UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Mark One)

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

For the quarterly period ended September 30, 2022.

☐ 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
(State or Other Jurisdiction of
Incorporation) 5047
(Primary Standard Industrial
Classification Code Number) 82-2619815
(I.R.S. Employer
Identification No.)

16561 N. 92nd Street, Ste. 101
Scottsdale, AZ	85260
(Address of principal executive offices)	(Zip Code)

888-880-7888

(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 ☒ 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 ☒

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	☒	Smaller reporting company	☒
Emerging growth company	☒

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 ☒

On November 11, 2022, 172,884,530 shares of common stock were outstanding.

Explanatory Statement

This amendment deletes an erroneous duplicative disclosure under Part II, Item 2, Unregistered Sales of Securities, concerning a February 24, 2022, issuance to Robert L. Hymers, III.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	UNAUDITED FINANCIAL STATEMENTS:	3
	BALANCE SHEETS AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021	3
	STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021	4
	STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021	5
	STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021	7
	NOTES TO THE UNAUDITED FINANCIAL STATEMENTS	8
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
Item 4.	CONTROLS AND PROCEDURES	23
PART II. OTHER INFORMATION		24
Item 1.	LEGAL PROCEEDINGS	24
Item 1A.	RISK FACTORS	24
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	25
Item 3.	DEFAULTS UPON SENIOR SECURITIES	38
Item 4.	MINE SAFETY DISCLOSURE	39
Item 5.	OTHER INFORMATION	39
Item 6.	EXHIBITS	40
SIGNATURES		45

2

ITEM 1. FINANCIAL STATEMENTS

ELECTROMEDICAL TECHNOLOGIES, INC.

BALANCE SHEETS

(UNAUDITED)

	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	458,915	$	383,170
Accounts receivable		16,681		35,085
Inventories		117,550		218,510
Prepaid expenses and other current assets		101,194		38,002
Total current assets		694,340		674,767
Property and equipment, net		710,938		727,344
Total assets	$	1,405,278	$	1,402,111
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	277,085	$	214,785
Credit cards payable		43,031		11,283
Accrued expenses and other current liabilities		717,628		317,037
Customer deposits		25,840		—
Convertible promissory notes, net of discount of $592,869 and $723,166, respectively		1,384,327		811,687
Related party notes payable		—		57,875
Long term debt, current portion		31,119		29,502
Total current liabilities		2,479,030		1,442,169
Long-term liabilities:
Bank debt, net of current portion		497,079		518,849
Government debt, net of current portion		153,882		154,429
Other liabilities		11,045		9,167
Total liabilities		3,141,036		2,124,614
Commitments and contingencies (Note 9)		—		—
Stockholders’ deficit
Series A Preferred Stock, $.00001 par value, 1,000,000 shares authorized and 1,000,000 and 500,000 outstanding at September 30, 2022 and December 31, 2021, respectively		365,000		355,000
Series B Preferred Stock, $.00001 par value, 1 share authorized and 0 outstanding		—		—
Common stock, $.00001 par value, 999,000,000 and 250,000,000 shares authorized; 157,950,530 and 87,725,842 shares outstanding at September 30, 2022 and December 31, 2021, respectively		1,577		876
Additional paid-in-capital		21,867,892		20,804,333
Accumulated deficit		(23,970,227)		(21,882,712)
Total stockholders’ deficit		(1,735,758)		(722,503)
Total liabilities and stockholders’ deficit	$	1,405,278	$	1,402,111

