10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2024.

☐ 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.)

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

888-880-7888

(Registrant’s telephone number, including area code)

Securities Registered pursuant to Section 12(g) of the Act

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

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 June 13, 2024, 566,111,930 shares of common stock were outstanding.

TABLE OF CONTENTS

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

2

ITEM 1. FINANCIAL STATEMENTS

ELECTROMEDICAL TECHNOLOGIES, INC.

BALANCE SHEETS

(UNAUDITED)

	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

The accompanying notes are an integral part of these financial statements

3

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

	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)

The accompanying notes are an integral part of these financial statements

4

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2024

(UNAUDITED)

	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)

The accompanying notes are an integral part of these financial statements

5

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2023

(UNAUDITED)

														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)

6

ELECTROMEDICAL TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31,

(UNAUDITED)

	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

The accompanying notes are an integral part of these financial statements

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. We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation. 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, 2023. The results of operations for the three months ended March 31, 2024, 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 $24.6 million of accumulated net losses. In addition, during the three months ended March 31, 2024, the Company used $158,361 in operations and had a working capital deficit of $3,726,900. These factors, among others, 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 twelve 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 entity 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 at March 31, 2024.

8

Revenue Recognition

Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities, allowance for estimated returns, chargebacks, and markdowns based upon management’s estimates and the Company’s historical experience. The Company’s liability for sales return refunds is recognized within other current liabilities, and an asset for the value of inventory which is expected to be returned is recognized within other current assets on the balance sheets. The Company generally allows a 30 day right of return to its customers. As of both March 31, 2024 and December 31, 2023 the sales returns allowance was $6,990.

Certain larger customers pay in advance for future shipments. These advance payments totaled $185,275 and $197,325 at March 31, 2024 and December 31, 2023, respectively, and are recorded as customer deposits in the accompanying balance sheets. Revenue related to these advance payments is recognized upon shipment to the distributor or the end-customer.

At the completion of the initial three-year warranty, the Company sells extended warranties for periods ranging from one to three years. Revenue is recognized on a straight-line basis over the term of the contract. At March 31, 2024 and December 31, 2023, deferred revenue of $17,424 and $20,787 is recorded, respectively, in current and long-term liabilities in the accompanying balance sheets, in connection with these extended warranties.

Financial Instruments and Concentrations of Business and Credit Risk

The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk.

The Company’s accounts receivable, which are unsecured, expose the Company to credit risks such as collectability and business risks such as customer concentrations. The Company mitigates credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic review of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. The Company mitigates business risks by attempting to diversify its customer base.

Significant customer sales as a percentage of total sales are as follows:

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Customer A	34.8	%	18.8	%
Customer B	14.9	%	10.2	%
Customer F	11.2	%	—

Amounts due these customers totaled $14,142 and $12,442 at March 31, 2024 and December 31, 2023, respectively for commissions and reimbursements. Amounts due from these customers, totaled $297 and $594 at March 31, 2024 and December 31, 2023, respectively. Customer deposits on hand from these customers totaled $58,900 and $70,950 at March 31, 2024 and December 31, 2023, respectively. The loss of these customers would have a significant impact on the operations and cash flows of the Company.

9

The Company’s supplier concentrations expose the Company to business risks, which the Company mitigates by attempting to diversify its supply chain. Significant supplier purchases as a percentage of total inventory purchases are as follows:

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Supplier A	69.9	%	64.0	%
Supplier D	—		25.5	%
Supplier F	17.8	%	—

There were no amounts outstanding due these suppliers at March 31, 2024 and December 31, 2023. The loss of key vendors may have a significant impact on the operations and cash flows of the Company.

The estimated fair value of financial instruments has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is often required to interpret market data used to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.

Disclosure of Fair Value

The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below:

● Cash and cash equivalents are carried at cost, which approximates fair value.

● The carrying amounts of receivables approximate fair value due to their short-term maturities.

● The carrying amounts of payables approximate fair value due to their short-term maturities.

● Derivative liabilities are adjusted to fair value utilizing the Lattice method

Asset and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability

Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

10

The Company’s convertible promissory notes contain variable conversion provisions upon default, Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and shares to be issued were recorded as derivative liabilities on the default dates.

The following table presents changes during the three months ended March 31, 2024 in Level 3 liabilities measured at fair value on a recurring basis:

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

The levels of the fair value hierarchy into which the Company’s assets and liabilities fall as of March 31, 2024, are as follows:

	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

Inventories

Inventories are stated at the lower of cost or market. Cost is determined based on the first-in, first-out cost flow assumption (“FIFO”) while market is determined based upon the estimated net realizable value less an allowance for selling and distribution expenses and a normal gross profit. The Company evaluates the need for inventory reserves associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis. As of March 31, 2024 and December 31, 2023, the Company believes there are no excess and obsolete inventories and accordingly, did not record an inventory reserve. Inventories consist of purchased finished goods.

Sales Taxes

Sales taxes for the three-month periods ended March 31, 2024 and 2023, were recorded on a net basis. Included in accrued expenses at both March 31, 2024 and December 31, 2023 is approximately $61,000 related to sales taxes.

Warranty

The Company warranties the sale of most of its products and records an accrual for estimated future claims. The standard warranty is typically for a period of three years. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The Company recorded a liability as of March 31, 2024 and December 31,2023 of $15,595 and $16,642, respectively. The expense is included in cost of sales in the statements of operations and within accrued expenses on the accompanying balance sheets.

Lease Commitment

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Lease expense for variable lease components are recognized when the obligation is probable. Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company’s lease, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments.

11

The lease term for the Company’s lease includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. The Option for the lease renewal has been excluded from the lease term (and lease liability) for the Company’s lease as the reasonably certain threshold is not met.

Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain.

Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company’s statement of operations in the same line as expense arising from fixed lease payments. As of March 31, 2024, management determined that there were no variable lease costs.

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of March 31, 2024 and December 31, 2023, diluted net loss per share is the same as basic net loss per share for each period.

Conversion of outstanding warrants, certain accrued liabilities and convertible promissory notes at March 31, 2024 may result in an estimated 1,690,762,268 additional shares of common stock outstanding. At March 31, 2024, there are 1,999,000,000 common shares authorized and 486,482,787 outstanding. Management has agreed to amend its shares outstanding to meet the future requirements resulting from any of the above conversions.

COVID-19

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, COVID-19 has had an adverse effect on our business, including our supply chains and distribution systems. While we are taking diligent steps to mitigate disruptions to our supply chain, we are unable to predict the extent or nature of these impacts at this time to our future financial condition and results of operations.

Recently Issued Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

12

NOTE 3.PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of:

	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

On March 15, 2023, the Company entered into an agreement to sell the building of its principal offices at a purchase price of $2 million and net proceeds of $1,363,818, upon repayment in full of the Company’s bank debt. The sale resulted in a realized gain of $1,193,676, which has been recorded as other income on the accompanying statement of operations.

Depreciation and amortization expense related to property and equipment was $0 and $4,557 the three months ended March 31, 2024 and 2023, respectively. Depreciation and amortization are included in selling, general and administrative expenses on the accompanying statements of operations.

NOTE 4.NOTES PAYABLE

Convertible Promissory Notes

The aggregate of convertible promissory notes is as follows:

	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

The Net Notes balance at March 31, 2024 is comprised of the following:

	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

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The Net Notes balance at December 31, 2023 is comprised of the following:

	Principal		Debt Discount		Net
Pre 2020	$	50,000	$	—	$	50,000
October 2021		73,336		—		73,336
February 2022		44,882		—		44,882
March 2022		305,500		—		305,500
August 2022		105,500		—		105,500
September 2022		814,383		—		814,383
	$	1,393,601	$	—	$	1,393,601

In March, 2024, the Company entered into a settlement agreement with one of its lenders for amounts in default under the October 2021, February 2022 and September 2022 convertible promissory notes. The settlement agreements have been accounted for as a debt modification. (See Note 6). Principal of $932,601 and accrued interest of $128,763 are covered by the agreement and subject to the following settlement terms:

● Any and all outstanding warrants are to be cancelled without consideration.

● The maturity date has been extended to September 25, 2025.

● Interest rate is capped at 12% per annum.

● Default penalties accrued up to the settlement date are no longer due and from the effective date forward are amended to 115% from 125%. Accrued default penalties totaling $251,000 and outstanding at December 31, 2023 have been reversed and recorded as other income in the Company’s statement of operations for the three months ended March 31, 2024.

● All payments will be applied first to outstanding principal and will include the note holders’ pro-rata share of $600 per unit, from futures sales of the Company’s Wellness ProPlus Infinity units.

● Conversions of outstanding principal are limited to $30,000 per calendar month through December 31, 2024 and may be waived under certain conditions and after such date.

As of March 31, 2024, and separately, the Company is in default of two matured convertible promissory notes, including defaults resulting from the Company’s sale of its real property on March 15, 2023, issued to two lenders on March 10, 2022, and August 8, 2022, with principal and interest due in the amounts of $342,070 and $145,354, respectively. The convertible notes included a cross-default and a cross-default provision which required the Company to remit payment of principal, accrued interest, default interest, and legal fees, multiplied by 125% and 150%, respectively. The amount of $158,000 in default penalties has been accrued and is recorded in the Company’s balance sheet as of March 31,2024, for these lenders. On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. The Company is in negotiations with the other lender to reform the note in default. See Note 11.

In March 2024, the Company borrowed $149,500 in conjunction with an unsecured promissory note with an investor. Proceeds of $130,000 include an original issue discount of $19,500. An up-front interest charge at twelve percent (12%) of the principal will be added to the principal balance for an outstanding balance of $167,440 to be paid in nine monthly payments of $18,604 beginning April 15, 2024. The note matures on December 15, 2024. At any time following an event of default, the investor shall have the right, to convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of common stock. The note may be converted at a 35% discount to trading prices during the 10 days prior to conversion.

NOTE 5.LONG-TERM DEBT

Government Debt

In June 2020, the Company received a $150,000 economic injury disaster loan (“EIDL”). The loan accrues interest at a rate of 3.75% annually and is collateralized by all personal property and intangible assets of the Company. The loan has a 30-month moratorium on

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payments, after which monthly principal and interest payments of $731 will be made through the maturity date of June 2050. Interest expense totaled $1,402 and $1,387 for the three months ended March 31, 2024 and 2023, respectively.

NOTE 6.DERIVATIVE LIABILITIES

The Company’s convertible promissory notes contain variable conversion provisions upon default, Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and shares to be issued were recorded as derivative liabilities on the default dates. In March,2024, the Company entered into a settlement agreement with one of its lenders for amounts in default under the October 2021, February 2022 and September 2022 convertible promissory notes. The settlement agreement resulted in a net increase in derivative liabilities totaling $213,957 which has been recorded as a loss on derivative liabilities in the Company’s statement of operations.

Based on the various convertible promissory notes described in Note 4, the fair value of applicable derivative liabilities on notes and the change in fair value of derivative liabilities are as follows for the three months ended March 31, 2024:

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

The fair value of the derivative liabilities – convertible promissory notes is estimated using a Lattice pricing model with the following assumptions:

	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	%

NOTE 7.RELATED PARTY TRANSACTIONS

In January 2023, the Company issued one share of Series B Preferred stock to the Company’s CEO. Compensation expense of $400,000 has been recorded as selling, general and administrative expense in the accompanying statement of operations. The fair value of the Series B Preferred stock was calculated in accordance with fair value defined by the Financial Accounting Standards Board (“FASB”) in ASC 820 – Fair Value Measurements and Disclosures (“ASC 820”) based on the market approach.

