United Health Products, Inc 10-Q for FY2023 Q3
United Health Products, Inc. (UEEC)
About this 10-Q
United Health Products, Inc filed this 10-Q on November 13, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).
Headline figures
Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $37.5K a year earlier
- Net loss
- $485.73K
- compared with net income of $820.57K a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact name of Company as specified in its charter) |
| ||
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
| ||
(Address of Company’s principal executive offices) |
| (Zip Code) |
(
(Company’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12 (b) of the Act: 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.
Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the 12 preceding months (or such shorter period that the registrant was required to submit such file).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition 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 | ☐ |
☒ | Smaller reporting company | ||
| Emerging growth company |
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
The number of shares issued and outstanding of the Registrant’s Common Stock, as of November 9, 2023 was
UNITED HEALTH PRODUCTS, INC.
FORM 10-Q QUARTERLY REPORT
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION | ||||
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Item 1. | Financial Statements (Unaudited) | |||
| Condensed Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022 | 3 | ||
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | |||
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| 2 |
| Table of Contents |
UNITED HEALTH PRODUCTS, INC.
Condensed Balance Sheets
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
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Inventory |
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Prepaid and other current assets |
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Total current assets |
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Deferred offering costs |
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Operating lease right-of-use asset |
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Security deposit |
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Patents, net |
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TOTAL ASSETS |
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Current Liabilities |
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Accounts payable and accrued expenses |
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Accrued liabilities - related parties |
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Accrued litigation settlement |
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Operating lease liability - current |
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Promissory note payable |
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Loans payable – related parties |
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Convertible notes payable, net of debt discount |
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Convertible notes payable – related party, net of debt discount |
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Total current liabilities |
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Operating lease liability – long-term |
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TOTAL LIABILITIES |
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Commitments and Contingencies |
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Stockholders’ Deficit |
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Series A Convertible Preferred Stock - $ |
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Common Stock - $ |
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Subscription Receivable |
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Additional Paid-In Capital |
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Accumulated Deficit |
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Total Stockholders’ Deficit |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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See notes to unaudited condensed financial statements.
| 3 |
| Table of Contents |
UNITED HEALTH PRODUCTS, INC.
Condensed Statements of Operations
(Unaudited)
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| For the Three Months Ended September 30, |
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| For the Nine Months Ended September 30, |
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Revenues |
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Cost of goods sold |
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Gross Profit |
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Operating Costs and Expenses |
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Selling, general and administrative expenses |
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Research and development |
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Total Operating Expenses |
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Loss from Operations |
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Other Income (Expenses) |
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Interest expense |
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Interest expense – related party |
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Loss on settlement of debt |
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Other income |
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Total Other Income (Expenses) |
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Net Income (Loss) |
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Net Income (Loss) per common share: |
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Basic |
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Diluted |
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Weighted average number of shares outstanding: |
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Basic |
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Diluted |
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See notes to unaudited condensed financial statements.
| 4 |
| Table of Contents |
UNITED HEALTH PRODUCTS, INC
Condensed Statement of Stockholders’ Deficiency
Three and Nine Months Ended September 30, 2023 and September 30, 2022
(Unaudited)
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| Additional |
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| Common Stock |
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| Amount |
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| Capital |
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| Receivable |
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| Deficit |
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| Total |
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Balance at December 31, 2021 |
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Issuance of common stock for services |
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Sale of common stock |
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Common stock issued to settle accounts payable and accrued liabilities |
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Net Loss |
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Balance at March 31, 2022 |
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Issuance of common stock for services |
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Issuance of common stock for services – related party |
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Common stock issued to settle accounts payable and accrued liabilities |
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Common stock issued to settle accounts payable and accrued liabilities – related party |
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Cancellation of common stock |
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Net Loss |
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Balance at June 30, 2022 |
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Issuance of common stock for services |
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Issuance of common stock for services – related party |
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Common stock issued to settle accounts payable and accrued liabilities |
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Common stock repurchased and cancelled |
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Sale of common stock |
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Common stock issued for commitment fee |
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Net income |
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Balance at September 30, 2022 |
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| 5 |
| Table of Contents |
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| Additional |
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| Common Stock |
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| Shares |
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| Amount |
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Balance at December 31, 2022 |
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Sale of common stock |
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Common stock issued to settle accrued liabilities – related party |
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Common stock issued to settle accrued liabilities |
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Common stock issued for a stock subscription receivable |
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Amortization of deferred offering costs |
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|
|
Common stock issued for litigation settlement |
|
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| ||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
|
|
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|
|
|
|
|
|
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|
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|
|
|
|
|
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|
Balance at March 31, 2023 |
|
|
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|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |||
|
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|
|
|
|
|
|
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|
|
|
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|
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|
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|
Sale of common stock |
|
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| ||||||
|
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|
Common stock issued to settle accrued liabilities – related party |
|
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| ||||||
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Common stock issued to settle accrued liabilities |
|
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| ||||||
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Common stock issued for a stock subscription receivable |
|
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| ( | ) |
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| |||||
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|
|
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Amortization of deferred offering costs |
|
| - |
|
|
|
|
|
| ( | ) |
|
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| ( | ) | |||
|
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|
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|
|
|
|
|
|
|
Net Loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
|
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|
|
|
|
|
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|
Balance at June 30, 2023 |
|
|
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|
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|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |||
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Sale of common stock |
|
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| ||||||
|
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|
|
|
|
|
Amortization of deferred offering costs |
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
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| ( | ) | |||
|
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|
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Net loss |
|
| - |
|
|
|
|
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|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
|
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|
Balance at September 30, 2023 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||
See notes to unaudited condensed financial statements.
