Electromedical Technologies, Inc 10-Q for FY2024 Q1

Electromedical Technologies, Inc (EMED)

10-Q 2024-06-14 For: 2024-03-31

Added on April 06, 2026

About this 10-Q

Electromedical Technologies, Inc filed this 10-Q on June 14, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $290.24K; down 23.3% from $378.65K a year earlier
Net loss: $836.27K; compared with a net loss of $456.06K a year earlier
Diluted EPS: -$0.00; compared with -$0.00 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

16413 N. 91^st Street, Ste. C140
Scottsdale, AZ	85260
(Address of principal executive offices)	(Zip Code)


Title of Each Class	Trading Symbol(s)	Name of each Exchange on which Registered
Common Stock	EMED	None

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒


PART I. FINANCIAL INFORMATION

Item 1.	UNAUDITED FINANCIAL STATEMENTS:	3

	BALANCE SHEETS AS OF MARCH 31, 2024 AND DECEMBER 31, 2023	3

	STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	4

	STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	6

	STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	7

	NOTES TO THE UNAUDITED FINANCIAL STATEMENTS	8

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23

Item 4.	CONTROLS AND PROCEDURES	23

PART II. OTHER INFORMATION		25

Item 1.	LEGAL PROCEEDINGS	25

Item 1A.	RISK FACTORS	25

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	25

Item 3.	DEFAULTS UPON SENIOR SECURITIES	42

Item 4.	MINE SAFETY DISCLOSURE	42

Item 5.	OTHER INFORMATION	43

Item 6.	EXHIBITS	43

SIGNATURES		46


	March 31, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	78,843	$	87,704
Accounts receivable		3,501		4,399
Inventories		46,561		68,517
Prepaid expenses and other current assets		290,470		288,565
Total current assets		419,375		449,185
Right of use asset		137,942		149,493
Property and equipment, net		149,705		149,705
Total assets	$	707,022	$	748,383

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	241,970	$	239,481
Credit cards payable		27,077		28,097
Accrued expenses and other current liabilities		603,630		916,971
Customer deposits		185,275		197,325
Convertible promissory notes, net of discount of $0 and $375,865, respectively		1,629,559		1,393,601
Lease liability, current portion		50,762		48,745
Derivative liabilities- convertible promissory notes		1,408,002		532,334
Total current liabilities		4,146,275		3,356,554

Long-term liabilities:
Government debt, net of current portion		150,000		150,000
Lease liability, net of current portion		92,671		106,200
Other liabilities		6,260		8,416
Total liabilities		4,395,206		3,621,170

Commitments and contingencies (Note 10)		—		—

Stockholders’ deficit
Series A Preferred Stock, $.00001 par value, 1,000,000 shares authorized and outstanding		365,000		365,000
Series B Preferred Stock, $.00001 par value, 1 share authorized and outstanding at March 31, 2024 and December 31, 2023		400,000		400,000
Common stock, $.00001 par value, 1,999,000,000 shares authorized; 486,482,787 and 463,286,208 shares outstanding at March 31, 2024 and December 31, 2023, respectively		4,863		4,631
Additional paid-in-capital		23,847,975		23,827,330
Accumulated deficit		(28,306,022)		(27,469,748)
Total stockholders’ deficit		(3,688,184)		(2,872,787)
Total liabilities and stockholders’ deficit	$	707,022	$	748,383


	THREE MONTHS ENDED MARCH 31,
	2024		2023
Net sales	$	290,244	$	378,646

Cost of sales		72,857		87,696

Gross profit		217,387		290,950

Selling, general and administrative expenses		372,263		1,552,488

Loss from operations		(154,876)		(1,261,538)

Other income (expense)
Interest expense		(59,320)		(388,201)
Change in fair value of derivative liabilities		(676,374)		—
Gain on sale of fixed assets		—		1,193,676
Gain (loss) on derivative liabilities		(196,510)		—
Other income		250,806		—
Total other expense		(681,398)		805,475