The Company paid the Company’s CEO a bonus of $0 and $10,000 during the three months ended March 31,2024 and 2023, respectively.

Effective July 15, 2023, the Company’s board of directors executed a resolution whereby the CEO’s salary shall be reduced from $365,000 to $265,000 per year, with unpaid sums being accrued on the books of the Company and subject to an option in favor of the CEO to elect to convert the unpaid sums into shares of Company common stock. Accrued salary totaling $64,154 has been recorded as of March 31, 2024 and may be converted at any time into shares of the Company’s common stock at a discount of 25% of the market value on the date of conversion.

In February 2023, the Company entered into a one-year consulting agreement under the Company’s Employee and Consultant Stock Ownership Plan, with an advisor and director in exchange for compensation of 35 million shares of common stock at a basis of $0.01 per share. The value of the compensation totaling $315,000 has been recorded in selling, general and administrative expenses in the Company’s statement of operations. The fair market value of the shares was determined based on the Company’s closing price on the date of issuance. The agreement includes a registration requirement. Compensation totaling $5,000 per month has been recorded for the advisor as board of director fees for the three months ended March 31, 2023.On July 1, 2023, the advisor resigned from the board.

Compensation totaling $5,000 per month has been recorded for an employee as board of director fees for the three -month period ended March 31, 2024.

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NOTE 8.STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2024, holders of convertible promissory notes converted $23,661 of principal into 23,196,579 shares of common stock at $0.00102 per share.

NOTE 9.STOCK OPTIONS AND WARRANTS

Stock Options

In 2017, the Company’s Board of Directors approved the 2017 Employee and Consultant Stock Ownership Plan, (the “Plan”). The Plan provides that the Board of Directors may grant stock units, incentive stock options and non-statutory stock options to officers, key employees and certain consultants and advisors to the Company up to a maximum of 50,000,000 shares. Stock options granted under the Plan have ten-year terms with vesting terms to be determined by the administrator of the Plan. Stock unit grant terms will be set by the administrator and at the discretion of the administrator, be settled in cash, shares, or a combination of both. All options have expired.

No options were granted during the three months ended March 31, 2024.

Warrants

As of March 31, 2024, 160,500,000 outstanding warrants were cancelled without consideration in conjunction with a settlement agreement. See Note 4.

The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at March 31, 2024:

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

The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at December 31, 2023:

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

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NOTE 10.COMMITMENTS AND CONTINGENCIES

Commitments

The Company has entered into a product development agreement with remaining payments totaling approximately $300,000. The agreement requires that approximately $150,000 of the payments be made in conjunction with certain development milestones which the Company expects to meet over the next twelve months. The remainder is to be paid in conjunction with future new product sales.

In September 2023, the Company entered into an operating lease for its office location. The lease provides for a base rent of $5,280 per month through September 30, 2026. The lease may be renewed for one three-year period. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 12.4% within the calculation. Rent expense totaled $16,236 under the current lease during the three months ended March 31, 2024.

The following outlines the maturities of our operating lease liabilities for the periods ending March 31,

2025	$	65,757
2026	$	67,730
2027	$	34,366
Total lease payments	$	167,853
Less imputed interest	$	(24,420)
Total	$	143,433

Contingencies

The Company is subject to various loss contingencies and assessments arising in the normal course of the business, some of which relate to litigation, claims, property taxes, and sales and use tax or goods and services tax assessments. The Company considers the likelihood of the loss or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies and assessments. An estimated loss contingency or assessment is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Management regularly evaluates current information available to them to determine whether such accruals should be adjusted. Currently, there are no pending court actions, or arbitration claims filed against the company that may reasonably be determined, as of the date of this filing, to exceed $5,000 individually or in the aggregate.

As of March 31, 2024, the Company is in default of two matured convertible promissory notes, including defaults resulting from the Company’s sale of its real property on March 15, 2023, issued to two lenders on March 10, 2022, and August 8, 2022, with principal and interest due in the amounts of $342,070 and $145,354, respectively. The convertible notes included a cross-default and a cross-default provision which required the Company to remit payment of principal, accrued interest, default interest, and legal fees, multiplied by 125% and 150%, respectively. The amount of $158,000 in default penalties has been accrued and recorded in the Company’s balance sheet as of March 31,2024, for these lenders. On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. The Company is in negotiations with the other lender to reform the note in default. See Note 11.

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NOTE 11.SUBSEQUENT EVENTS

The Company has evaluated subsequent events that have occurred through the date of this filing and determined that there were no subsequent events or transactions that required recognition or disclosure in the financial statements, except as disclosed below.

On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. Principal of $305,501 and accrued interest of $36,971 are covered by the agreement and subject to the following settlement terms:

● Any and all outstanding warrants are to be cancelled without consideration.

● The maturity date has been extended to September 25, 2025.

● Interest rate is capped at 12% per annum.

● Default penalties accrued up to the settlement date are no longer due and from the effective date forward are amended to 115% from 125%.

● All payments will be applied first to outstanding principal and will include the note holders’ pro-rata share of $400 per unit, from futures sales of the Company’s Wellness ProPlus Infinity units.

● Conversions of outstanding principal are limited to $30,000 per calendar month through December 31, 2024, and may be waived under certain conditions and after such date.

As of June 15, 2024, holders of convertible promissory notes converted $81,222 of principal into 79,629,143 shares of common stock at $0.00102 per share.

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

The statements contained in this report that are not statements of historical fact, including without limitation, statements containing the words “believes,” “expects,” “anticipates” and similar words, constitute forward-looking statements that are subject to a number of risks and uncertainties. From time to time, we may make other forward-looking statements. Investors are cautioned that such forward-looking statements are subject to an inherent risk that actual results may materially differ as a result of many factors, including the risks discussed from time to time in this report, including the risks described under “Risk Factors” in any filings we have made with the SEC.

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with US 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.

Background

The Company was formed in Nevada on August 30, 2002 as IntelSource Group, Inc. and began operations in 2003. In 2007, IntelSource Group, Inc. merged with ElectroMedical Technologies, LLC. The Company began acting as Electro Medical Technologies, LLC, an Arizona limited liability company on November 9, 2010, after the merger with ElectroMedical Technologies, LLC, a Nevada Company. The Company converted to a corporation in the State of Delaware on August 23, 2017.

Electromedical Technologies is a bioelectronics manufacturing and marketing company. We offer U.S. Food and Drug Administration (FDA) cleared medical devices for pain management.

Bioelectronics is a developing field of “electronic” medicine, which uses electrical impulses over the body’s neural circuitry to try to alleviate pain, without drugs. The human body is controlled by electrical signals sent through the nervous system, which can become distorted after accidents or as a result of disease. The field of bioelectronic medicine aims to safely correct irregularities in the nervous system by modifying the electrical language of the body related to pain relief.

Our mission is to improve global wellness for people suffering from various painful conditions by relieving chronic and acute pain using energy, frequency and vibration as an alternative to pharmaceuticals; and one day, read and modifies electrical signals passing along nerves in the body, to restore long-term health.

Additionally, we have a corporate goal to offer the public effective alternatives to addictive pain -relieving drugs, such as opioids. According to the Society of Actuaries, opioid overdose deaths are now the single largest factor slowing the growth in U.S. life expectancy and has led to stagnation or decreases in life expectancy three years in a row for the first time since 1915–1918, when the country was facing World War I and the Spanish flu pandemic. The U.S. Centers of Disease Control and Prevention (CDC) has reported that, from 1999 through 2017, nearly 400,000 have died from overdoses from prescription or illicit opioids. It is our aim to offer effective alternatives to pain management.

Results of Operations

Overview and Financial Condition

Going Concern

Since inception, the Company has incurred approximately $24.6 million of accumulated net losses. In addition, during the three months ended March 31, 2024, the Company used $158,361 in operations and had a working capital deficit of $3,726,900. 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 twelve 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.

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As a result, there is significant uncertainty whether the entity 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 at March 31, 2024.

While priority is on generating cash from operations through the sale of the Company’s products, management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity and/or debt securities, which may not be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and our operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us and/or our shareholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing shareholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the current holders of our shares of Common Stock.

The following table sets forth the unaudited results of our operations for the three months ended March 31,

	2024		2023
Net Sales	$	290,244	$	378,646
Cost of goods sold		72,857		87,696
Gross profit		217,387		290,950
Operating Expenses		372,263		1,552,488
Loss from operations		(154.876)		(1,261,538)
Other income (expense)		(681,398)		805,475
Net Loss	$	(836,274)	$	(456,063)

Operating Results

January 1,2024 through March 31,2024 Compared to January 1,2023 through March 31, 2023

Our sales totaled $290,244 for the three months ended March 31,2024 and $378,646 for the three months ended March 31, 2023, a decrease of $88,402 or 23%. The decrease is primarily related to a decrease in units sold, as the Company winds down the sale of its current product leading up to the introduction of the new Wellness Pro Infinity. In June 2024, the Company initiated its exchange program, allowing current customers to submit deposits for the new Wellness Pro Infinity.

Cost of sales and gross margins for the three months ended March 31, 2024, and for the three months ended March 31, 2023 were $72,857 and 75% and $87,696 and 77%, respectively. Our cost of sales consists of the cost of materials and distribution expenses. Cost of sales and gross margins are affected by product mix as well as the mix in the level of sales between commissioned agents and distributors.

The following table sets forth the operating expenses for the three months ended March 31:

	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)

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The following table sets forth the stock- based compensation expense included in the above operating expenses for the three months ended March 31:

	2024		2023		Change
Payroll related		—		400,000		(400,000)
Consulting and professional fees		—		315,000		(315,000)
	$	—	$	765,000	$	(715,000)

Selling, general and administrative expenses consist primarily of payroll related expenses, commissions, consulting and professional fees, sales and marketing, research and development and other operating expenses. Selling, general and administrative expenses totaled $372,263 for the three months ended March 31,2024 and $1,552,488 for the three months ended March 31,2023, a decrease of $1,180,225 or about 76%. The change is primarily due to decreases in payroll related expenses of $437,388, consulting and professional fees of $386,406, research and development costs of $289,934, commissions of $36,500, and other operating expenses of $25,808.

The decrease in payroll related expenses is primarily due to stock-based compensation expense for the three months ended March 31, 2023, of $400,000 related to the issuance of a share of Series B Preferred stock to the Company’s CEO as well as a reduced headcount and no CEO bonus in the 2024 period.

The decrease in consulting and professional fees is primarily the result of stock-based compensation of $315,000 in the 2023 period recorded in conjunction with shares issued for investor relations and financial advisory services, and decreased consulting and professional fees related to costs associated with operating as a public company.  Decreased accounting fees relate to the timing of the Company’s 2023 10-K filing.

The decrease in research and development costs relates to payments made under its product development agreement as new milestones were met in the 2023 period. The decrease in commissions relates to the reduction in sales requiring commission.

The decrease in other operating expenses consists primarily of reduced travel and expenses related to the building that was sold in 2023, such as depreciation and property taxes.

Other income (expense) decreased by $1,486,873 primarily due to a gain on the sale of the Company’s building of $1,193,676, in the 2023 period, losses related to derivative liabilities totaling $872,884 in the 2024 period, partially offset by a decrease in interest expense of $328,881 and reversal of accrued default penalties totaling $250,000 in the 2024 period.  The decrease in interest expense reflects $160,000 related to the valuation of certain trigger warrants for matured convertible notes payable, as well as approximately $160,000 of amortized debt discount in the 2023 period.  All debt discount for notes issued prior to Jan 1,2024 has been fully amortized in 2023.

