Electromedical Technologies Reports Significant Financial Challenges, Declining Revenues, and Net Losses in Latest Quarter

Electromedical Technologies, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company, which specializes in portable bioelectronic devices for pain relief, experienced a substantial decline in revenue, with net sales for the three months ending September 30, 2024, totaling $42.5 thousand, a decrease of 87% from $323.6 thousand in the same period of 2023. For the nine-month period, net sales were $570.4 thousand, down 43% from $997.2 thousand year-over-year.

The gross profit for the third quarter also fell sharply to $30.6 thousand, compared to $251.2 thousand in the prior year, reflecting a gross margin of 72% versus 78% in 2023. The company reported a loss from operations of $(381.0) thousand for the quarter, worsening from $(239.0) thousand a year earlier. The net loss for the third quarter was $(724.6) thousand, compared to $(376.7) thousand in the same quarter of 2023. For the nine-month period, the net loss improved to $(1.3) million from $(2.3) million in the previous year, indicating a reduction in operational losses.

Electromedical's total current assets decreased to $305.4 thousand as of September 30, 2024, down from $449.2 thousand at the end of 2023. The company reported a working capital deficit of $3.8 million and a total stockholders’ deficit of $(4.0) million, compared to $(2.9) million at the end of 2023. Cash and cash equivalents also saw a significant decline, falling to $34.8 thousand from $87.7 thousand.

Strategically, the company has focused on its new product, the Wellness Pro Infinity, which has garnered customer deposits totaling $764.1 thousand as of September 30, 2024. However, the company is facing substantial liquidity challenges, with plans to secure additional funding through debt and equity placements to achieve positive cash flows.

Operationally, Electromedical Technologies has made efforts to reduce expenses, with selling, general, and administrative expenses decreasing by approximately 16% to $411.7 thousand in the third quarter. This reduction was primarily due to lower payroll-related costs and other operating expenses. The company is also in default on a matured convertible promissory note, with principal and interest due totaling $144.1 thousand.

Overall, Electromedical Technologies continues to navigate a challenging financial landscape, marked by declining revenues and significant operational losses, while attempting to stabilize its financial position through strategic product initiatives and cost management.