The accompanying notes are an integral part of these financial statements

3

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	THREE MONTHS ENDED SEPT 30,				NINE MONTHS ENDED SEPT 30,
	2022		2021		2022		2021
Net sales	$	279,551	$	301,157	$	726,696	$	670,551
Cost of sales		58,008		66,733		170,984		158,065
Gross profit		221,543		234,424		555,712		512,486
Selling, general and administrative expenses		558,919		454,997		1,901,908		2,822,251
Loss from operations		(337,376)		(220,573)		(1,346,196)		(2,309,765)
Other income (expense)
Interest expense		(160,570)		(1,105,069)		(510,417)		(2,937,851)
Change in fair market value of derivative liabilities		—		(1,974,164)		—		(1,436,756)
Other income (expense)		—		—		—		(432)
Forgiveness of debt		—		—		—		50,082
Loss on extinguishment of debt		(460,000)		—		(781,800)		—
Total other expense		(620,570)		(3,079,233)		(1,292,217)		(4,324,957)
Net loss	$	(957,946)	$	(3,299,806)	$	(2,638,413)	$	(6,634,722)
Deemed dividend related to warrant resets		(19,780)		(8,396)		(83,161)		(3,748,695)
Net loss attributable to common stockholders	$	(977,726)	$	(3,308,202)	$	(2,721,574)	$	(10,383,417)
Weighted average shares outstanding - basic and diluted		146,993,139		54,356,854		119,799,025		39,670,934
Weighted average loss per share - basic and diluted	$	(0.01)	$	(0.06)	$	(0.02)	$	(0.26)

The accompanying notes are an integral part of these financial statements

4

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

(UNAUDITED)

											Total
	Preferred Stock			Common Stock			Paid in		Accumulated		Stockholders’
	Amount		Shares	Amount		Shares	Capital		Deficit		Deficit
Balance, December 31, 2021	$	355,000	500,000	$	876	87,725,842	$	20,804,333	$	(21,882,712)	$	(722,503)
Adoption of ASU2020-06		—	—		—	—		(1,013,414)		634,059		(379,355)
Shares issued for consulting services		—	—		106	10,600,000		356,794		—		356,900
Warrants issued in conjunction with convertible promissory notes		—	—		—	—		142,996		—		142,996
Warrants reset in conjunction with convertible promissory notes		—	—		—	—		63,381		(63,381)		—
Cashless warrant exercises		—	—		51	5,129,725		(51)		—		—
Issuance of common stock for cash		—	—		15	1,500,000		42,751		—		42,766
Stock-based compensation		—	—		—	—		4,703		—		4,703
Net loss		—	—		—	—		—		(1,144,536)		(1,144,536)
Balance, March 31, 2022	$	355,000	500,000	$	1,048	104,955,567	$	20,401,493	$	(22,456,570)	$	(1,699,029)
Shares issued for consulting services		—	—		30	3,000,000		44,970		—		45,000
Shares issued in conjunction with forbearance of convertible promissory notes		—	—		40	4,000,000		142,760		—		142,800
Convertible promissory notes payable settlement		—	—		267	26,734,801		668,103		—		668,370
Warrants issued in conjunction with debt extinguishment		—	—		—	—		65,000		—		65,000
Cashless warrant exercises		—	—		35	3,550,162		(35)		—		—
Net loss		—	—		—	—		—		(535,931)		(535,931)
Balance, June 30, 2022	$	355,000	500,000	$	1,420	142,240,530	$	21,322,291	$	(22,992,501)	$	(1,313,790)
Warrants issued in conjunction with convertible promissory notes		—	—		—	—		302,978		—		302,978
Warrants reset in conjunction with convertible promissory notes		—	—		—	—		19,780		(19,780)		—
Cashless warrant exercises		—	—		27	2,710,000		(27)		—		—
Convertible promissory note conversions		—	—		62	6,200,000		154,938		—		155,000
Shares issued for consulting services		—	—		68	6,800,000		67,932		—		68,000
Stock based compensation		10,000	500,000		—	—		—		—		10,000
Net loss		—	—		—	—		—		(957,946)		(957,946)
Balance, September 30, 2022	$	365,000	1,000,000	$	1,577	157,950,530	$	21,867,892	$	(23,970,227)	$	(1,735,758)

5

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

(UNAUDITED)

