Electromedical Technologies Announces 2021 Annual Financial Results

 

SCOTTSDALE, AZ -- April 7, 2022 -- InvestorsHub NewsWire -- Electromedical Technologies, Inc. (OTCQB: EMED) ("Electromedical" or the "Company"), a pioneer in the development and production of bioelectronic devices designed to relieve chronic, intractable, and acute pain by using frequencies and electro-modulation, is pleased to announce its results for the year ended December 31, 2021.

"We are very pleased with our 2021 operating results, which featured strong topline growth, better margins, and key investments that have started to bear fruit as we plan to scale up in 2022 and beyond," noted Matthew Wolfson, Founder and CEO of Electromedical. "Our newly implemented sales and marketing initiatives are starting to pay off, as indicated by improved growth in both unit sales volume and revenue. We will continue to emphasize these initiatives going forward to provide an enhanced foundation for our outreach efforts, driving potential repeat orders from partners and distributors."

Wolfson continued, "We also continue to invest toward our upcoming WellnessProPlus POD launch. We have made significant progress on the development side, and we look forward to presenting a more comprehensive update soon as we approach key milestones ahead."
 

Financial Performance Highlights for the Twelve Months Ended Dec 31, 2021

  • Revenue increased $169,404 to $907,362, up 23% year over year primarily due to unit sales volume growth.
  • Gross margin increased to 78% in 2021 from 74% in 2020 due to efficiency gains in shipping and distribution costs.
  • Selling, general, and administrative expenses increased 21% year over year to $4.5M due primarily to stock-based compensation, progress in the Company's product development efforts, and payroll related items.
  • Incurred approximately $1.7M in additional convertible debt while lenders converted principal totaling $1.7M plus accrued interest into 49,334,051 shares of common stock.
  • Working capital deficit improved to ($767,402) from ($1,371,966) at the end of 2020.


Operational Highlights for the Twelve Months Ended Dec 31, 2021

  • Achieved critical development milestones for WellnessProPlus POD prototype. Now in functionality testing stage. Completion of related milestones in 2022 has the potential to drive results.
  • Onboarded 110 new independent sales representatives.
  • Completed online medical representative training program to improve and expedite the training process
  • Strengthened financial position by obtaining an equity line capable of providing necessary capital to drive product R&D, with terms that are more favorable than past financings.


"This is an extremely exciting time for the Company," added Wolfson. "Last year was critical to laying a foundation for future growth through key investments in personnel and product development. Looking ahead, our progress toward the market for our POD design is our most important objective. However, we are also driving toward gains in governance and logistics as we plan for operations on an expanding scale."

 

About Electromedical Technologies
Headquartered in Scottsdale, Arizona, Electromedical Technologies, Inc. is a commercial stage, FDA cleared, bioelectronic medical device manufacturing company initially focused on the treatment of various chronic, acute, intractable, and post-operative pain conditions. Through University collaboration agreements, the Company is working to develop a comprehensive research program in defining the effects of electro-modulation on the human body. By studying the impacts of electrical fields in cell signaling and effects on virus assembly and immune responses, the Company's goal is to reduce pain and improve overall human wellbeing. The Company's current FDA cleared product indications are for chronic acute post traumatic and post-operative, intractable pain relief. 

For more information, please visit www.electromedtech.com.

Note: Nonhuman preliminary studies that we are planning to start in the near future and their applications are not related to our current product in any way and are currently not cleared in the US.

 

Safe Harbor Statement
This release contains forward-looking statements that are based upon current expectations or beliefs, as well as a number of assumptions about future events. Although we believe that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, we can give no assurance or guarantee that such expectations and assumptions will prove to have been correct. Forward-looking statements are generally identifiable by the use of words like "may," "will," "should," "could," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including but not limited to: adverse economic conditions, competition, adverse federal, state and local government regulation, international governmental regulation, inadequate capital, inability to carry out research, development and commercialization plans, loss or retirement of key executives and other specific risks. To the extent that statements in this press release are not strictly historical, including statements as to revenue projections, business strategy, outlook, objectives, future milestones, plans, intentions, goals, future financial conditions, events conditioned on stockholder or other approval, or otherwise as to future events, such statements are forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this release are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements made.