As a result of the foregoing, we recorded a net loss of $836,274 for the three months ended March 31, 2024, compared to a net loss of $456,063 for the three months ended March 31, 2023. The increase in net loss is primarily attributed to the decrease in other income (loss), partially offset by a decreased loss from operations.

COVID-19 may impact our business.

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical areas in which we operate. While it is unknown how long these conditions will last and what the complete financial effect will be to the Company, COVID-19 may have an adverse effect on our business. While we are taking diligent steps to mitigate any possible disruptions to our business, we are unable to predict the extent or nature of these impacts, at this time, to our future financial condition and results of operations.

Liquidity and Capital Resources

During the three months ended March 31,2024 our cash and cash equivalents decreased by $8,861 reflecting cash used in operations of $158,361 and provided by financing activities of $149,500. At March 31, 2024, the Company had a working capital deficit of $3,726,900 and cash on hand of $78,843. During the three months ended March 31,2023 our cash and cash equivalents increased by $866,602 reflecting cash used in operations of $452,736 and cash used in financing activities of $575,250, offset by cash provided from the sale

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of the Company’s building of $1,894,588. At March 31, 2023, the Company had a working capital deficit of $872,308 and cash on hand of $1,235,027.

Operating Activities

Cash flows used in operating activities totaled $158,361 for the three months ended March 31,2024 as compared to cash flows used of $452,736 or the three months ended March 31, 2023. The change in cash flows used in operating activities is primarily the result of a decrease in accrued liabilities and accounts payable as well as a decrease in the loss from operations, excluding stock-based compensation expense.

Investing Activities

Cash provided by investing activities for the three months ended March 31,2023 totaled $1,894,588 related to the gross proceeds from the sale of the Company’s building before payment of the outstanding long-term bank debt secured by the building. There were no investing activities in the 2024 period.

Financing Activities

Cash flows provided by financing activities totaled $149,500 for the three months ended March 31,2024 as compared to cash flows used in financing activities of $575,250 for the three months ended March 31, 2023. The cash flows provided in the 2024 period relate to the net proceeds from a convertible debt financing. The cash flows used in the 2023 period are primarily the result of the $522,401 repayment of the long- term bank debt related to the building as part of the March 2023 sale and convertible notes payable payments totaling $52,849.

In March, 2024, the Company entered into a settlement agreement with one of its lenders for amounts in default under the October 2021, February 2022 and September 2022 convertible promissory notes. The settlement agreements have been accounted for as a debt modification. Principal of $932,601 and accrued interest of $128,763 are covered by the agreement and subject to the following settlement terms:

● Any and all outstanding warrants are to be cancelled without consideration.

● The maturity date has been extended to September 25, 2025.

● Interest rate is capped at 12% per annum.

● Default penalties accrued up to the settlement date are no longer due and from the effective date forward are amended to 115% from 125%.  Accrued default penalties totaling $251,000 and outstanding at December 31, 2023 have been reversed and recorded as other income in the Company’s statement of operations for the three months ended March 31, 2024.

● All payments will be applied first to outstanding principal and will include the note holders’ pro-rata share of $600 per unit, from futures sales of the Company’s Wellness ProPlus Infinity units.

● Conversions of outstanding principal are limited to $30,000 per calendar month through December 31, 2024 and may be waived under certain conditions and after such date.

As of March 31, 2024, and separately, the Company is in default of two matured convertible promissory notes, including defaults resulting from the Company’s sale of its real property on March 15, 2023, issued to two lenders on March 10, 2022, and August 8, 2022, with principal and interest due in the amounts of $342,070 and $145,354, respectively. The convertible notes included a cross-default and a cross-default provision which required the Company to remit payment of principal, accrued interest, default interest, and legal fees, multiplied by 125% and 150%, respectively. On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. Principal of $305,501 and accrued interest of $36,971 are covered by the agreement and subject to the following settlement terms:

● Any and all outstanding warrants are to be cancelled without consideration.

● The maturity date has been extended to September 25, 2025.

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● Interest rate is capped at 12% per annum.

● Default penalties accrued up to the settlement date are no longer due and from the effective date forward are amended to 115% from 125%.

● All payments will be applied first to outstanding principal and will include the note holders’ pro-rata share of $400 per unit, from futures sales of the Company’s Wellness ProPlus Infinity units.

● Conversions of outstanding principal are limited to $30,000 per calendar month through December 31, 2024, and may be waived under certain conditions and after such date.

The Company is in negotiations with the other lender to reform the note in default.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely and reliable financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America.

As of the period ended March 31, 2024 our principal executive officer and principal financial officer completed an assessment of the effectiveness of our disclosure controls and procedures, to determine the existence of any material weaknesses or significant deficiencies. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant’s financial reporting.

Based on this evaluation, the Company’s management concluded its internal controls over financial reporting were not effective as of March 31, 2024. The ineffectiveness of the Company’s internal control over financial reporting was due to the following identified material weaknesses and significant deficiencies:

Material Weakness

Management identified the following material weaknesses:

● we do not have an Audit Committee – While not being legally obligated to have an Audit Committee, it is the management’s view that such a committee, including a financial expert board member, is an utmost important entity level control of the Company’s financial statements. Currently the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

● we have not performed a risk assessment and mapped our processes to control objectives.

● we have not implemented comprehensive entity-level internal controls.

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● we have not implemented adequate system and manual controls; and

● we do not have sufficient segregation of duties.

Changes in Internal Control over Financial Reporting.

Our management will continue to monitor and evaluate the designation, implementation and effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are presently no material pending legal proceedings filed to which the Company, any executive officer, or any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject.

There are unasserted claims between the Company and one of the Company’s lenders that could possibly exceed $5,000. As of the date of this filing, the lender notified the Company that, because of the respective defaults or cross defaults of matured notes resulting from the sale of its real property, the default amounts under the note, including the payment of principal, accrued interest, default interest, and legal fees, multiplied by 150% is being sought. During the three months ended March 31, 2024, the note holder has applied default conversion rates to outstanding principal, interest, and default amounts under the notes. The Company has accrued all default interest under the note. The Company is in negotiations with the lender to reform the note in default. With respect to the unasserted claims by and between the Company and the noteholder, the ongoing negotiations of the parties are informal, private, confidential, and, as of the date of this filing, are incomplete and unresolved. Thus, it is difficult as of the date of this filing to establish whether or not any legal actions arising from these unasserted claims are “probable,” “reasonably possible,” or “remote,” or what remedies may be sought in any action, and whether or not those remedies are material under FAS 5. No note holder has communicated to the Company that legal action exists or is imminent. No court has jurisdiction over the matters because, as of the date of this filing, no lender has filed an action in any court of competent jurisdiction or any arbitration proceeding.

Based on the information presently available, including discussion with outside counsel and other consultants, management believes, as of the date of this filing, that resolution of any other matters will not have a material adverse effect on its business, results of operations, financial condition, or cash flows.