| 6 |
| Table of Contents |
UNITED HEALTH PRODUCTS, INC.
Condensed Statements of Cash Flows
(Unaudited)
|
| For the Nine Months Ended September 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Cash Flows from Operating Activities: |
|
|
|
|
|
| ||
Net (Loss) |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to Reconcile Net (Loss) to Net Cash Used In Operating Activities: |
|
|
|
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|
|
|
Stock for services and compensation |
|
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|
| ||
Amortization of debt discount |
|
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| ||
Amortization expense |
|
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|
| ||
Amortization of right-of-use asset |
|
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| ||
Stock received as other income |
|
|
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|
| ( | ) | |
Stock issued for litigation settlement |
|
|
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| ||
Loss on settlement of debt |
|
|
|
|
|
| ||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Inventory |
|
|
|
|
| ( | ) | |
Prepaid and other current assets |
|
| ( | ) |
|
| ( | ) |
Accounts payable and accrued expenses |
|
| ( | ) |
|
|
| |
Accrued liabilities – related party |
|
|
|
|
|
| ||
Accrued litigation settlement |
|
| ( | ) |
|
|
| |
Net Cash Used In Operating Activities |
|
| ( | ) |
|
| ( | ) |
|
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|
Cash Flows from Investing Activities: |
|
|
|
|
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|
|
Purchase of intangible assets |
|
|
|
|
| ( | ) | |
Security deposit |
|
| ( | ) |
|
|
| |
Net Cash Used in Investing Activities |
|
| ( | ) |
|
| ( | ) |
|
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|
Cash Flows from Financing Activities: |
|
|
|
|
|
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|
|
Proceeds from loan payable - related party |
|
|
|
|
|
| ||
Repayments on loan payable - related party |
|
| ( | ) |
|
| ( | ) |
Repayments on loan payable |
|
| ( | ) |
|
| ( | ) |
Repurchase of common stock |
|
|
|
|
| ( | ) | |
Payment of offering costs |
|
| ( | ) |
|
|
| |
Proceeds from sale of common stock |
|
|
|
|
|
| ||
Proceeds from convertible notes payable – related party |
|
|
|
|
|
| ||
Proceeds from convertible notes payable |
|
|
|
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|
| ||
Cash flow provided by financing activities |
|
|
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|
| ||
Increase in Cash and Cash Equivalents |
|
|
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|
| ||
Cash and Cash Equivalents – Beginning of period |
|
|
|
|
|
| ||
|
|
|
|
|
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|
|
CASH AND CASH EQUIVALENTS – END OF PERIOD |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ |
|
| $ |
| ||
Cash paid for income taxes |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Non-cash Investing & Financing Activities: |
|
|
|
|
|
|
|
|
Cancellation of common stock |
| $ |
|
| $ |
| ||
Amortization of deferred offering costs |
| $ |
|
| $ |
| ||
Initial recognition of operating lease right-of-use asset and operating lease liability |
| $ |
|
| $ |
| ||
Common stock issued to settle accrued liabilities – related party |
| $ |
|
| $ |
| ||
Accounts payable and accrued expenses paid with promissory note payable |
| $ |
|
| $ |
| ||
Common stock issued to settle accounts payable and accrued liabilities |
| $ |
|
| $ |
| ||
Accrued litigation settlement paid with loan payable |
| $ |
|
| $ |
| ||
Common stock issued for commitment fee |
| $ |
|
| $ |
| ||
Loans payable – related party converted to convertible notes payable – related party |
| $ |
|
| $ |
| ||
Debt discount related to original issue discount |
| $ |
|
| $ |
| ||
See notes to unaudited condensed financial statements.
| 7 |
| Table of Contents |
UNITED HEALTH PRODUCTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
Note 1. Organization and Basis of Preparation
United Health Products, Inc. (the “Company”) develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, HemoStyp®, is a neutralized, oxidized, regenerated cellulose derived from cotton and designed to absorb exudate/drainage from superficial wounds and help control bleeding. The Company in the process of seeking regulatory approval to sell our HemoStyp product line into the U.S. Class III and European Union CE Mark surgical markets.
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 28, 2023.
In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements for the interim period, have been included.
