained all corporate authorizations, consents and approvals as are conditions precedent to their authority to execute this Agreement, and thus warrant that they are fully authorized to bind the Party for which they execute this Agreement; and, (iii) There has been and will be no assignment or other transfer of any claim released herein, or any part thereof, and each Party agrees to defend, indemnify and hold harmless the other party from any claims, obligations, or other liabilities, including specifically attorney’s fees and costs incurred, which result from the assertion by any third party of a right to any claim which is released by this Agreement. The foregoing warranties and representations shall survive the execution and delivery of this Agreement.

3.10. Assignment. This Agreement shall be binding upon and inure to the benefit of each party hereto or to such party's heirs, executors, administrators, successors and assigns and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

3.11. Confidentiality. Each of the parties represents and agrees that it will keep the terms, provisions and amounts in this Agreement confidential and that it will not, without the consent of the other Party, disclose, divulge or furnish such confidential information to any person other than their immediate families, their attorney and accountant (all of whom will be informed of and bound by this confidentiality provision) except as required by law or, if necessary, to any applicable taxing authorities.

IN WITNESS WHEREOF, the parties have signed this agreement upon the date first written above.

ELECTROMEDICALTECHNOLOGIES, INC.

By:
Name: MATTHEW WOLFSON
Title: CEO, CFO
Iakovos TSAKALIDIS
By:

Page 3 of 3

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE &CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the SarbanesOxley Act of 2002, I, Matthew Wolfson, certify that:

1.	I have reviewed this report on Form 10-Q of Electromedical<br>Technologies, Inc., for the fiscal quarter ended September 30, 2020;
2.	Based on my knowledge, this report does not contain any<br>untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances<br>under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and<br>other financial information included in this report, fairly present in all material respects the financial condition, results<br>of operations and cash flows of the registrant as of, and for, the periods presented in this report;
---	---
4.	The registrant’s other certifying officer and I<br>are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)<br>and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the<br>registrant and have:
---	---
(a)	Designed such disclosure controls and procedures, or<br>caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating<br>to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly<br>during the period in which this report is being prepared;
---	---
(b)	Designed such internal control over financial reporting,<br>or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance<br>regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance<br>with generally accepted accounting principles;
---	---
(c)	Evaluated the effectiveness of the registrant’s<br>disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls<br>and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the registrant’s<br>internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s<br>fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,<br>the registrant’s internal control over financial reporting; and
---	---
5.	I have disclosed, based on my most recent evaluation<br>of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s<br>board of directors (or persons performing the equivalent functions):
---	---
(a)	All significant deficiencies and material weaknesses<br>in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s<br>ability to record, process, summarize and report financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management<br>or other employees who have a significant role in the registrant’s internal controls over financial reporting.
---	---

Date: November 16, 2020

/s/ Matthew Wolfson

Matthew Wolfson

Chief Executive Officer

& Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANESOXLEY ACTOF 2002

In connection with the quarterly report of Electromedical Technologies, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew Wolfson, Chief Executive Officer & Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that, to the best of my knowledge and belief:

1.	The Report fully complies with the requirements of<br>Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents,<br>in all material respects, the financial condition and result of operations of the Company.
---	---

Date: November 16, 2020

/s/MatthewWolfson

Matthew Wolfson

Chief Executive Officer &

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.