ITEM 1A. RISK FACTORS

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In February and March 2017, the Company executed a promotion whereby distributors who made purchases during the promotional period would receive credits towards either future purchases of product through September 1, 2017 or shares of stock. Credits totaling $173,955 were earned by such distributors of which $1,010 had been applied against purchases of product. The remaining credit of $172,945 would be satisfied in shares of the Company’s common stock. As of and for the year ended December 31, 2017, an accrual for $170,930 of the amount of the net credits has been recorded as marketing expense in the statement of operations as well as within accrued liabilities on the accompanying balance sheet. The Company recorded the amount as marketing expense as the promotion was provided directly to distributors rather than to end users. In 2018, the Company issued 243,584 common shares to 25 unaffiliated shareholders earned in the 2017 promotional program. The issuances were made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. The distributors were “accredited investors” and/or “sophisticated investors” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning their qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to the distributors full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. The distributors acquired the restricted common stock for their own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On December 31, 2017, the Company issued 15,000,000 common shares to Matthew Wolfson (“Wolfson”) for services valued at $697,984. Two million were registered in the Company’s S-1 made effective August 6, 2020. The issuance to Wolfson was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Wolfson was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Wolfson full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Wolfson acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On September 19, 2018, the Company issued 5,000 common shares to Body Tone, a sole proprietorship (“Body Tone”) for $5,000. The issuance to Body Tone was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Body Tone was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Body Tone full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Body Tone acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On October 31, 2018, the Company issued 100,000 common shares to Gene Taubman (“Taubman”) for $100,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Taubman was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Taubman was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Taubman full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Taubman acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On November 29, 2018, the Company issued 247,565 common shares to EBI (“EBI”) as a settlement for debt valued at 175,771. The issuance to EBI was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. EBI was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to EBI full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. EBI acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On January 24, 2019, the Company issued 28,169 common shares to Robert L. Hymers, III (“Hymers”) for $20,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 7, 2019, the Company issued 20,000 common shares to Chester W. Hedderman (“Hedderman”) for $20,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Hedderman was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hedderman was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hedderman full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hedderman acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 12, 2019, the Company sold 150,000 common shares to Robert L. Hymers, III (“Hymers”) for services valued at $106,500. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 28, 2019, the Company sold 21,126 common shares to Robert L. Hymers, III (“Hymers”) for 15,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020.The issuance to Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On March 27, 2019, the Company sold 35,211 common shares to James Hancock (“Hancock”) for $25,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Hancock was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hancock was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hancock full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hancock acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On June 28, 2019, the Company sold 43,461 common shares to Robert L. Hymers, III (“Hymers”) for services valued at $30,857. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On July 1, 2019, the Company sold 42,253 common shares to Robert L. Hymers, III (“Hymers”) for $30,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020.The issuance to Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On July 1, 2019, the Company sold 10,000 shares to PYP Enterprises (“PYP”) for services valued at $7,100. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to PYP was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. PYP was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to PYP full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. PYP acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On July 1, 2019, the Company sold 10,000 common shares to Brenda Andrews (“Andrews”) for services valued at $7,100. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Andrews was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Andrews was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning her qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Andrews full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Andrews acquired the restricted common stock for her own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On October 11, 2019, the Company sold 64,215 common shares to Nikolai Ogorodikov (“Ogorodikov”) for conversion of a note and accrued interest. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Ogorodikov was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Ogorodikov was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Ogorodikov full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Ogorodikov acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On October 24, 2019, the Company sold 39,363 common shares to Ben and Carol Howden (“Howden”) for conversion of a note and accrued interest. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Howden was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Howden was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning their qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Howden full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Howden acquired the restricted common stock for their own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On October 30, 2019, the Company sold 28,169 common shares to Eyelyn Easson (“Easson”) for settlement of a liability. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Easson was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Easson was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning her qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Easson full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Easson acquired the restricted common stock for her own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On November 1, 2019, the Company sold 1,000,000 common shares to Donald Steinberg (“Steinberg”) for conversion of KISS note. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Steinberg was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Steinberg was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Steinberg full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Steinberg acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On January 23, 2020, the Company sold 10,355 common shares to Tim Manning (“Manning”) settlement of a liability. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Manning was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Manning was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Manning full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Manning acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 11, 2020, the Company sold 200,000 common shares to Robert L. Hymers, III (“Hymers”) for services valued at $102,000. These shares were registered in the Company’s S-1 registration statement made effective August 6, 2020. The issuance to Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning his qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On February 27, 2020, the Company sold 400,000 common shares to RedStone Consultants (“RedStone”) for services valued at $188,000. The issuance to RedStone was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. RedStone was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to RedStone full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. RedStone acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On June 4, 2020, the Company sold 100,000 common shares to Vista Capital (“Vista”) as original issue discount on debt valued at $51,000. The issuance to Vista was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Vista was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Vista full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Vista acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On June 15, 2020, the Company sold 142,857 common shares to Pro Active Capital (“Pro Active”) for $50,000. The issuance to Pro Active was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Pro Active was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Pro Active full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Pro Active acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On November 3, 2020, the Company sold 65,000 common shares to PCG Advisory for services valued at $55,900. The issuance to PCG was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. PCG was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to PCG full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. PCG acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On December 14, 2020 Vista Capital Investments, LLC converted is promissory note of unpaid principal and accrued interest $118,800 in 339,429 shares of common stock. The issuance to Vista was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Vista was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Vista full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Vista acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 18, 2021, Redstart Holdings Corp. converted $30,000 of unpaid principal into 112,824 common shares from a convertible note. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 22, 2021, Redstart Holdings Corp. converted $35,000 of unpaid principal into 145,833 common shares from a convertible note. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On March 9, 2021, Redstart Holdings Corp. converted $15,000 of unpaid principal into 88,600 common shares from a convertible note dated August 11, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On March 10, 2021, Redstart Holdings Corp. converted $23,000 of unpaid principal and $5,150 of accrued and unpaid interest into 171,856 common shares from a convertible note dated August 11, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On March 15, 2021, Redstart Holdings Corp. converted $25,000 of unpaid principal into 152,625 common shares from a convertible note dated September 8, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On March 18, 2021, Redstart Holdings Corp. converted $53,000 of unpaid principal and $3,900 of accrued and unpaid interest into 347,375 common shares from a convertible note dated September 8, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On April 1, 2021, JSJ Investments, Inc. converted $30,000 of unpaid principal into 238,095 common shares from a convertible note. The issuance to JSJ was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. JSJ was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to JSJ full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. JSJ acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On April 8, 2021, JSJ Investments, Inc. converted $40,000 of unpaid principal into 361,572 common shares from a convertible note. The issuance to JSJ was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. JSJ was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to JSJ full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. JSJ acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On April 28, 2021, JSJ Investments, Inc. converted $38,000 of unpaid principal and $5,795.07 in accrued interest into 639,539 common shares from a convertible note dated September 28, 2020. The issuance to JSJ was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. JSJ was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to JSJ full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. JSJ acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On April 28, 2021, Redstart Holdings Corp. converted $30,000 of unpaid principal into 373,134 common shares from a convertible note dated October 22, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On May 6, 2021, Redstart Holdings Corp. converted $20,000 of unpaid principal into 385,356 common shares from a convertible note dated October 22, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On May 7, 2021, Redstart Holdings Corp. converted $35,000 of unpaid principal into 674,374 common shares from a convertible note dated October 22, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On May 12, 2021, Redstart Holdings Corp. converted $25,000 of unpaid principal into 520,833 common shares from a convertible note dated October 22, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On May 17, 2021, Redstart Holdings Corp. converted $18,000 of unpaid principal and $6,400 of interest into 602,469 common shares from a convertible note dated October 22, 2020. The issuance to Redstart was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Redstart was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Redstart full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Redstart acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On May 25, 2021, YA II PN, Ltd, converted $60,000 of unpaid principal and $1,301.37 of interest into 1,802,981 common shares from a convertible note dated May 7, 2021. The issuance to YA II PN, Ltd, was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. YA II PN, Ltd, was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to YA II PN, Ltd, full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. YA II PN, Ltd, acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On June 8, 2021, Jefferson Street Capital, LLC converted $40,000 of unpaid principal and $750 of expense into 1,344,440 common shares from a convertible note dated December 1, 2020. The issuance to Jefferson Street Capital, LLC was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Jefferson Street Capital, LLC was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Jefferson Street Capital, LLC full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Jefferson Street Capital, LLC acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On June 16, 2021, YA II PN, Ltd, converted $65,000 of unpaid principal and, $1,197.26 of interest into 1,946,978 common shares from a convertible note dated May 7, 2021. The issuance to YA II PN, Ltd, was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. YA II PN, Ltd, was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to YA II PN, Ltd, full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. YA II PN, Ltd, acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On June 17, 2021, GS Capital Partners, LLC converted $40,000 in principal and $2,005.48 in interest and $325 of expense into 1,675,591 common shares from a convertible note dated December 11, 2020. The issuance to GS Capital Partners, LLC was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. GS Capital Partners, LLC was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to GS Capital Partners, LLC full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. GS Capital Partners, LLC acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On July 8, 2021, YA II PN, Ltd, converted $85,000 of unpaid principal and, $787.67 of interest into 1,910,638 common shares from a convertible note dated May 7, 2021. The issuance to YA II PN, Ltd, was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. YA II PN, Ltd, was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to YA II PN, Ltd, full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. YA II PN, Ltd, acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On July 9, 2021, Jefferson Street Capital, LLC converted $50,000 of unpaid principal and expenses of $750 into 1,169,354 common shares from a convertible note dated December 1, 2020. The issuance to Jefferson Street Capital, LLC was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Jefferson Street Capital, LLC was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Jefferson Street Capital, LLC full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Jefferson Street Capital, LLC acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On July 15, 2021, GS Capital Partners, LLC converted $40,000 in principal and $2,312.33 in interest and $175 in expense into 1,087,745 common shares from a convertible note dated December 11, 2020. The issuance to GS Capital Partners, LLC was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. GS Capital Partners, LLC was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to GS Capital Partners, LLC full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. GS Capital Partners, LLC acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On July 23, 2021, YA II PN, Ltd, converted $80,000 of unpaid principal and, $4,021.92 of interest into 2,386,985 common shares from a convertible note dated May 7, 2021. The issuance to YA II PN, Ltd, was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. YA II PN, Ltd, was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to YA II PN, Ltd, full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. YA II PN, Ltd, acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On August 9, 2021, GS Capital Partners, LLC converted $30,000 in principal and $1,939.73 in interest and $175 in expense into 1,193,811 common shares from a convertible note dated December 11, 2020. The issuance to GS Capital Partners, LLC was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. GS Capital Partners, LLC was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to GS Capital Partners, LLC full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. GS Capital Partners, LLC acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On February 11, 2022, the Company issued 3,629,725 common shares to Mast Hill Fund, LP from its exercise of a warrant dated October 13, 2021. The issuance to Mast Hill Fund, LP was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Mast Hill Fund, LP was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Mast Hill Fund, LP full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Mast Hill Fund, LP acquired the restricted common stock for its own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 17, 2022, the Company issued 7,500,000 common shares to Robert L. Hymers, III, for consulting services. The issuance to Mr. Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Mr. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Mr. Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Mr. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 23, 2022, the Company issued 850,000 common shares to Gene Taubman, for consulting services. The issuance to Mr. Taubman was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Mr. Taubman was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Mr. Taubman full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Mr. Taubman acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On February 24, 2022, the Company issued to Robert L. Hymers, III, 7,500,000 common shares for consulting services. The issuance to Mr. Hymers was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. Mr. Hymers was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to Mr. Hymers full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Mr. Hymers acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

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On February 24, 2022, the Company issued 2,500,000 common shares to North Equities USA, Ltd., for consulting services. The issuance to North Equities was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. North Equities was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made available to North Equities full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. North Equities acquired the restricted common stock for his own account, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless pursuant to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On May 9, 2023, Jefferson Street Capital, LLC converted $20,000 of unpaid principal and $750 in fees into 8,178,487 common shares from a convertible note dated August 8, 2022. The issuance to Jefferson Street relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Jefferson Street was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Jefferson Street. There was no general solicitation concerning the offer or sale of the restricted securities. Jefferson Street acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On May 10, 2023, the Company issued 1,000,000 common shares to Mast Hill Fund, LP, as a reconciliation for the Company’s prior issuances to another convertible note holder at a lower base conversion price. The issuance to Mast Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On May 10, 2023, the Company issued 2,700,000 common shares to Mast Hill Fund, LP, as a reconciliation for the Company’s prior issuances to another convertible note holder at a lower base conversion price. The issuance to Mast Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On May 10, 2023, the Company issued 375,000 common shares to Blue Lake Partners, LLC, as a reconciliation for the Company’s prior issuances to another convertible note holder at a lower base conversion price. The issuance to Blue Lake relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Blue Lake was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Blue Lake. There was no general solicitation concerning the offer or sale of the restricted securities. Blue Lake acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

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On May 16, 2023, Blue Lake Partners, LLC converted $33,950 of unpaid principal and $1,750 in fees into 15,000,000 common shares from a convertible note dated March 10, 2022. The issuance to Blue Lake relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Blue Lake was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Blue Lake. There was no general solicitation concerning the offer or sale of the restricted securities. Blue Lake acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On May 25, 2023, Mast Hill Fund, LP converted $15,203.81 of unpaid interest and $21,602.19 in default interest, and $1,750 in fees into 16,200,000 common shares from a convertible note dated September 22, 2022. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On June 1, 2023, Jefferson Street Capital, LLC converted $16,500 of unpaid principal and $750 in fees into 16,911,764 common shares from a convertible note dated August 8, 2022. The issuance to Jefferson Street relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Jefferson Street was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Jefferson Street. There was no general solicitation concerning the offer or sale of the restricted securities. Jefferson Street acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On June 12, 2023, Mast Hill Fund, LP converted $33,782.19 of unpaid interest and $7,069.81 in default interest, and $1,750 in fees into 17,900,000 common shares from a convertible note dated September 22, 2022. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On June 16, 2023, Mast Hill Fund, LP converted $36,599.82 of principal, $5,215.88 of unpaid interest and $1,178.30 in default interest, and $1,750 in fees into 18,800,000 common shares from a convertible note dated September 22, 2022. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

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On June 20, 2023, Jefferson Street Capital, LLC converted $17,000 of unpaid principal and $750 in fees into 17,401,960 common shares from a convertible note dated August 8, 2022. The issuance to Jefferson Street relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Jefferson Street was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Jefferson Street. There was no general solicitation concerning the offer or sale of the restricted securities. Jefferson Street acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On June 22, 2023, Mast Hill Fund, LP converted $45,017.66 of principal, $2,260.34 in default interest, and $1,750 in fees into 20,600,000 common shares from a convertible note dated September 22, 2022. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On July 13, 2023, Blue Lake Partners, LLC converted $1,999.13 of principal, $18,282.87 of accrued interest, and $1,750.00 of fees from a convertible promissory note dated March 10, 2022, into 21,600,000 shares of common stock. The original issuance to Blue Lake relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Blue Lake was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Blue Lake. There was no general solicitation concerning the offer or sale of the restricted securities. Blue Lake acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On July 14, 2023, Jefferson Street Capital, LLC, converted convert $17,000.00 of principal and $750.00 in fees, totaling $17,750.00 from a convertible note issued August 8, 2022, into 17,401,960 shares of Common Stock. The original issuance to Jefferson Street relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Jefferson Street was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Jefferson Street. There was no general solicitation concerning the offer or sale of the restricted securities. Jefferson Street acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On March 26, 2024, Mast Hill Fund, LP converted $23,660.51 of principal into 23,196,579 common shares from a convertible note dated February 11, 2022. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

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On April 29, 2024, Mast Hill Fund, LP converted $21,221.72 of principal into 20,805,607 common shares from a convertible note dated February 11, 2022. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder with respect to the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information concerning its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation concerning the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its own account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On May 6, 2024, Mast Hill Fund, LP converted $25,900.13 of principal into 25,392,288 common shares from a convertible note dated October 13, 2021. The issuance to Mat Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” under Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information regarding its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation regarding the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On May 23, 2024, Mast Hill Fund, LP converted $4,099.87 of principal into 4,019,480 common shares from a convertible note dated October 13, 2021. The issuance to Mast Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” under Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information regarding its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation regarding the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On June 3, 2024, Mast Hill Fund, LP converted $27,397.13 of principal into 26,859,935 common shares from a convertible note dated October 13, 2021. The issuance to Mast Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” under Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information regarding its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation regarding the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

On June 6, 2024, Mast Hill Fund, LP converted $2,602.87 of principal into 2,551,833 common shares from a convertible note dated October 13, 2021. The issuance to Mast Hill relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of the restricted stock. Mast Hill was an “accredited investor” and/or “sophisticated investor” under Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties, and information regarding its qualifications as a “sophisticated investor” and/or “accredited investor.” The Company provided and made full information regarding its business and operations available to Mast Hill. There was no general solicitation regarding the offer or sale of the restricted securities. Mast Hill acquired the restricted common stock for its account, for investment purposes, and not with a view to public resale or distribution thereof within the meaning of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

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ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

The following exhibits are included as part of this report:

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.