Note 2. Significant Accounting Policies
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred recurring net losses, negative working capital and operations have not provided cash flows. Additionally, the Company does not currently have sufficient revenue producing operations to cover its operating expenses and meet its current obligations. In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern. The Company intends to finance its future development activities and its working capital needs largely from the sale of equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Cash and Cash Equivalents
The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.
| 8 |
| Table of Contents |
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. Changes in the economic environment, financial markets, as well as in the healthcare industry, and any other parameters used in determining these estimates, could cause actual results to differ.
Fair Value Measurements
Accounting principles generally accepted in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2023 and 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of its HemoStyp product by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
The Company receives orders for its HemoStyp products directly from its customers. Revenues are recognized based on the agreed upon sales or transaction price with the customer when control of the promised goods are transferred to the customer. The transfer of goods to the customer and satisfaction of the Company’s performance obligation will occur either at the time when products are shipped or when the products arrive and are received by the customer. No discounts are currently offered by the Company. The Company does not provide an estimate for returns as there is no anticipation for any returns in the normal course of business.
Trade Accounts Receivable and Concentration Risk
We record accounts receivable at the invoiced amount and we do not charge interest. We review the accounts receivable by amounts due from customers that are past due, to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We will also maintain a sales allowance to reserve for potential credits issued to customers. We will determine the amount of the reserve based on historical credit issued.
| 9 |
| Table of Contents |
There were no provisions for doubtful accounts recorded at September 30, 2023 and December 31, 2022. The Company recorded $
Inventory
Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Inventory on the balance sheet consists of work-in process.
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||
Finished goods |
| $ |
|
| $ |
| ||
Total inventory |
| $ |
|
| $ |
| ||
During the nine months ended September 30, 2023 and 2022, the Company determined that $
Stock Based Compensation
The Company accounts for stock-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation expense for employees and non-employees is measured at the grant date fair value.
Per Share Information
Basic earnings per share are calculated using the weighted average number of common shares outstanding for the period presented. Diluted earnings per share is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. The dilutive effect of potential common shares is not reflected in diluted earnings per share because the Company incurred net losses for the three and nine months ended September 30, 2023 and for the nine months ended September 30, 2022 and the effect of including these potential common shares in the net loss per share calculations would be anti-dilutive.
| 10 |
| Table of Contents |
The total potential common shares as of September 30, 2023 included
The following represents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computation for the three months ended September 30, 2022:
|
| Net Income (Loss) |
|
| Shares |
|
| Per Share |
| |||
|
| (Numerator) |
|
| (Denominator) |
|
| Amount |
| |||
Basic EPS |
| $ |
|
|
|
|
| $ |
| |||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Convertible notes payable (interest expense) |
|
|
|
|
|
|
|
| ( | ) | ||
Restricted stock units |
|
|
|
|
|
|
|
|
| |||
Diluted EPS |
| $ |
|
|
|
|
| $ |
| |||
Patents
Patents are stated on the balance sheet at cost. Costs, such as filing fees with patent granting agencies and legal fees directly relating to those filings, incurred to file patent applications were capitalized when the Company believed that there was a high likelihood that the patent would be issued and there would be future economic benefit associated with the patent. These costs were amortized from the date of the patent application on a
Accumulated amortization as of September 30, 2023 and December 31, 2022 was $
Future Amortization Expense
Year |
| Amount |
| |
2023 (remaining) |
| $ |
| |
2024 |
|
|
| |
2025 |
|
|
| |
2026 |
|
|
| |
2027 |
|
|
| |
Thereafter |
|
|
| |
|
| $ |
| |
Impairment of Long-lived Assets
The Company applies the provisions of ASC 360, Property, Plant and Equipment, where applicable to all long-lived assets. ASC 360 addresses accounting and reporting for impairment and disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 360. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
When long-lived assets are sold or retired, the related cost and accumulated depreciation or amortization are removed from the accounts and any gain or loss is included in the results of operations. During the nine months ended September 30, 2023 and 2022, the Company determined no impairment was required.
| 11 |
| Table of Contents |
Deferred Offering Costs
Deferred offering costs represent specific incremental costs directly attributable to the offering of securities. The deferred offering costs are recorded as an offset to additional paid-in capital and charged against the proceeds received.
Advertising and Marketing Costs
Advertising and marketing expenses are expensed as incurred. The Company incurred $
Research and Development
The Company charges research and development costs to expense when incurred. The Company incurred $
Leases
The Company follows the provisions of ASC 842, and records right-of-use (“ROU”) assets and lease obligations for its operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. If the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.
The lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less.