Net loss	$	(836,274)	$	(456,063)
Deemed dividend related to warrant resets		—		—
Net loss attributable to common stockholders	$	(836,274)	$	(456,063)

Weighted average shares outstanding - basic and diluted		464,815,653		240,567,805
Weighted average loss per share - basic and diluted	$	(.002)	$	(.002)


	Series A Preferred Stock			Series B Preferred Stock			Common Stock			Paid in		Accumulated		Stockholders’
	Amount		Shares	Amount		Shares	Amount		Shares	Capital		Deficit		Deficit
Balance, December 31, 2023	$	365,000	1,000,000	$	400,000	1	$	4,631	463,286,208	$	23,827,330	$	(27,469,748)	$	(2,872,787)


Conversion of convertible promissory notes, accrued interest and derivative liabilities		—	—		—	—		232	23,196,579		20,645		—		20,877

Net loss		—	—		—	—		—	—		—		(836,274)		(836,274)

Balance, March 31, 2024	$	365,000	1,000,000	$	400,000	1	$	4,863	486,482,787	$	23,847,975	$	(28,306,022)	$	(3,688,184)


														Total
	Series A Preferred Stock			Series B Preferred Stock			Common Stock			Paid in		Accumulated		Stockholders’
	Amount		Shares	Amount		Shares	Amount		Shares	Capital		Deficit		Deficit
Balance, December 31, 2022	$	365,000	1,000,000	$	—	—	$	1,896	189,784,529	$	22,237,300	$	(24,825,041)	$	(2,220,845)

Shares issued for consulting services		—	—		—	—		350	35,000,000		314,650		—		315,000

Share issued as CEO compensation		—	—		400,000	1		—	—		—		—		400,000

Shares issued in conjunction with settlement reset		—	—		—	—		461	46,102,156		697,539		—		698,000

Cashless warrant exercises		—	—		—	—		180	18,000,000		(180)		—		—

Trigger warrants issued		—	—		—	—		—	—		160,000		—		160,000

Conversion of convertible promissory note		—	—		—	—		50	5,000,000		49,950		—		50,000

Settlement of stock -based compensation liabilities		—	—		—	—		30	3,000,000		20,970		—		21,000

Net loss		—	—		—	—		—	—		—		(456,063)		(456,063)

Balance, March 31, 2023	$	365,000	1,000,000	$	400,000	1	$	2,967	296,886,685	$	23,480,229	$	(25,281,104)	$	(1,032,908)


	2024		2023
Cash flows from operating activities:
Net loss	$	(836,274)	$	(456,063)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		—		715,000
Depreciation and amortization		—		4,557
Amortization of right of use asset		11,551		—
Amortization of debt discount and warrant expense		—		320,204
Change in fair value of derivative liabilities		676,374		—
Loss on derivatives		196,510		—
Gain on sale of fixed assets		—		(1,193,676)
Other		—		876
Change in operating assets and liabilities:
Accounts receivable		898		3,618
Inventories		21,956		(97,643)
Prepaid expenses and other current assets		(1,905)		37,670
Accounts payable		2,489		276,900
Credit cards payable		(1,020)		(3,001)
Accrued expenses and other current liabilities		(205,378)		22,044
Customer deposits		(12,050)		(83,588)
Lease liability		(11,512)		—
Other liabilities		—		366
Net cash used in operating activities		(158,361)		(452,736)

Cash flows from investing activities:
Sale of property and equipment		—		1,894,588
Net cash provided by investing activities		—		1,894,588
Cash flows from financing activities:
Repayments on bank debt		—		(522,401)
Issuance of convertible promissory notes		149,500		—
Repayments on convertible promissory notes		—		(52,849)
Net cash provided by (used in) provided by financing activities		149,500		(575,250)