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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.

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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)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: June 14, 2024

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)

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EX-31.1

Exhibit 31.1

I, Matthew Wolfson, certify that:

1.I have reviewed this annual report on Form 10-Q for the quarter ended March 31, 2024, of Electromedical Technologies, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report.

4.As the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.As the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

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

EX-31.2

Exhibit 31.2

I, Matthew Wolfson, certify that:

1.I have reviewed this annual report on Form 10-Q for the quarter ended March 31, 2024, for Electromedical Technologies, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.As the registrant’s other certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.As the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

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

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-Q of Electromedical Technologies, Inc. (the “Company”) for the quarter ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Matthew Wolfson, Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	Jun. 13, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	000-56192
Entity Registrant Name	ELECTROMEDICAL TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-2619815
Entity Address, Address Line One	16413 N. 91st Street
Entity Address, Address Line Two	Ste. C140
Entity Address, City or Town	Scottsdale
Entity Address State Or Province	AZ
Entity Address, Postal Zip Code	85260
City Area Code	888
Local Phone Number	880-7888
Title of 12(g) Security	Common Stock
Trading Symbol	EMED
Security Exchange Name	NONE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		566,111,930
Entity Central Index Key	0001715819
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

BALANCE SHEETS - USD ($)	Mar. 31, 2024	Dec. 31, 2023
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
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
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
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
Series A Preferred Stock
Stockholders' deficit
Preferred Stock	365,000	365,000
Series B Preferred Stock
Stockholders' deficit
Preferred Stock	$ 400,000	$ 400,000

XML

BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Discount on convertible promissory notes	$ 0	$ 375,865
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized	1,999,000,000	1,999,000,000
Common stock, shares outstanding	486,482,787	463,286,208
Series A Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding	1,000,000	1,000,000
Series B Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	1	1
Preferred stock, shares outstanding	1	1

XML

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
STATEMENTS OF OPERATIONS
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)
Net loss attributable to common stockholders	$ (836,274)	$ (456,063)
Weighted average shares outstanding - basic (in shares)	464,815,653	240,567,805
Weighted average shares outstanding - diluted (in shares)	464,815,653	240,567,805
Weighted average loss per share - basic (in dollars per share)	$ (0.002)	$ (0.002)
Weighted average loss per share - diluted (in dollars per share)	$ (0.002)	$ (0.002)

XML

STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($)	Series A Preferred Stock Preferred Stock	Series B Preferred Stock Preferred Stock	Common Stock	Paid in Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2022	$ 365,000		$ 1,896	$ 22,237,300	$ (24,825,041)	$ (2,220,845)
Beginning balance (in shares) at Dec. 31, 2022	1,000,000		189,784,529
Increase (Decrease) in Stockholders' Equity
Shares issued for consulting services			$ 350	314,650		315,000
Shares issued for consulting services (in shares)			35,000,000
Conversion of convertible promissory note			$ 50	49,950		50,000
Conversion of convertible promissory note (In shares)			5,000,000
Cashless warrant exercises			$ 180	(180)
Cashless warrant exercises (in shares)			18,000,000
Share issued as CEO compensation		$ 400,000				400,000
Share issued as CEO compensation (in shares)		1
Shares issued in conjunction with settlement reset			$ 461	697,539		698,000
Shares issued in conjunction with settlement reset (in shares)			46,102,156
Settlement of stock-based compensation liabilities			$ 30	20,970		21,000
Settlement of stock-based compensation liabilities (in shares)			3,000,000
Net loss					(456,063)	(456,063)
Ending balance at Mar. 31, 2023	$ 365,000	$ 400,000	$ 2,967	23,480,229	(25,281,104)	(1,032,908)
Ending balance (in shares) at Mar. 31, 2023	1,000,000	1	296,886,685
Increase (Decrease) in Stockholders' Equity
Trigger warrants issued				160,000		160,000
Beginning balance at Dec. 31, 2023	$ 365,000	$ 400,000	$ 4,631	23,827,330	(27,469,748)	(2,872,787)
Beginning balance (in shares) at Dec. 31, 2023	1,000,000	1	463,286,208
Increase (Decrease) in Stockholders' Equity
Conversion of convertible promissory notes, accrued interest and derivative liabilities			$ 232	20,645		20,877
Conversion of convertible promissory notes, accrued interest and derivative liabilities (in Shares)			23,196,579
Net loss					(836,274)	(836,274)
Ending balance at Mar. 31, 2024	$ 365,000	$ 400,000	$ 4,863	$ 23,847,975	$ (28,306,022)	$ (3,688,184)
Ending balance (in shares) at Mar. 31, 2024	1,000,000	1	486,482,787

XML

STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 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	0	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
Cash paid during the period for:
Interest	23,227	22,934
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

XML

ORGANIZATION AND NATURE OF BUSINESS

3 Months Ended

Mar. 31, 2024

ORGANIZATION AND NATURE OF BUSINESS

ORGANIZATION AND NATURE OF BUSINESS

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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. We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation. 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, 2023. The results of operations for the three months ended March 31, 2024, 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 $24.6 million of accumulated net losses. In addition, during the three months ended March 31, 2024, the Company used $158,361 in operations and had a working capital deficit of $3,726,900. These factors, among others, 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 twelve 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 entity 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 at March 31, 2024.

Revenue Recognition

Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities, allowance for estimated returns, chargebacks, and markdowns based upon management’s estimates and the Company’s historical experience. The Company’s liability for sales return refunds is recognized within other current liabilities, and an asset for the value of inventory which is expected to be returned is recognized within other current assets on the balance sheets. The Company generally allows a 30 day right of return to its customers. As of both March 31, 2024 and December 31, 2023 the sales returns allowance was $6,990.

Certain larger customers pay in advance for future shipments. These advance payments totaled $185,275 and $197,325 at March 31, 2024 and December 31, 2023, respectively, and are recorded as customer deposits in the accompanying balance sheets. Revenue related to these advance payments is recognized upon shipment to the distributor or the end-customer.

At the completion of the initial three-year warranty, the Company sells extended warranties for periods ranging from one to three years. Revenue is recognized on a straight-line basis over the term of the contract. At March 31, 2024 and December 31, 2023, deferred revenue of $17,424 and $20,787 is recorded, respectively, in current and long-term liabilities in the accompanying balance sheets, in connection with these extended warranties.

Financial Instruments and Concentrations of Business and Credit Risk

The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk.

The Company’s accounts receivable, which are unsecured, expose the Company to credit risks such as collectability and business risks such as customer concentrations. The Company mitigates credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic review of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. The Company mitigates business risks by attempting to diversify its customer base.

Significant customer sales as a percentage of total sales are as follows:

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Customer A	34.8	%	18.8	%
Customer B	14.9	%	10.2	%
Customer F	11.2	%	—

Amounts due these customers totaled $14,142 and $12,442 at March 31, 2024 and December 31, 2023, respectively for commissions and reimbursements. Amounts due from these customers, totaled $297 and $594 at March 31, 2024 and December 31, 2023, respectively. Customer deposits on hand from these customers totaled $58,900 and $70,950 at March 31, 2024 and December 31, 2023, respectively. The loss of these customers would have a significant impact on the operations and cash flows of the Company.

The Company’s supplier concentrations expose the Company to business risks, which the Company mitigates by attempting to diversify its supply chain. Significant supplier purchases as a percentage of total inventory purchases are as follows:

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Supplier A	69.9	%	64.0	%
Supplier D	—		25.5	%
Supplier F	17.8	%	—

There were no amounts outstanding due these suppliers at March 31, 2024 and December 31, 2023. The loss of key vendors may have a significant impact on the operations and cash flows of the Company.

The estimated fair value of financial instruments has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is often required to interpret market data used to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.

Disclosure of Fair Value

The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below:

● Cash and cash equivalents are carried at cost, which approximates fair value.

● The carrying amounts of receivables approximate fair value due to their short-term maturities.

● The carrying amounts of payables approximate fair value due to their short-term maturities.

● Derivative liabilities are adjusted to fair value utilizing the Lattice method

Asset and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability

Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

The Company’s convertible promissory notes contain variable conversion provisions upon default, Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and shares to be issued were recorded as derivative liabilities on the default dates.

The following table presents changes during the three months ended March 31, 2024 in Level 3 liabilities measured at fair value on a recurring basis:

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

The levels of the fair value hierarchy into which the Company’s assets and liabilities fall as of March 31, 2024, are as follows:

	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

Inventories

Inventories are stated at the lower of cost or market. Cost is determined based on the first-in, first-out cost flow assumption (“FIFO”) while market is determined based upon the estimated net realizable value less an allowance for selling and distribution expenses and a normal gross profit. The Company evaluates the need for inventory reserves associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis. As of March 31, 2024 and December 31, 2023, the Company believes there are no excess and obsolete inventories and accordingly, did not record an inventory reserve. Inventories consist of purchased finished goods.

Sales Taxes

Sales taxes for the three-month periods ended March 31, 2024 and 2023, were recorded on a net basis. Included in accrued expenses at both March 31, 2024 and December 31, 2023 is approximately $61,000 related to sales taxes.

Warranty

The Company warranties the sale of most of its products and records an accrual for estimated future claims. The standard warranty is typically for a period of three years. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The Company recorded a liability as of March 31, 2024 and December 31,2023 of $15,595 and $16,642, respectively. The expense is included in cost of sales in the statements of operations and within accrued expenses on the accompanying balance sheets.

Lease Commitment

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Lease expense for variable lease components are recognized when the obligation is probable. Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company’s lease, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments.

The lease term for the Company’s lease includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. The Option for the lease renewal has been excluded from the lease term (and lease liability) for the Company’s lease as the reasonably certain threshold is not met.

Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain.

Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company’s statement of operations in the same line as expense arising from fixed lease payments. As of March 31, 2024, management determined that there were no variable lease costs.

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of March 31, 2024 and December 31, 2023, diluted net loss per share is the same as basic net loss per share for each period.