New Accounting Pronouncements
The Company considers all new pronouncements and management has determined that there have been no recently adopted or issued accounting standards that had or will have a material impact on its financial statements.
| 12 |
| Table of Contents |
Note 3. Related Party Transactions
Convertible notes payable - related parties
During the year ended December 31, 2022, Brian Thom, the Company’s Chief Executive Officer, converted $
During the year ended December 31, 2022, Robert Denser, a Director of the Company, loaned the Company $
Interest expense – related party on the above convertible notes payable was $
Loans payable – related parties
During the year ended December 31, 2022, Kristofer Heaton, the Principal Financial Officer, loaned the Company $4,000 to pay for operating expenses. The loan had an interest rate of
Interest expense – related party on the above loan was $
Accrued liabilities – related parties
As of September 30, 2023 and December 31, 2022, $
Equity transactions
During the nine months ended September 30, 2023, the Company issued
| 13 |
| Table of Contents |
Note 4. Promissory Note Payable
During the year ended December 31, 2022, the Company entered into a $
During the nine months ended September 30, 2023, the Company paid the remaining principal balance of $9,136. As of September 30, 2023, the principal balance and accrued interest was $
During the nine months ended September 30, 2023, $
Interest expense on the above loans was $
Note 5. Convertible Notes
During the year ended December 31, 2022, the Company issued a $
Interest expense on the above convertible notes payable was $
Note 6. Issuances of Securities
Share issuances 2022
During the nine months ended September 30, 2022, the Company had the following common stock transactions:
| · | |
| · | |
| · | 300,000 shares of common stock with a fair value of $ |
| · | |
| · | |
| · | |
| · | |
| · |
Share repurchases 2022
During the nine months ended September 30, 2022, the Company paid $
| 14 |
| Table of Contents |
Share issuances 2023
During the nine months ended September 30, 2023, the Company had the following common stock transactions:
| · | |
| · | |
| · | |
| · |
Restricted stock units
As of September 30, 2023 and December, 31, 2022, the Company has
Management is unable to predict if or when a Covered Transaction or Triggering Event under the RSU Agreements governing the restricted stock units will occur and as of September 30, 2023, there was $
| 15 |
| Table of Contents |
Activity related to our restricted stock units during the three months ended September 30, 2023 was as follows:
|
|
|
| Weighted |
| |||
|
|
|
| Average |
| |||
|
|
|
| Grant |
| |||
|
| Number of |
|
| Date Fair |
| ||
|
| Units |
|
| Value |
| ||
Total awards outstanding at December 31, 2022 |
|
|
|
| $ |
| ||
Units granted |
|
| - |
|
| $ | - |
|
Units Exercised/Released |
|
| - |
|
| $ | - |
|
Units Cancelled/Forfeited |
|
| - |
|
| $ | - |
|
Total awards outstanding at September 30, 2023 |
|
|
|
| $ |
| ||
Note 7. Accrued Litigation Settlement
On June 15, 2022, the Security and Exchange Commission’s (SEC) investigation of the Company, initially reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, was settled through the filing of a consent judgment without the Company admitting or denying the SEC’s allegations. As part of the settlement, the Company was required to pay a civil penalty of $
| · | $ |
| · | $ |
| · | $ |
| · | $ |
During the nine months ended September 30, 2023, the Company amended its installment payment plan to the SEC related to its civil penalty.
The Company has made total payments of $
Note 8. Litigation
Effective as of March 31, 2023, a 2018 lawsuit filed by Philip Forman, against the Company and its former CEO relating to the validity of a June 25, 2015 Amendment to his November 10, 2014 Employment Agreement with the Company and claims for compensation on termination of his employment was settled. In the settlement, as full and complete consideration, the Company issued to Mr. Forman
| 16 |
| Table of Contents |
Note 9. Leases
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. On the commencement date of the lease, the Company recorded $
The components of lease expense and supplemental cash flow information related to the lease for the period are as follows:
|
| Nine Months Ended September 30, 2023 |
| |
Lease Cost |
|
|
| |
Operating lease cost (included in general and administrative in the Company’s statement of operations) |
| $ |
| |
|
|
|
|
|
Other Information |
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2023 |
| $ |
| |
Weighted average remaining lease term – operating leases (in years) |
|
| ||
Average discount rate – operating lease |
|
| % | |
The supplemental balance sheet information related to leases for the period is as follows:
|
| At September 30, 2023 |
|
| At December 31, 2022 |
| ||
Operating leases |
|
|
|
|
|
| ||
Remaining right-of-use assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Short-term operating lease liabilities |
| $ |
|
| $ |
| ||
Long-term operating lease liabilities |
| $ |
|
| $ |
| ||
Total operating lease liabilities |
| $ |
|
| $ |
| ||
Maturities of the Company’s undiscounted lease liabilities are as follows:
Year Ending |
| Operating Leases |
| |
2023 (Remaining) |
| $ |
| |
2024 |
|
|
| |
2025 |
|
|
| |
2026 |
|
|
| |
Total lease payments |
|
|
| |
Less: Imputed interest/present value discount |
|
| ( | ) |
Present value of lease liabilities |
| $ |
| |
Note 10. Subsequent Events
The Company has evaluated events from September 30, 2023, through the date whereupon the financial statements were issued and has determined that there are no material events that need to be disclosed except as follows:
The Company sold
The Company paid a total of $
| 17 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes appearing elsewhere in this quarterly report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under ‘Risk Factors’ in our annual report on Form 10-K for the fiscal year ended December 31, 2022, filed with SEC on March 28, 2023.