Net increase (decrease) in cash and cash equivalents		(8,861)		866,602

Cash and cash equivalents, beginning of period		87,704		368,425

Cash and cash equivalents, end of period	$	78,843	$	1,235,027

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	23,227	$	22,934
Income taxes	$	—	$	—

Non-cash investing and financing activities:

Settlement of stock-based compensation liabilities	$	—	$	719,000
Conversion of convertible promissory notes, derivatives and accrued interest into shares of common stock	$	20,877	$	50,000


Fair value- December 31, 2023	$	532,334
Derivative liabilities in conjunction with settlement of convertible promissory notes		213,957
Conversion of convertible promissory notes		(14,663)
Change in fair value of derivative liabilities		676,374
Fair value- March 31, 2024	$	1,408,002


	Level 1		Level 2		Level 3		Total
Liabilities

Derivative liabilities – convertible promissory notes	$	—	$	—	$	1,408,002	$	1,408,002

Total fair value	$	—	$	—	$	1,408,002	$	1,408,002


	March 31,		December 31,
	2024		2023
Building	$	—	$	—
Tooling		149,705		149,705
Furniture and equipment		24,987		24,987
		174,692		174,692
Less: accumulated depreciation and amortization		(24,987)		(24,987)
	$	149,705	$	149,705


	March 31,		December 31,
Convertible promissory notes	2024		2023
Principal balance	$	1,648,204	$	1,393,601
Debt discount balance		(18,645)		—
Net Notes balance	$	1,629,559	$	1,393,601


	Principal		Debt Discount		Net
Pre 2020	$	50,000	$	—	$	50,000
October 2021		90,639		—		90,639
February 2022		29,573		—		29,573
March 2022		305,501		—		305,501
August 2022		105,500		—		105,500
September 2022		917,491		—		917,491
March 2024		149,500		(18,645)		130,855
	$	1,648,204	$	(18,645)	$	1,629,559


	2023
Market value of common stock	$	0.0009
Expected volatility		181.2-200.3	%
Expected term (in years)		0.27-1.5
Risk-free interest rate		4.91-4.98	%


Date Issued	Exercise Price		Number Outstanding	Expiration Date
May 1, 2020	$	0.52	100,000		May 1, 2025
October 1, 2021	$	0.025	9,000,000		October 1, 2026
October 17, 2021	$	0.025	450,000		October 17, 2024
August 10, 2022	$	0.00102	3,336,843		August 10, 2027
September 29, 2022	$	0.00102	2,780,690		September 29,2027
February 11, 2023	$	0.00102	500,000		February 11, 2028
			16,167,533


Date Issued	Exercise Price		Number Outstanding	Expiration Date
December 1, 2018	$	0.00102	170,898		December 1, 2023
May 1, 2020	$	0.52	100,000		May 1, 2025
October 1, 2021	$	0.025	9,000,000		October 1, 2026
October 17, 2021	$	0.025	450,000		October 17, 2024
August 10, 2022	$	0.00102	3,336,843		August 10, 2027
September 29, 2022	$	0.00102	2,780,690		September 29,2027
February 11, 2023	$	0.00102	500,000		February 11, 2028
March 10, 2023	$	0.00102	12,500,000		March 10, 2028
September 15, 2023	$	0.00102	148,000,000		September 15, 2026
			176,838,431


2025	$	65,757
2026	$	67,730
2027	$	34,366
Total lease payments	$	167,853
Less imputed interest	$	(24,420)

Total	$	143,433


	2024		2023		Change
Marketing	$	1,686	$	5,875	$	(4,189)
Commissions		18,600		55,100		(36,500)
Payroll related		201,556		638,944		(437,388)
Consulting and professional fees		68,884		455,290		(386,406)
Research and development		—		289,934		(289,934)
Other operating expenses		81,537		107,345		(25,808)
	$	372,263	$	1,552,488	$	(1,180,225)