Conversion of outstanding warrants, certain accrued liabilities and convertible promissory notes at March 31, 2024 may result in an estimated 1,690,762,268 additional shares of common stock outstanding. At March 31, 2024, there are 1,999,000,000 common shares authorized and 486,482,787 outstanding. Management has agreed to amend its shares outstanding to meet the future requirements resulting from any of the above conversions.

COVID-19

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, COVID-19 has had an adverse effect on our business, including our supply chains and distribution systems. While we are taking diligent steps to mitigate disruptions to our supply chain, we are unable to predict the extent or nature of these impacts at this time to our future financial condition and results of operations.

Recently Issued Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2024

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 3.PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of:

	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

On March 15, 2023, the Company entered into an agreement to sell the building of its principal offices at a purchase price of $2 million and net proceeds of $1,363,818, upon repayment in full of the Company’s bank debt. The sale resulted in a realized gain of $1,193,676, which has been recorded as other income on the accompanying statement of operations.

Depreciation and amortization expense related to property and equipment was $0 and $4,557 the three months ended March 31, 2024 and 2023, respectively. Depreciation and amortization are included in selling, general and administrative expenses on the accompanying statements of operations.

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NOTES PAYABLE

3 Months Ended

Mar. 31, 2024

NOTES PAYABLE

NOTES PAYABLE

NOTE 4.NOTES PAYABLE

Convertible Promissory Notes

The aggregate of convertible promissory notes is as follows:

	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

The Net Notes balance at March 31, 2024 is comprised of the following:

	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

The Net Notes balance at December 31, 2023 is comprised of the following:

	Principal		Debt Discount		Net
Pre 2020	$	50,000	$	—	$	50,000
October 2021		73,336		—		73,336
February 2022		44,882		—		44,882
March 2022		305,500		—		305,500
August 2022		105,500		—		105,500
September 2022		814,383		—		814,383
	$	1,393,601	$	—	$	1,393,601

In March, 2024, the Company entered into a settlement agreement with one of its lenders for amounts in default under the October 2021, February 2022 and September 2022 convertible promissory notes. The settlement agreements have been accounted for as a debt modification. (See Note 6). Principal of $932,601 and accrued interest of $128,763 are covered by the agreement and subject to the following settlement terms:

● Any and all outstanding warrants are to be cancelled without consideration.

● The maturity date has been extended to September 25, 2025.

● Interest rate is capped at 12% per annum.

● Default penalties accrued up to the settlement date are no longer due and from the effective date forward are amended to 115% from 125%. Accrued default penalties totaling $251,000 and outstanding at December 31, 2023 have been reversed and recorded as other income in the Company’s statement of operations for the three months ended March 31, 2024.

● All payments will be applied first to outstanding principal and will include the note holders’ pro-rata share of $600 per unit, from futures sales of the Company’s Wellness ProPlus Infinity units.

● Conversions of outstanding principal are limited to $30,000 per calendar month through December 31, 2024 and may be waived under certain conditions and after such date.

As of March 31, 2024, and separately, the Company is in default of two matured convertible promissory notes, including defaults resulting from the Company’s sale of its real property on March 15, 2023, issued to two lenders on March 10, 2022, and August 8, 2022, with principal and interest due in the amounts of $342,070 and $145,354, respectively. The convertible notes included a cross-default and a cross-default provision which required the Company to remit payment of principal, accrued interest, default interest, and legal fees, multiplied by 125% and 150%, respectively. The amount of $158,000 in default penalties has been accrued and is recorded in the Company’s balance sheet as of March 31,2024, for these lenders. On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. The Company is in negotiations with the other lender to reform the note in default. See Note 11.

In March 2024, the Company borrowed $149,500 in conjunction with an unsecured promissory note with an investor. Proceeds of $130,000 include an original issue discount of $19,500. An up-front interest charge at twelve percent (12%) of the principal will be added to the principal balance for an outstanding balance of $167,440 to be paid in nine monthly payments of $18,604 beginning April 15, 2024. The note matures on December 15, 2024. At any time following an event of default, the investor shall have the right, to convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of common stock. The note may be converted at a 35% discount to trading prices during the 10 days prior to conversion.

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LONG-TERM DEBT

3 Months Ended

Mar. 31, 2024

LONG-TERM DEBT

LONG-TERM DEBT

NOTE 5.LONG-TERM DEBT

Government Debt

In June 2020, the Company received a $150,000 economic injury disaster loan (“EIDL”). The loan accrues interest at a rate of 3.75% annually and is collateralized by all personal property and intangible assets of the Company. The loan has a 30-month moratorium on

payments, after which monthly principal and interest payments of $731 will be made through the maturity date of June 2050. Interest expense totaled $1,402 and $1,387 for the three months ended March 31, 2024 and 2023, respectively.

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DERIVATIVE LIABILITIES

3 Months Ended

Mar. 31, 2024

DERIVATIVE LIABILITIES

DERIVATIVE LIABILITIES

NOTE 6.DERIVATIVE LIABILITIES

The Company’s convertible promissory notes contain variable conversion provisions upon default, Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and shares to be issued were recorded as derivative liabilities on the default dates. In March,2024, the Company entered into a settlement agreement with one of its lenders for amounts in default under the October 2021, February 2022 and September 2022 convertible promissory notes. The settlement agreement resulted in a net increase in derivative liabilities totaling $213,957 which has been recorded as a loss on derivative liabilities in the Company’s statement of operations.

Based on the various convertible promissory notes described in Note 4, the fair value of applicable derivative liabilities on notes and the change in fair value of derivative liabilities are as follows for the three months ended March 31, 2024:

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

The fair value of the derivative liabilities – convertible promissory notes is estimated using a Lattice pricing model with the following assumptions:

	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	%

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2024

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 7.RELATED PARTY TRANSACTIONS

In January 2023, the Company issued one share of Series B Preferred stock to the Company’s CEO. Compensation expense of $400,000 has been recorded as selling, general and administrative expense in the accompanying statement of operations. The fair value of the Series B Preferred stock was calculated in accordance with fair value defined by the Financial Accounting Standards Board (“FASB”) in ASC 820 – Fair Value Measurements and Disclosures (“ASC 820”) based on the market approach.

The Company paid the Company’s CEO a bonus of $0 and $10,000 during the three months ended March 31,2024 and 2023, respectively.

Effective July 15, 2023, the Company’s board of directors executed a resolution whereby the CEO’s salary shall be reduced from $365,000 to $265,000 per year, with unpaid sums being accrued on the books of the Company and subject to an option in favor of the CEO to elect to convert the unpaid sums into shares of Company common stock. Accrued salary totaling $64,154 has been recorded as of March 31, 2024 and may be converted at any time into shares of the Company’s common stock at a discount of 25% of the market value on the date of conversion.

In February 2023, the Company entered into a one-year consulting agreement under the Company’s Employee and Consultant Stock Ownership Plan, with an advisor and director in exchange for compensation of 35 million shares of common stock at a basis of $0.01 per share. The value of the compensation totaling $315,000 has been recorded in selling, general and administrative expenses in the Company’s statement of operations. The fair market value of the shares was determined based on the Company’s closing price on the date of issuance. The agreement includes a registration requirement. Compensation totaling $5,000 per month has been recorded for the advisor as board of director fees for the three months ended March 31, 2023.On July 1, 2023, the advisor resigned from the board.

Compensation totaling $5,000 per month has been recorded for an employee as board of director fees for the three -month period ended March 31, 2024.

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STOCKHOLDERS' DEFICIT

3 Months Ended

Mar. 31, 2024

STOCKHOLDERS' DEFICIT

STOCKHOLDERS' DEFICIT

NOTE 8.STOCKHOLDERS’ DEFICIT

During the three months ended March 31, 2024, holders of convertible promissory notes converted $23,661 of principal into 23,196,579 shares of common stock at $0.00102 per share.

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STOCK OPTIONS AND WARRANTS

3 Months Ended

Mar. 31, 2024

STOCK OPTIONS AND WARRANTS

STOCK OPTIONS AND WARRANTS

NOTE 9.STOCK OPTIONS AND WARRANTS

Stock Options

In 2017, the Company’s Board of Directors approved the 2017 Employee and Consultant Stock Ownership Plan, (the “Plan”). The Plan provides that the Board of Directors may grant stock units, incentive stock options and non-statutory stock options to officers, key employees and certain consultants and advisors to the Company up to a maximum of 50,000,000 shares. Stock options granted under the Plan have ten-year terms with vesting terms to be determined by the administrator of the Plan. Stock unit grant terms will be set by the administrator and at the discretion of the administrator, be settled in cash, shares, or a combination of both. All options have expired.

No options were granted during the three months ended March 31, 2024.

Warrants

As of March 31, 2024, 160,500,000 outstanding warrants were cancelled without consideration in conjunction with a settlement agreement. See Note 4.

The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at March 31, 2024:

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

The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at December 31, 2023:

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

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2024

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 10.COMMITMENTS AND CONTINGENCIES

Commitments

The Company has entered into a product development agreement with remaining payments totaling approximately $300,000. The agreement requires that approximately $150,000 of the payments be made in conjunction with certain development milestones which the Company expects to meet over the next twelve months. The remainder is to be paid in conjunction with future new product sales.

In September 2023, the Company entered into an operating lease for its office location. The lease provides for a base rent of $5,280 per month through September 30, 2026. The lease may be renewed for one three-year period. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 12.4% within the calculation. Rent expense totaled $16,236 under the current lease during the three months ended March 31, 2024.

The following outlines the maturities of our operating lease liabilities for the periods ending March 31,

2025	$	65,757
2026	$	67,730
2027	$	34,366
Total lease payments	$	167,853
Less imputed interest	$	(24,420)
Total	$	143,433

Contingencies

The Company is subject to various loss contingencies and assessments arising in the normal course of the business, some of which relate to litigation, claims, property taxes, and sales and use tax or goods and services tax assessments. The Company considers the likelihood of the loss or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies and assessments. An estimated loss contingency or assessment is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Management regularly evaluates current information available to them to determine whether such accruals should be adjusted. Currently, there are no pending court actions, or arbitration claims filed against the company that may reasonably be determined, as of the date of this filing, to exceed $5,000 individually or in the aggregate.

As of March 31, 2024, the Company is in default of two matured convertible promissory notes, including defaults resulting from the Company’s sale of its real property on March 15, 2023, issued to two lenders on March 10, 2022, and August 8, 2022, with principal and interest due in the amounts of $342,070 and $145,354, respectively. The convertible notes included a cross-default and a cross-default provision which required the Company to remit payment of principal, accrued interest, default interest, and legal fees, multiplied by 125% and 150%, respectively. The amount of $158,000 in default penalties has been accrued and recorded in the Company’s balance sheet as of March 31,2024, for these lenders. On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. The Company is in negotiations with the other lender to reform the note in default. See Note 11.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 11.SUBSEQUENT EVENTS

The Company has evaluated subsequent events that have occurred through the date of this filing and determined that there were no subsequent events or transactions that required recognition or disclosure in the financial statements, except as disclosed below.

On April 3, 2024, the Company entered into a settlement agreement with the lender of the March 10,2022 convertible promissory note. Principal of $305,501 and accrued interest of $36,971 are covered by the agreement and subject to the following settlement terms:

● Any and all outstanding warrants are to be cancelled without consideration.

● The maturity date has been extended to September 25, 2025.

● Interest rate is capped at 12% per annum.

● Default penalties accrued up to the settlement date are no longer due and from the effective date forward are amended to 115% from 125%.