Company Overview
UHP develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, HemoStyp, is derived from cotton and designed to absorb exudate/drainage from superficial wounds and help control bleeding. We are in the process of seeking regulatory approval to sell our Hemostyp product line into the U.S. Class III and European CE Mark surgical markets.
Our HemoStyp Gauze Products
HemoStyp hemostatic gauze is a natural substance created from chemically treated cellulose derived from cotton. It is an effective hemostatic agent registered with the FDA for superficial use under a 510(k) approval obtained in 2012 to help control bleeding from open wounds and body cavities. The HemoStyp hemostatic material contains no chemical additives, thrombin, collagen or animal-derived products, and is hypoallergenic. When the product comes in contact with blood it expands slightly and quickly converts to a translucent gel that subsequently breaks down into glucose and salts. Because of its benign impact on body tissue and the fact that it degrades to non-toxic end products, HemoStyp does not impede the healing of body tissue as compared to certain competing hemostatic products. Laboratory testing has shown HemoStyp to be 100% absorbable in the human body within 24 hours, compared to days or weeks with competing organic regenerated cellulose products. A human trial conducted in 2019 and 2020 demonstrated the effectiveness of HemoStyp in vascular, thoracic and abdominal surgical procedures.
| 18 |
| Table of Contents |
HemoStyp hemostatic gauze is a flexible, silk-like material that is applied by placing the gauze onto the bleeding tissue. The supple material can be easily folded and manipulated as needed to fit the size of the wound or incision. In surface bleeding and surgical situations, the product quickly converts to a translucent gel that allows the physician or surgeon to monitor the coagulation process. The gel maintains a neutral pH level which avoids damaging the surrounding tissue. In superficial bleeding situations, HemoStyp can be bonded to an adhesive plastic bandage or integrated into a traditional gauze component to address a broad range of needs, including traumatic bleeding injuries and prolonged bleeding following hemodialysis.
Potential Target Markets
Our HemoStyp material is currently cut to several sizes and configuration and marketed as HemoStyp Gauze. While we have paused our commercial activities to focus on our Class III PMA application, our potential customer base includes, without limitation, the following:
| · | Hospitals and Surgery Centers for all Internal Surgical usage (in the event we obtain FDA Class III approval) |
| · | Hospitals, Clinics and Physicians for external trauma |
| · | EMS, Fire Departments and other First Responders |
| · | Military Medical Care Providers |
| · | Hemodialysis centers |
| · | Nursing Homes and Assisted Living Facilities |
| · | Dental and Oral & Maxillofacial Surgery Offices |
| · | Veterinary hospitals |
Primary Strategy
Our HemoStyp technology received an FDA 510(k) approval in 2012 for use in external or superficial bleeding situations and we believe there is an opportunity for HemoStyp products to address unmet needs in several medical applications that represent attractive commercial opportunities. However, the Class III surgical markets, both domestic and international, represent the most attractive market for our products due to the smaller number of competitors offering Class III approved hemostatic agents and the resulting premium pricing for products that can meet the demanding requirements of the human surgical environment. We believe that our extensive laboratory testing and our completed human trial indicate that the HemoStyp technology could successfully compete against established Class III market participants, and could gain a significant market share. There can be no assurance that an FDA Premarket Approval (PMA) will be granted.
In 2018, we made the decision to focus our efforts and resources on accessing these Class III markets to maximize the value potential of our HemoStyp products. The Class III PMA process required a substantial investment of time and resources so we made the strategic determination to deemphasize our sales and marketing to non-Class III markets in order to devote our full resources to the PMA process.
In anticipation of receiving a Class III PMA (which cannot be assured), we are evaluating paths to rapidly grow our revenue and profits in all potential market segments, with the objective of maximizing shareholder value. We do not intend to pursue the full commercialization of our products independently nor to remain an independent company in the long term. Options under consideration include (i) a sale or merger of the Company with an industry leader in the wound care and surgical device sectors, which may include a pre-sale collaboration on commercialization and distribution and (ii) one or more commercial partnerships with established market participants, without any specific, associated sale or merger transaction.
| 19 |
| Table of Contents |
The Company has been contacted by several medical technology companies that are active in the surgical equipment and hemostatic products sectors, and who have expressed an interest in the Company’s products and business strategy. We continue to to evaluate the potential commercial partnerships in anticipation of an FDA decision on our Class III PMA application. No assurances can be given that the Company will identify any commercialization candidate(s) or enter into a transaction.
Manufacturing and Packaging of our Products
The Company’s products will be manufactured to our specifications through a contract manufacturing arrangement with an FDA certified supplier that maintains stringent quality control protocols to assure the uniformity and quality of all of our gauze products. Information on the manufacturing process and our manufacturer’s facility has been submitted as part of our PMA submission. Our gauze products are cut to size, packaged and sterilized by service providers in the United States.