 

Corporate Contact:
Electromedical Technologies, Inc.
Hanover International
Tel: 1.888.880.7888
Email: ir@electromedtech.com
https://electromedtech.com


Public Relations:
EDM Media, LLC
https://edm.media

 

ELECTROMEDICAL TECHNOLOGIES, INC.

BALANCE SHEETS

DECEMBER 31,

 

 

 

 

 

 

 

 

    

2021

    

2020

ASSETS

 

 

 

 

 

 

Current assets:

 

 

  

 

 

  

Cash and cash equivalents

 

$

 383,170

 

$

 264,913

Accounts receivable

 

 

 35,085

 

 

 17,694

Inventories

 

 

 218,510

 

 

 78,712

Prepaid expenses and other current assets

 

 

 38,002

 

 

 285,860

 Total current assets

 

 

 674,767

 

 

 647,179

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 20,601

Property and equipment, net

 

 

 727,344

 

 

 749,219

 Total assets

 

$

 1,402,111

 

$

 1,416,999

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

  

 

 

  

 

 

 

 

 

 

 

Current liabilities:

 

 

  

 

 

  

Accounts payable

 

$

 214,785

 

$

 262,614

Credit cards payable

 

 

 11,283

 

 

 23,710

Accrued expenses and other current liabilities

 

 

 317,037

 

 

 201,814

Customer deposits

 

 

 

 

 

 28,651

Convertible promissory notes, net of discount of $723,166 and $1,277,255, respectively

 

 

 811,687

 

 

 257,398

Related party notes payable

 

 

 57,875

 

 

 332,500

PPP loan

 

 

 

 

 

 39,500

Notes payable

 

 

 

 

 

 12,846

Long term debt, current portion

 

 

 29,502

 

 

 28,260

Derivative liabilities- convertible promissory notes

 

 

 

 

 

 831,852

 Total current liabilities

 

 

 1,442,169

 

 

 2,019,145

 

 

 

 

 

 

 

Long-term liabilities:

 

 

  

 

 

  

Bank debt, net of current portion

 

 

 518,849

 

 

 546,552

Government debt, net of current portion

 

 

 154,429

 

 

 154,302

Other liabilities

 

 

 9,167

 

 

 15,603

 Total liabilities

 

 

 2,124,614

 

 

 2,735,602

 

 

 

 

 

 

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

  

 

 

  

Series A Preferred Stock, 1,000,000 shares authorized and 500,000 outstanding

 

 

 355,000

 

 

 355,000

Series B Preferred Stock, 1 share authorized and 0 outstanding

 

 

 

 

 

 

Common stock, $.00001 par value, 125,000,000 shares authorized; 87,725,842 and 27,175,800 shares outstanding at December 31, 2021 and 2020, respectively

 

 

 876

 

 

 269

Additional paid-in-capital

 

 

 20,804,333

 

 

 7,957,860

Accumulated deficit

 

 

 (21,882,712)

 

 

 (9,631,732)

Total stockholders' deficit

 

 

 (722,503)

 

 

 (1,318,603)

Total liabilities and stockholders' deficit

 

$

 1,402,111

 

$

 1,416,999

 

 

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

THE YEARS ENDED DECEMBER 31,

 

 

 

 

 

 

 

 

    

2021

    

2020

 

 

 

 

 

 

 

Net sales

 

$

 907,362

 

$

 737,958

 

 

 

 

 

 

 

Cost of sales

 

 

 199,234

 

 

 194,384

 

 

 

 

 

 

 

Gross profit

 

 

 708,128

 

 

 543,574

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 4,508,391

 

 

 3,710,262

 

 

 

 

 

 

 

Loss from operations

 

 

 (3,800,263)

 

 

 (3,166,688)

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

Interest expense

 

 

 (3,313,852)

 

 

 (769,591)

Change in excess fair value of KISS liability – related party

 

 

 

 

 (7,784)

Change in fair market value of derivative liabilities

 