● All payments will be applied first to outstanding principal and will include the note holders’ pro-rata share of $400 per unit, from futures sales of the Company’s Wellness ProPlus Infinity units.

● Conversions of outstanding principal are limited to $30,000 per calendar month through December 31, 2024, and may be waived under certain conditions and after such date.

As of June 15, 2024, holders of convertible promissory notes converted $81,222 of principal into 79,629,143 shares of common stock at $0.00102 per share.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Method

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. We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation. 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, 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the full year.

Use of Estimates

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

Going Concern

Since inception, the Company has incurred approximately $24.6 million of accumulated net losses. In addition, during the three months ended March 31, 2024, the Company used $158,361 in operations and had a working capital deficit of $3,726,900. These factors, among others, 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 twelve 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 entity 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 at March 31, 2024.

Revenue Recognition

Revenue Recognition

Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product and when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities, allowance for estimated returns, chargebacks, and markdowns based upon management’s estimates and the Company’s historical experience. The Company’s liability for sales return refunds is recognized within other current liabilities, and an asset for the value of inventory which is expected to be returned is recognized within other current assets on the balance sheets. The Company generally allows a 30 day right of return to its customers. As of both March 31, 2024 and December 31, 2023 the sales returns allowance was $6,990.

Certain larger customers pay in advance for future shipments. These advance payments totaled $185,275 and $197,325 at March 31, 2024 and December 31, 2023, respectively, and are recorded as customer deposits in the accompanying balance sheets. Revenue related to these advance payments is recognized upon shipment to the distributor or the end-customer.

At the completion of the initial three-year warranty, the Company sells extended warranties for periods ranging from one to three years. Revenue is recognized on a straight-line basis over the term of the contract. At March 31, 2024 and December 31, 2023, deferred revenue of $17,424 and $20,787 is recorded, respectively, in current and long-term liabilities in the accompanying balance sheets, in connection with these extended warranties.

Financial Instruments and Concentrations of Business and Credit Risk

Financial Instruments and Concentrations of Business and Credit Risk

The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk.

The Company’s accounts receivable, which are unsecured, expose the Company to credit risks such as collectability and business risks such as customer concentrations. The Company mitigates credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic review of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. The Company mitigates business risks by attempting to diversify its customer base.

Significant customer sales as a percentage of total sales are as follows:

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Customer A	34.8	%	18.8	%
Customer B	14.9	%	10.2	%
Customer F	11.2	%	—

Amounts due these customers totaled $14,142 and $12,442 at March 31, 2024 and December 31, 2023, respectively for commissions and reimbursements. Amounts due from these customers, totaled $297 and $594 at March 31, 2024 and December 31, 2023, respectively. Customer deposits on hand from these customers totaled $58,900 and $70,950 at March 31, 2024 and December 31, 2023, respectively. The loss of these customers would have a significant impact on the operations and cash flows of the Company.

The Company’s supplier concentrations expose the Company to business risks, which the Company mitigates by attempting to diversify its supply chain. Significant supplier purchases as a percentage of total inventory purchases are as follows:

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Supplier A	69.9	%	64.0	%
Supplier D	—		25.5	%
Supplier F	17.8	%	—

There were no amounts outstanding due these suppliers at March 31, 2024 and December 31, 2023. The loss of key vendors may have a significant impact on the operations and cash flows of the Company.

The estimated fair value of financial instruments has been determined using available market information and appropriate valuation methodologies. However, considerable judgment is often required to interpret market data used to develop the estimates of fair value. Accordingly, the estimates presented may not be indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.

Disclosure of Fair Value

The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below:

● Cash and cash equivalents are carried at cost, which approximates fair value.

● The carrying amounts of receivables approximate fair value due to their short-term maturities.

● The carrying amounts of payables approximate fair value due to their short-term maturities.

● Derivative liabilities are adjusted to fair value utilizing the Lattice method

Asset and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability

Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

The Company’s convertible promissory notes contain variable conversion provisions upon default, Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and shares to be issued were recorded as derivative liabilities on the default dates.

The following table presents changes during the three months ended March 31, 2024 in Level 3 liabilities measured at fair value on a recurring basis:

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

The levels of the fair value hierarchy into which the Company’s assets and liabilities fall as of March 31, 2024, are as follows:

	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

Inventories

Inventories

Inventories are stated at the lower of cost or market. Cost is determined based on the first-in, first-out cost flow assumption (“FIFO”) while market is determined based upon the estimated net realizable value less an allowance for selling and distribution expenses and a normal gross profit. The Company evaluates the need for inventory reserves associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis. As of March 31, 2024 and December 31, 2023, the Company believes there are no excess and obsolete inventories and accordingly, did not record an inventory reserve. Inventories consist of purchased finished goods.

Sales Taxes

Sales Taxes

Sales taxes for the three-month periods ended March 31, 2024 and 2023, were recorded on a net basis. Included in accrued expenses at both March 31, 2024 and December 31, 2023 is approximately $61,000 related to sales taxes.

Warranty

Warranty

The Company warranties the sale of most of its products and records an accrual for estimated future claims. The standard warranty is typically for a period of three years. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The Company recorded a liability as of March 31, 2024 and December 31,2023 of $15,595 and $16,642, respectively. The expense is included in cost of sales in the statements of operations and within accrued expenses on the accompanying balance sheets.

Lease Commitment

Lease Commitment

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. Lease expense for variable lease components are recognized when the obligation is probable. Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company’s lease, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments.

The lease term for the Company’s lease includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. The Option for the lease renewal has been excluded from the lease term (and lease liability) for the Company’s lease as the reasonably certain threshold is not met.

Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain.

Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company’s statement of operations in the same line as expense arising from fixed lease payments. As of March 31, 2024, management determined that there were no variable lease costs.

Net Loss per Share

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of March 31, 2024 and December 31, 2023, diluted net loss per share is the same as basic net loss per share for each period.

Conversion of outstanding warrants, certain accrued liabilities and convertible promissory notes at March 31, 2024 may result in an estimated 1,690,762,268 additional shares of common stock outstanding. At March 31, 2024, there are 1,999,000,000 common shares authorized and 486,482,787 outstanding. Management has agreed to amend its shares outstanding to meet the future requirements resulting from any of the above conversions.

COVID-19

COVID-19

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the COVID-19 include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19, and actions taken to mitigate it, have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, COVID-19 has had an adverse effect on our business, including our supply chains and distribution systems. While we are taking diligent steps to mitigate disruptions to our supply chain, we are unable to predict the extent or nature of these impacts at this time to our future financial condition and results of operations.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of significant customer sales as a percentage of total sales

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Customer A	34.8	%	18.8	%
Customer B	14.9	%	10.2	%
Customer F	11.2	%	—

Schedules of supplier purchases as percentage of total inventory purchases

	THREE MONTHS ENDED MARCH 31,
	2024		2023
Supplier A	69.9	%	64.0	%
Supplier D	—		25.5	%
Supplier F	17.8	%	—

Schedule of level 3 liabilities measured at fair value on a recurring basis

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

Schedule of fair value hierarchy of assets and liabilities

	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

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2024

PROPERTY AND EQUIPMENT

Schedule of property and equipment

	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

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NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2024

NOTES PAYABLE

Schedule of convertible promissory note

	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

The Net Notes balance at March 31, 2024 is comprised of the following:

	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

The Net Notes balance at December 31, 2023 is comprised of the following:

	Principal		Debt Discount		Net
Pre 2020	$	50,000	$	—	$	50,000
October 2021		73,336		—		73,336
February 2022		44,882		—		44,882
March 2022		305,500		—		305,500
August 2022		105,500		—		105,500
September 2022		814,383		—		814,383
	$	1,393,601	$	—	$	1,393,601

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DERIVATIVE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2024

DERIVATIVE LIABILITIES

Schedule of fair value of derivative liabilities

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

Schedule of fair value of the derivative liabilities - convertible promissory notes

	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	%

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STOCK OPTIONS AND WARRANTS (Tables)

3 Months Ended

Mar. 31, 2024

STOCK OPTIONS AND WARRANTS

Summary of outstanding warrants to purchase common stock

The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at March 31, 2024:

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

The following table summarizes the information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable at December 31, 2023:

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

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2024

COMMITMENTS AND CONTINGENCIES

Schedule of maturities of our operating lease liabilities

The following outlines the maturities of our operating lease liabilities for the periods ending March 31,

2025	$	65,757
2026	$	67,730
2027	$	34,366
Total lease payments	$	167,853
Less imputed interest	$	(24,420)
Total	$	143,433

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Going Concern (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accumulated net losses	$ 24,600,000
Cash used in operating activities	(158,361)	$ (452,736)
Working capital deficit	$ 3,726,900

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Right of return period	30 days
Sales returns allowance	$ 6,990	$ 6,990
Customer deposits	$ 185,275	197,325
Initial warranty period	3 years
Deferred revenue	$ 17,424	$ 20,787
Minimum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Extended warranty period	1 year
Maximum
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Extended warranty period	3 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial Instruments and Concentrations of Business and Credit Risk (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Amount due from customers	$ 14,142		$ 12,442
Due from customers	297		594
Customer deposits on hand	$ 58,900		70,950
Net Sales | Customer A | Customer concentration
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	34.80%	18.80%
Net Sales | Customer B | Customer concentration
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	14.90%	10.20%
Net Sales | Customer F | Customer concentration
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	11.20%
Net purchase | Supplier concentrations
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Amount due to suppliers	$ 0		$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplier Purchases as a Percentage of Total Inventory Purchases (Details) - Purchases - Supplier concentrations	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Supplier A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	69.90%	64.00%
Supplier D
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage		25.50%
Supplier F
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	17.80%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sales tax payable	$ 61,000	$ 61,000
Standard warranty period	3 years
Warranty liability	$ 15,595	$ 16,642
Variable lease cost	$ 0
Additional shares of common stock outstanding	1,690,762,268
Common stock, shares authorized	1,999,000,000	1,999,000,000
Common stock, shares outstanding	486,482,787	463,286,208

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Changes in Level 3 liabilities measured at fair value on a recurring basis (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Liabilities measured at fair value on a recurring basis
Fair value, Beginning balance	$ 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, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change In Fair Value Of Derivative Liabilities
Fair value, Ending balance	$ 1,408,002

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disclosure of Fair Value (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Derivative liabilities- convertible promissory notes	$ 1,408,002	$ 532,334
Total fair value	1,408,002
Level 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Derivative liabilities- convertible promissory notes	0
Total fair value	0
Level 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Derivative liabilities- convertible promissory notes	0
Total fair value	0
Level 3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Derivative liabilities- convertible promissory notes	1,408,002
Total fair value	$ 1,408,002

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PROPERTY AND EQUIPMENT - Summary of Property and Equipment (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
PROPERTY AND EQUIPMENT
Total	$ 174,692	$ 174,692
Less: accumulated depreciation and amortization	(24,987)	(24,987)
Property and equipment	149,705	149,705
Tooling
PROPERTY AND EQUIPMENT
Total	149,705	149,705
Furniture and equipment
PROPERTY AND EQUIPMENT
Total	$ 24,987	$ 24,987

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PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($)		3 Months Ended
	Mar. 15, 2023	Mar. 31, 2024	Mar. 31, 2023
PROPERTY AND EQUIPMENT
Sale of property and equipment			$ 1,894,588
Gain on sale of fixed asset	$ 1,193,676		1,193,676
Depreciation and amortization expense		$ 0	$ 4,557
Bank debt | Building
PROPERTY AND EQUIPMENT
Proceeds from sale of building	2,000,000
Sale of property and equipment	$ 1,363,818