Patents and Trademarks
Our hemostatic gauze technology is protected through patents granted by the U.S. Patent and Trademark Office, which protection currently runs through 2029. In 2020 and 2021, we filed additional U.S. and International patents that protect the use of our NORC technology in a gel or hydrocolloid formulation.
On January 21, 2021, the U.S. Patent Office provided notification of publication of the Company’s patent application for the method of forming and using a hemostatic hydrocolloid. This publication does not imply any assurance of the receipt of the patent but establishes an obligation of any party that seeks to use the applicable method to pay royalties for the right to do so. The patent application for this process remains pending as of the date of this filing.
On February 11, 2021, the Company was notified that its application to establish global patent protection for the process of creating and deploying a hydrocolloid (or gel) format of its HemoStyp technology was accepted for publication under the procedures of the Patent Cooperation Treaty (“PCT”), an international patent law treaty which provides a unified procedure for filing a patent application in most foreign countries. We previously filed provisional patent applications for our HemoStyp hydrocolloid process in 2020. In January 2022 the Company initiated steps to register its hydrocolloid patent in the European common market and in additional foreign countries where we intend to commercialize any future HemoStyp gel formats. We can give no assurance that foreign registration of our patents will be granted in any of these jurisdictions.
The Company has registered trademarks and trademark applications for the following product formats:
| · | Boo Boo Strips |
| · | HemoStyp |
| · | The Ultimate Bandage |
| · | Hemostrips |
| · | CelluSTAT |
| · | Nik Fix |
| 20 |
| Table of Contents |
Results of Operations for the three months ending September 30, 2023 and 2022
The following table sets forth a summary of certain key financial information for the three months ended September 30, 2023 and 2022:
|
| For the Three Months Ended September 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Revenue |
| $ | - |
|
| $ | 37,500 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
| $ | - |
|
| $ | 18,856 |
|
|
|
|
|
|
|
|
|
|
Operating (expenses) |
| $ | (450,451 | ) |
| $ | (558,034 | ) |
|
|
|
|
|
|
|
|
|
Operating (loss) |
| $ | (450,451 | ) |
| $ | (539,178 | ) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
| $ | (35,281 | ) |
| $ | 1,359,745 |
|
|
|
|
|
|
|
|
|
|
Net income(loss) |
| $ | (485,732 | ) |
| $ | 820,567 |
|
|
|
|
|
|
|
|
|
|
Net loss per common share - basic and diluted |
| $ | (0.00 | ) |
| $ | 0.00 |
|
Three Months ended September 30, 2023 versus Three Months ended September 30, 2022
During the three months ended September 30, 2023 and 2022, the Company had $0 and $37,500 of revenues, respectively. The Company did not generate any revenues in the current quarter due to the continued focus of the Company’s capital and resources towards obtaining a Class III PMA.
Total operating expenses for the three months ended September 30, 2023 and 2022 were $450,451 and $558,034, respectively.
The decrease in operating expenses was primarily due to research and development expenses decreasing $93,217 to $121,761 during the three months ended September 30, 2023 from $214,978 in the three months ended September 30, 2022.
Other income (expense) for the three months ended September 30, 2023 and 2022 was $(35,281) and $1,359,745, respectively. The decrease in other income was due to a decrease in loss on settlement of debt of $14,000, a decrease in other income of $1,402,981 offset by an increase in total interest expense of $6,045. The decrease in other income is due to the Company having received $392,000 as a litigation settlement payment from its former auditor and the receipt of $202,200 in cash and 2,085,258 shares of common stock as payment of $808,781 from its former Chief Executive Officer to satisfy a disgorgement obligation during the three months September 30, 2022 and having $0 in other income during the three months ended September 30, 2023.
| 21 |
| Table of Contents |
Our net loss for the three months ended September 30, 2023 was $485,732 as compared to net income of $820,567 for the comparable period of the prior year. The increase in the net loss is due to the Company having a decrease in operating expenses of $107,583 offset by a decrease in gross profits of $18,856 and a decrease in other income of $1,395,026, as explained above.
Results of Operations for the nine months ending September 30, 2023 and 2022
The following table sets forth a summary of certain key financial information for the nine months ended September 30, 2023 and 2022:
|
| For the Nine Months Ended September 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Revenue |
| $ | - |
|
| $ | 37,500 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
| $ | - |
|
| $ | 18,856 |
|
|
|
|
|
|
|
|
|
|
Operating (expenses) |
| $ | (1,979,882 | ) |
| $ | (2,267,332 | ) |
|
|
|
|
|
|
|
|
|
Operating (loss) |
| $ | (1,979,882 | ) |
| $ | (2,248,476 | ) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
| $ | (171,467 | ) |
| $ | 1,225,742 |
|
|
|
|
|
|
|
|
|
|
Net (loss) |
| $ | (2,151,349 | ) |
| $ | (1,022,734 | ) |
|
|
|
|
|
|
|
|
|
Net loss per common share - basic and diluted |
| $ | (0.01 | ) |
| $ | (0.00 | ) |
Nine Months ended September 30, 2023 versus Nine Months ended September 30, 2022
During the nine months ended September 30, 2023 and 2022, the Company had $0 and $37,500 of revenues, respectively. The Company did not generate any revenues in the current period due to the continued focus of the Company’s capital and resources towards obtaining a Class III PMA.