 

 (1,415,685)

 

 

 71,413

Other income (expense)

 

 

 (432)

 

 

 926

Forgiveness of debt

 

 

 50,083

 

 

 

Total other expense

 

 

 (4,679,886)

 

 

 (705,036)

 

 

 

 

 

 

 

Net loss

 

$

 (8,480,149)

 

$

 (3,871,724)

Deemed dividend related to warrant resets

 

 

 (3,770,831)

 

 

 (507,307)

Net loss attributable to common stockholders

 

 

 (12,250,980)

 

 

 (4,379,031)

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

 

 50,992,414

 

 

 22,300,579

Weighted average loss per share - basic and diluted

 

$

 (0.24)

 

$

 (0.20)

 

 

 

 

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,

 

 

 

 

 

 

 

 

    

2021

    

2020

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

  

 

 

  

Net loss

 

$

 (8,480,149)

 

$

 (3,871,724)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

  

Provision for allowance for doubtful accounts

 

 

 

 

 

 3,765

Stock-based compensation expense

 

 

 2,630,144

 

 

 2,222,856

Depreciation and amortization

 

 

 21,875

 

 

 21,875

Forgiveness of debt

 

 

 (50,083)

 

 

 

Change in excess fair value of KISS liability- related party

 

 

 

 

 

 7,784

Amortization of debt discount and day 1 derivative loss

 

 

 3,036,792

 

 

 684,901

Change in fair value of derivative liabilities- convertible promissory notes

 

 

 1,415,685

 

 

 (71,413)

Other

 

 

 2,839

 

 

 

Change in operating assets and liabilities:

 

 

 

 

 

  

Accounts receivable

 

 

 (17,391)

 

 

 (5,792)

Inventories

 

 

 (139,798)

 

 

 (54,018)

Prepaid expenses and other current assets

 

 

 285,860

 

 

 (205,029)

Other assets

 

 

 (17,401)

 

 

 4,979

Accounts payable

 

 

 (40,529)

 

 

 11,452

Credit cards payable

 

 

 (12,427)

 

 

 (7,300)

Accrued expenses and other current liabilities

 

 

 205,982

 

 

 (71,824)

Customer deposits

 

 

 (28,651)

 

 

 (11,469)

Other liabilities

 

 

 (6,436)

 

 

 4,297

 Net cash used in operating activities

 

 

 (1,193,688)

 

 

 (1,336,660)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

  

 

 

  

Short-term financing

 

 

 

 

 

 (40,307)

Proceeds from PPP loan

 

 

 

 

 

 39,500

Proceeds from government debt

 

 

 

 

 

 155,900

Repayments on bank debt

 

 

 (26,334)

 

 

 (18,787)

Related party notes payable-net

 

 

 (158,875)

 

 

 (500)

Issuance of convertible promissory notes

 

 

 1,510,000

 

 

 1,458,200

Repayments on notes payable

 

 

 (12,846)

 

 

 (6,000)

Issuance of common stock for cash- net

 

 

 

 

 

 13,567

 Net cash provided by financing activities

 

 

 1,311,945

 

 

 1,601,573

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

 118,257

 

 

 264,913

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

 

 264,913

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

 

$

 383,170

 

$

 264,913

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

  

Cash paid during the year for:

 

 

 

 

 

  

Interest

 

$

 154,081

 

$

 48,660

Income taxes

 

$

 

 

$

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

  

 

 

  

 

 

 

 

 

 

 

Inventory deposits converted to related party notes payable

 

$

 

 

$

 15,000

Shares issued in conjunction with vendor settlement

 

$

 

 

$

 7,352

Warrants, common stock and beneficial conversion feature issued in conjunction with convertible promissory notes

 

$

 1,095,096

 

$

 922,438

Derivative liabilities issued in conjunction with convertible promissory notes

 

$

 1,197,607

 

$

 903,265

Conversion of convertible promissory note and accrued interest into shares of common stock

 

$

 5,223,235

 

$

 118,800

Conversion of KISS liability-related party into common stock

 

$

 

 

$

 1,452,545

 

 

 

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