											Total
	Preferred Stock			Common Stock			Paid in		Accumulated		Stockholders’
	Amount		Shares	Amount		Shares	Capital		Deficit		Deficit
Balance, December 31, 2020	$	355,000	500,000	$	269	27,175,800	$	7,957,860	$	(9,631,732)	$	(1,318,603)
Shares issued for consulting services		—	—		11	1,084,120		693,815		—		693,826
Warrant issued in conjunction with convertible promissory note		—	—		—	—		420,096		—		420,096
Warrants reset in conjunction with convertible promissory notes		—	—		—	—		510,222		(510,222)		—
Conversion of convertible promissory notes		—	—		10	1,019,113		380,093		—		380,103
Stock-based compensation		—	—		11	1,100,000		604,890		—		604,901
Net loss		—	—		—	—		—		(2,560,384)		(2,560,384)
Balance, March 31, 2021	$	355,000	500,000		301	30,379,033	$	10,566,976	$	(12,702,338)	$	(1,780,061)
Warrants reset in conjunction with convertible promissory notes		—	—		—	—		3,230,077		(3,230,077)		—
Conversion of convertible promissory notes		—	—		122	12,161,575		974,192		—		974,314
Shares issued for consulting services		—	—		13	1,250,000		110,387		—		110,400
Net loss		—	—		—	—		—		(774,532)		(774,532)
Balance, June 30, 2021	$	355,000	500,000	$	436	43,790,608	$	14,881,632	$	(16,706,947)	$	(1,469,879)
Warrants reset in conjunction with convertible promissory notes		—	—		—	—		8,396		(8,396)		—
Conversion of convertible promissory notes		—	—		301	30,136,103		2,938,776		—		2,939,077
Shares issued in conjunction with warrant cancellation		—	—		10	1,000,000		(10)		—		—
Net loss		—	—		—	—		—		(3,299,806)		(3,299,806)
Balance, September 30, 2021	$	355,000	500,000	$	747	74,926,711	$	17,828,794	$	(20,015,149)	$	(1,830,608)

6

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

	2022		2021
Cash flows from operating activities:
Net loss	$	(2,638,413)	$	(6,634,722)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for allowance for doubtful accounts		—		3,495
Stock-based compensation expense		484,603		1,409,127
Depreciation and amortization		16,406		16,406
Forgiveness of debt		—		(49,783)
Loss on extinguishment of debt		781,800		—
Amortization of debt discount and day one derivative loss and warrant expense		367,257		2,785,844
Change in fair value of derivative liabilities- convertible promissory notes		—		1,436,756
Change in operating assets and liabilities:
Other		—		2,839
Accounts receivable		18,404		(16,732)
Inventories		100,960		(151,194)
Prepaid expenses and other current assets		(63,192)		261,924
Other assets		—		7,000
Accounts payable		62,300		(11,350)
Credit cards payable		31,748		(8,941)
Accrued expenses and other current liabilities		70,171		75,083
Customer deposits		25,840		(26,384)
Other liabilities		1,878		(5,441)
Net cash used in operating activities		(740,238)		(906,073)
Cash flows from financing activities:
Repayments on bank debt		(20,700)		(19,684)
Related party notes payable-net		(57,875)		(99,000)
Issuance of convertible promissory notes		1,545,140		937,500
Repayments on convertible promissory notes		(693,348)		—
Repayments on notes payable		—		(12,846)
Issuance of common stock for cash - net		42,766		—
Net cash provided by financing activities		815,983		805,970
Net (decrease) increase in cash and cash equivalents		75,745		(100,103)
Cash and cash equivalents, beginning of period		383,170		264,913
Cash and cash equivalents, end of period	$	458,915	$	164,810
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	89,079	$	29,625
Income taxes	$	—	$	—
Non-cash investing and financing activities:
January 1, 2022 adoption of ASU2020-06	$	379,355	$	—
Warrants, common stock and beneficial conversion feature issued in conjunction with convertible promissory notes	$	653,774	$	420,096
Derivative liabilities issued in conjunction with convertible promissory notes	$	—	$	1,197,607
Conversion of convertible promissory notes, derivative liabilities and accrued interest into shares of common stock	$	823,370	$	4,290,655

7

ELECTROMEDICAL TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1.ORGANIZATION AND NATURE OF BUSINESS

ElectroMedical 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. 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, 2021. The results of operations for the nine months ended September 30, 2022 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 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 $20.2 million of accumulated net losses. In addition, during the nine months ended September 30, 2022, the Company used $740,238 in operations, and as of September 30, 2022, the Company had a working capital deficit of $1,784,690. 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 12 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 Company 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.

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 of September 30, 2022.

8