Total operating expenses for the nine months ended September 30, 2023 and 2022 were $1,979,882 and $2,267,332, respectively.
The decrease in operating expenses was due primarily to a decrease in legal and professional of $93,018 due to the Company having settled various litigation matters during 2022 and a decrease in consulting expense of $269,515 offset by an increase in rent expense of $21,746, an increase of $12,500 in litigation settlement expenses ($462,500 and $450,000 for the nine months ended September 30, 2023 and 2022, respectively) and an increase of $30,606 in research and development expenses from $414,944 in the nine months ended September 30, 2022 compared to $445,550 in the nine months ended September 30, 2023.
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| Table of Contents |
Other income (expense) for the nine months ended September 30, 2023 and 2022 was $(171,467) and $1,225,742, respectively. The decrease in other income was due to an increase in total interest expense of $41,071 offset by a decrease in other income of $1,402,981 and a decrease in loss on debt settlement of $46,843 during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.
The increase in interest expense was primarily due to the Company having a larger outstanding balance of interest bearing promissory notes, $7,638 of post-judgement interest related to the SEC penalty and $26,502 of debt discount amortization expense during the nine months ended September 30, 2023 compared to $8,304 during the nine months September 30, 2022.
The decrease in other income was due to the Company receiving $392,000 as a settlement payment from its former auditor related to litigation and the receipt of $202,200 in cash and 2,085,258 shares of common stock as payment of $808,781 from its former Chief Executive Officer to satisfy a disgorgement obligation during the nine month period ended September 30, 2022 compared with the Company having $0 of other income during the nine months ended September 30, 2023.
The decrease in the loss on settlement of debt was due to the Company issuing common stock with a fair value of $424,782 for the settlement of an aggregate of $344,250 of accrued liabilities and accrued liabilities – related party during the nine months ended September 30, 2023 compared to the Company issuing common stock with a fair value of $458,001 for the settlement of an aggregate of $330,626 of accrued liabilities and accrued liabilities – related parties during the nine months ended September 30, 2022.
Our net loss for the nine months ended September 30, 2023 was $2,151,349 as compared to net loss of $1,022,734 for the comparable period of the prior year. The increase in the net loss was due to the Company having a decrease in operating expenses of $287,450 offset by a decrease in gross profits of $18,856 and a decrease in other income of $1,397,209 for the nine months ended September 30, 2023 as explained above.
Financial Condition, Liquidity and Capital Resources
As of September 30, 2023, the Company had a negative working capital of $1,924,946. The Company has not yet attained a level of operations which will allow it to meet its current overhead expense obligations. The report of our independent registered public accounting firm on our 2022 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The Company has been focusing its capital and resources towards seeking a Class III PMA for its HemoStyp technology, and has funded its initial operations with private placements, and unsecured loans from related parties. There can be no assurance that adequate financing will continue to be available to the Company and, if available, on terms that are favorable to the Company. Our ability to continue as a going concern is also dependent on many events outside of our direct control, including, among other things, our ability to achieve our business goals and objectives, as well as improvement in the economic climate.
During 2022, the Company entered into a common stock purchase agreement (“CSPA”) with White Lion, which gives the Company the right, but not the obligation, to require White Lion to purchase up to $10,000,000 of the Company’s common stock, subject to certain limitations and conditions set forth in the CSPA. As of the date of this filing, the Company has received approximately $1,980,082 in proceeds from White Lion to pay for its operations and finalization of its Class III PMA application. The sale of additional equity or convertible debt securities would be dilutive to our shareholders. In addition, economic conditions and actions by policymaking bodies are contributing to rising interest rates and significant capital market volatility, which, along with increases in our borrowing levels, could increase our future borrowing costs.
Cash Flows
The Company’s cash on hand at September 30, 2023 and December 31, 2022 was $74,039 and $13,377, respectively.
| 23 |
| Table of Contents |
The following table summarizes selected items from our statements of cash flows for the nine months ended September 30, 2023 and 2022:
|
| For the Nine Months Ended September 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Net cash used in operating activities |
| $ | (1,624,145 | ) |
| $ | (401,284 | ) |
Net cash used in investing activities |
|
| (2,850 | ) |
|
| (40,500 | ) |
Net cash provided by financing activities |
|
| 1,687,657 |
|
|
| 516,683 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
| $ | 60,662 |
|
| $ | 74,899 |
|
Net Cash Used in Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2023 was $1,624,145. The Company had net loss of $2,151,349 offset by amortization expense of $3,038, amortization of right-of-use asset of $346, amortization of debt discount of $26,502, stock issued for litigation settlement of $462,500, a loss on debt settlement of $80,532, a decrease in inventory of $1,132, an increase in prepaid and other current assets of $7,504 and an increase in accrued liabilities - related party of $224,698. The Company also had a decrease in accounts payable and accrued expenses of $14,040 and a decrease in accrued litigation settlement of $250,000.