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NOTES PAYABLE - Convertible promissory notes (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
NOTES PAYABLE
Principal balance	$ 1,648,204	$ 1,393,601
Debt discount balance	(18,645)
Net Notes balance	$ 1,629,559	$ 1,393,601

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NOTES PAYABLE - Net Notes balance (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
NOTES PAYABLE
Principal	$ 1,648,204	$ 1,393,601
Debt discount balance	(18,645)
Net	1,629,559	1,393,601
Pre 2020
NOTES PAYABLE
Principal	50,000	50,000
Net	50,000	50,000
October 2021
NOTES PAYABLE
Principal	90,639	73,336
Net	90,639	73,336
February 2022
NOTES PAYABLE
Principal	29,573	44,882
Net	29,573	44,882
March 2022
NOTES PAYABLE
Principal	305,501	305,500
Net	305,501	305,500
August 2022
NOTES PAYABLE
Principal	105,500	105,500
Net	105,500	105,500
September 2022
NOTES PAYABLE
Principal	917,491	814,383
Net	917,491	$ 814,383
March 2024
NOTES PAYABLE
Principal	149,500
Debt discount balance	(18,645)
Net	$ 130,855

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NOTES PAYABLE - Additional Information (Details)			1 Months Ended	3 Months Ended		12 Months Ended
	Aug. 08, 2022 USD ($)	Mar. 10, 2022 USD ($)	Mar. 31, 2024 USD ($) D $ / shares	Mar. 31, 2024 USD ($) $ / shares	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
NOTES PAYABLE
Principal amount due			$ 932,601
Maturity date			Sep. 25, 2025
Capped interest rate			12.00%	12.00%
Payment of principal per units | $ / shares			$ 600
Principal amount of convertible notes converted				$ 20,877	$ 50,000
Debt default penalty amount						$ 251,000
Converted of principal amount			$ 30,000
Accrued interest			128,763	128,763
Net			$ 1,629,559	1,629,559		$ 1,393,601
Maximum
NOTES PAYABLE
Interest Rate During Period			125.00%
Minimum
NOTES PAYABLE
Interest Rate During Period			115.00%
Convertible promissory notes
NOTES PAYABLE
Outstanding balance of debt			$ 149,500	$ 149,500
Principal and interest due amount	$ 145,354	$ 342,070	$ 18,604
Accrued and default interest on payment (as a percent)			125.00%	125.00%
Legal fees payment (as a percent)			150.00%	150.00%
Debt default penalty amount				$ 158,000
Converted of principal amount				$ 23,661
Conversion price per share (in dollars per share) | $ / shares			$ 0.00102	$ 0.00102
Proceeds from Issuance of Debt			$ 130,000
Original issue discount			$ 19,500
Interest rate (as a percent)			12.00%	12.00%
Net			$ 167,440	$ 167,440
Percentage of discount on conversion of note			35.00%
Threshold trading days | D			10

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LONG-TERM DEBT (Details) - Government Debt - USD ($)	1 Months Ended	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2024	Mar. 31, 2023
LONG-TERM DEBT
Proceeds from issuance of long-term debt	$ 150,000
Interest rate (as a percent)	3.75%
Debt instrument deferment period	30 months
Payment of principal and interest	$ 731
Interest expenses		$ 1,402	$ 1,387

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DERIVATIVE LIABILITIES - Fair value of derivative liability (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
DERIVATIVE LIABILITIES
Fair value, Beginning balance	$ 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, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change in fair value of derivative liabilities
Fair value, Ending balance	$ 1,408,002

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DERIVATIVE LIABILITIES - Lattice pricing (Details)	Mar. 31, 2024 Y $ / shares
Market value of common stock
DERIVATIVE LIABILITIES
Derivative liability, measurement input | $ / shares	0.0009
Minimum | Expected volatility
DERIVATIVE LIABILITIES
Derivative liability, measurement input	1.812
Minimum | Expected term (in years)
DERIVATIVE LIABILITIES
Derivative liability, measurement input	0.27
Minimum | Risk-free interest rate
DERIVATIVE LIABILITIES
Derivative liability, measurement input	0.0491
Maximum | Expected volatility
DERIVATIVE LIABILITIES
Derivative liability, measurement input	2.003
Maximum | Expected term (in years)
DERIVATIVE LIABILITIES
Derivative liability, measurement input	1.5
Maximum | Risk-free interest rate
DERIVATIVE LIABILITIES
Derivative liability, measurement input	0.0498

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RELATED PARTY TRANSACTIONS (Details) - USD ($)			1 Months Ended		3 Months Ended
	Jul. 15, 2023	Jul. 14, 2023	Feb. 28, 2023	Jan. 31, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
RELATED PARTY TRANSACTIONS
Common stock, per share					$ 0.00001		$ 0.00001
Value of compensation expenses						$ 315,000
Selling, general and administrative expenses
RELATED PARTY TRANSACTIONS
Compensation expense				$ 400,000
Value of compensation expenses			$ 315,000
Consulting agreement | Advisor | Employee and consultant stock ownership plan
RELATED PARTY TRANSACTIONS
Term of consulting agreement			1 year
Number of compensation shares of common stock			35,000,000
Common stock, per share			$ 0.01
Related party | Employee
RELATED PARTY TRANSACTIONS
Compensation fee per month as board of director fee					$ 5,000
Related party | Advisor
RELATED PARTY TRANSACTIONS
Compensation fee per month as board of director fee					5,000
CEO
RELATED PARTY TRANSACTIONS
Cash Bonus paid					0	$ 10,000
Salary	$ 265,000	$ 365,000
Accrued salary					$ 64,154
Percentage of discount when accrued salary converts to shares					25.00%
CEO | Series B Preferred Stock
RELATED PARTY TRANSACTIONS
Number of shares issued				1

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STOCKHOLDERS' DEFICIT (Details)	1 Months Ended	3 Months Ended
	Mar. 31, 2024 USD ($) $ / shares	Mar. 31, 2024 USD ($) $ / shares shares
STOCKHOLDERS' DEFICIT
Principal amount	$ 30,000
Convertible notes payable
STOCKHOLDERS' DEFICIT
Principal amount		$ 23,661
Shares issued upon conversion | shares		23,196,579
Conversion price per share (in dollars per share) | $ / shares	$ 0.00102	$ 0.00102

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STOCK OPTIONS AND WARRANTS (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2017
STOCK OPTIONS AND WARRANTS
Number of shares authorized to be issued under the Plan		50,000,000
Term of the awards granted		10 years
Number of stock options granted	0
Number of outstanding warrants cancelled	160,500,000

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STOCK OPTIONS AND WARRANTS - Warrants (Details) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
STOCK OPTIONS AND WARRANTS
Number Outstanding	16,167,533	176,838,431
Exercise price 0.00102
STOCK OPTIONS AND WARRANTS
Exercise Price		$ 0.00102
Number Outstanding		170,898
Exercise Price 0.52
STOCK OPTIONS AND WARRANTS
Exercise Price	$ 0.52	$ 0.52
Number Outstanding	100,000	100,000
Exercise Price 0.025
STOCK OPTIONS AND WARRANTS
Exercise Price	$ 0.025	$ 0.025
Number Outstanding	9,000,000	9,000,000
Exercise price 0.025 Two
STOCK OPTIONS AND WARRANTS
Exercise Price	$ 0.025	$ 0.025
Number Outstanding	450,000	450,000
Exercise price 0.00102 One
STOCK OPTIONS AND WARRANTS
Exercise Price	$ 0.00102	$ 0.00102
Number Outstanding	3,336,843	3,336,843
Exercise price 0.00102 Two
STOCK OPTIONS AND WARRANTS
Exercise Price	$ 0.00102	$ 0.00102
Number Outstanding	2,780,690	2,780,690
Exercise price 0.00102 Three
STOCK OPTIONS AND WARRANTS
Exercise Price	$ 0.00102	$ 0.00102
Number Outstanding	500,000	500,000
Exercise price 0.00102 Four
STOCK OPTIONS AND WARRANTS
Exercise Price		$ 0.00102
Number Outstanding		12,500,000
Exercise price 0.00102 Five
STOCK OPTIONS AND WARRANTS
Exercise Price		$ 0.00102
Number Outstanding		148,000,000

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COMMITMENTS AND CONTINGENCIES (Details)	1 Months Ended		3 Months Ended
	Mar. 31, 2024 USD ($) item	Sep. 30, 2023 USD ($)	Mar. 31, 2024 USD ($) item
COMMITMENTS AND CONTINGENCIES
Commitment for product development			$ 300,000
Amount for product development paid			$ 150,000
Renewal term (in years)		3 years
Borrowing rate (in percent)	12.40%		12.40%
Rent expense			$ 16,236
Effective borrowing rate	12.00%		12.00%
Principal amount due	$ 932,601
Expected milestone term (in months)			12 months
Base rent per month		$ 5,280
Number of filed pending court actions | item	0		0
Estimated loss from claims	$ 5,000		$ 5,000
Convertible promissory notes
COMMITMENTS AND CONTINGENCIES
Accrued interest			145,354
Total default penalties	158,000		$ 158,000
Principal interest rate during the period			125.00%
Accrued interest rate during period			150.00%
Principal amount due			$ 342,070
Convertible promissory notes
COMMITMENTS AND CONTINGENCIES
Principal amount	$ 149,500		$ 149,500

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COMMITMENTS AND CONTINGENCIES - Maturities of our operating lease liabilities (Details)	Mar. 31, 2024 USD ($)
Maturities of operating lease liabilities
2025	$ 65,757
2026	67,730
2027	34,366
Total lease payments	167,853
Less imputed interest	(24,420)
Total	$ 143,433
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Commitments and Contingencies.

XML

SUBSEQUENT EVENTS (Details)			1 Months Ended	3 Months Ended
	Jun. 15, 2024 USD ($) item $ / shares	Apr. 03, 2024 USD ($) $ / shares	Mar. 31, 2024 USD ($) $ / shares	Mar. 31, 2024 USD ($) $ / shares	Mar. 31, 2023 USD ($)
SUBSEQUENT EVENTS
Principal amount due			$ 932,601
Maturity date			Sep. 25, 2025
Capped interest rate			12.00%	12.00%
Payment of principal per units | $ / shares			$ 600
Principal amount of convertible notes converted				$ 20,877	$ 50,000
Minimum
SUBSEQUENT EVENTS
Interest Rate During Period			115.00%
Maximum
SUBSEQUENT EVENTS
Interest Rate During Period			125.00%
Convertible promissory notes
SUBSEQUENT EVENTS
Price per share of debt converted | $ / shares			$ 0.00102	$ 0.00102
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
Principal amount due		$ 305,501
Accrued interest		$ 36,971
Maturity date		Sep. 25, 2025
Capped interest rate		12.00%
Payment of principal per units | $ / shares		$ 400
Principal amount of convertible notes converted		$ 30,000
SUBSEQUENT EVENTS | Minimum
SUBSEQUENT EVENTS
Interest Rate During Period		115.00%
SUBSEQUENT EVENTS | Maximum
SUBSEQUENT EVENTS
Interest Rate During Period		125.00%
SUBSEQUENT EVENTS | Convertible promissory notes
SUBSEQUENT EVENTS
Number of shares agreed to be issued | item	79,629,143
Amount of note payable	$ 81,222
Price per share of debt converted | $ / shares	$ 0.00102