Electromedical Technologies Announces 2021 Annual Financial Results
SCOTTSDALE, Ariz., April 7, 2022 /PRNewswire/ -- 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. | ||||||
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 | 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 | 355,000 | 355,000 | ||||
Series B Preferred Stock, 1 share authorized and 0 | — | — | ||||
Common stock, $.00001 par value, 125,000,000 shares | 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. | ||||||
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. | ||||||
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 | ||||||
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 | 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 | $ | 1,095,096 | $ | 922,438 | ||
Derivative liabilities issued in conjunction with convertible | $ | 1,197,607 | $ | 903,265 | ||
Conversion of convertible promissory note and accrued interest | $ | 5,223,235 | $ | 118,800 | ||
Conversion of KISS liability-related party into common stock | $ | — | $ | 1,452,545 | ||
SOURCE Electromedical Technologies, Inc.
Share this article