Exhibit No.	Description of Exhibit	Location

3(i)	Certificate of Incorporation.	Incorporated by reference from the Company’s Form S-1/A-4 filed on July 20, 2020.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on August 23, 2017, converting from a limited liability company to a C corporation.	Incorporated by reference from the Company’s Form S-1/A-4 filed on July 20, 2020.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on November 1, 2019, designating Series A Preferred Shares.	Incorporated by reference from the Company’s Form S-1/A-4 filed on July 20, 2020.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on July 9, 2020, increasing authorized common stock to 50 million shares.	Incorporated by reference from the Company’s Form S-1/A-4 filed on July 20, 2020.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on December 3, 2020, increasing authorized common stock to 125 million shares.	Incorporated by reference from the Company’s Form 8-K filed December 3, 2020.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on October 14, 2021, increasing authorized common shares to 251 million shares.	Incorporated by reference from the Company’s 8-K filed October 14, 2021.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on September 21, 2022, increasing authorized common shares to 1 billion and one shares.	Incorporated by reference from the Company’s 8-K filed September 19, 2022.

3(i)	Amendment to Certificate of Incorporation filed with the Delaware Secretary of State on January 31, 2023, increasing authorized common shares to 2 billion and one shares.	Incorporated by reference from the Company’s 8-K filed January 26, 2023 .

3(ii)	Corporate Bylaws.	Incorporated by reference from the Company’s Form S-1/A-4 filed on July 20, 2020.

4(vi)	Description of Securities	Incorporated by reference from the Company’s Form 8a-12g filed August 5, 2020.

10.1	October 14, 2021, Securities Purchase Agreement, Convertible Promissory Note, Common Stock Purchase Warrant, Mast Hill Fund, LP.	Incorporated by reference from the Company’s Form 8-K filed October 21, 2021.


10.2	November 10, 2021, Common Stock Purchase Agreement, White Lion Capital, LLC	Incorporated by reference from the Company’s Form 10-Q filed November 15, 2021.

10.3	November 10, 2021, Registration Rights Agreement, White Lion Capital, LLC	Incorporated by reference from the Company’s Form 10-Q filed November 15, 2021.

10.4	February 11, 2022, Promissory Note, Mast Hill Fund, LP.	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.5	February 11, 2022, Warrant Agreement, Mast Hill Fund, LP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.6	February 11, 2022, Securities Purchase Agreement, Mast Hill Fund, LP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023.

10.7	February 11, 2022, Second Warrant, Mast Hill Fund, LP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.8	February 11, 2022, Third Warrant, Mast Hill Fund, LP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023.

10.9	March 3, 2022, Stock Purchase Agreement, Blue Lake Partners, LLP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.10	March 3, 2022, Promissory Note, Blue Lake Partners, LLP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.11	March 3, 2022, Warrant Agreement, Blue Lake Partners, LLP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.12	March 3, 2022, Second Warrant, Blue Lake Partners, LLP	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.13	June 21, 2022, Settlement Agreement, JR-HD Enterprises III, LLC	Incorporated by reference from the Company’s Form 10-K filed March 31, 2023

10.14	March 25, 2024 Mutual Settlement and Release Agreement, Mast Hill Fund LP	Incorporated by reference from the Company’s Form 10-K filed May 1, 2024

10.15	April 3, 2024 Mutual Settlement and Release Agreement, Blue Lake Partners, LLC	Incorporated by reference from the Company’s Form 10-K filed May 1, 2024

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a).	Filed herewith.

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).	Filed herewith.

32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.

32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 [included in Exhibit 32.1].	Filed herewith.

101.1NS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL as contained in Exhibit 101)

	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)

	By:	/s/ Matthew Wolfson
		Matthew Wolfson
Date: June 14, 2024		Principal Executive Officer

Dated: June 14, 2024	By:	/s/ Matthew Wolfson
		Matthew Wolfson
		Chief Executive Officer, Chief Financial Officer