Net cash used in operating activities for the nine months ended September 30, 2022 was $401,284. The Company had net loss of $1,022,734 and $808,781 as stock received as other income offset by stock for services and compensation of $483,450, amortization expense of $3,037, amortization of debt discount of $8,304, a loss on debt settlement of $127,375. The Company had an increase in accounts payable and accrued expenses of $441,240, an increase in accrued liabilities - related party of $149,575, an increase in accrued litigation settlement of $280,000, an increase in prepaid expenses of $25,000 and an increase in inventory of $37,750.
| 24 |
| Table of Contents |
Net Cash Used in Investing Activities
The Company paid $2,850 related to a security deposit during the nine months ended September 30, 2023.
The Company paid $40,500 related to the patent application fees during the nine months ended September 30, 2022.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2023 was $1,687,657. This was due to the result of the Company receiving net proceeds of $1,722,793 from the sale of stock offset by making payments of offering costs of $12,000, $19,136 on a loan payable and $4,000 on a loan payable – related party.
Net cash provided by financing activities for the nine months ended September 30, 2022 was $516,683. This was due to the Company receiving $383,275 in proceeds from related parties, $87,148 in proceeds from the sale of stock, $93,000 in proceeds from convertible notes – related party and $293,000 in proceeds from convertible notes payable offset by making payments of $226,275 on loans payable – related party, $63,465 on loan payable and repurchasing $50,000 of common stock.
Off-Balance Sheet Arrangements
As of September 30, 2023, we have no off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses in the financial statements and accompanying notes. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company. Based on this definition, we have the critical accounting estimates identified below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results which are found in Note 2 – Significant Accounting Policies of our 2022 Annual Report on Form 10-K and Note 2 – Significant Accounting Policies in the accompanying financial statements. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
Stock-Based Compensation
The Company accounts for stock-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation expense for employees and non-employees is measured at the grant date fair value. Stock-based compensation for all stock-based awards to employees and directors is recognized as an expense over the requisite service period, which is generally the vesting period.
| 25 |
| Table of Contents |
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company is in the process of implementing disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports are recorded, processed, summarized, and reported within the time periods specified in rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our Chief Executive Officer and Principal Financial Officer to allow timely decisions regarding required disclosure.
As of September 30, 2023, the Chief Executive Officer and the Principal Financial Officer carried out an assessment of the effectiveness of the design and operation of our disclosure controls and procedures and concluded that the Company’s disclosure controls and procedures were not effective.
Changes in Internal Control over Financial Reporting
During the nine months ended September 30, 2023, there were no changes in our system of internal controls over financial reporting.
| 26 |
| Table of Contents |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Management does not believe there have been any material changes to the risk factors listed in Part I, “Item 1A, Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2022. These risk factors should be carefully considered with the information provided elsewhere in this report, which could materially adversely affect our business, financial condition or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following summarizes all sales of our unregistered securities from January 1, 2023 through September 30, 2023. The securities in the below-referenced transactions were (i) issued without registration and (ii) were subject to restrictions under the Securities Act and the securities laws of certain states, in reliance on the private offering exemptions contained in Sections 4(a)(2), 4(a)(6) and/or 3(b) of the Securities Act and on Regulation D promulgated under the Securities Act, and in reliance on similar exemptions under applicable state laws as transactions not involving a public offering. No placement or underwriting fees were paid in connection with these transactions. All cash proceeds from the sale of securities were used for working capital purposes.
Date of Sale |
| Title of Security |
| Number Sold |
| Consideration Received |
| Purchaser/Recipient |
January 2023 |
| Common Stock |
| 937,500 |
| $187,500 of accrued liabilities |
| Officers and consultants |
January 2023 |
| Common Stock |
| 1,135,000 |
| $249,399 in cash |
| White Lion (1) |
February 2023 |
| Common Stock |
| 1,000,000 |
| $202,733 in cash |
| White Lion (1) |
March 2023 |
| Common Stock |
| 400,000 |
| $73,173 in cash |
| White Lion (1) |
March 2023 |
| Common Stock |
| 400,000 |
| $71,717 in cash |
| White Lion (1) |
March 2023 |
| Common Stock |
| 1,850,000 |
| $462,500 to settle litigation |
| Philip Forman |
April 2023 |
| Common Stock |
| 979,688 |
| $156,750 of accrued liabilities |
| Officers and consultants |
April 2023 |
| Common Stock |
| 450,000 |
| $86,524 in cash |
| White Lion (1) |
May 2023 |
| Common Stock |
| 800,000 |
| $139,797 in cash |
| White Lion (1) |
June 2023 |
| Common Stock |
| 1,200,000 |
| $277,686 in cash |
| White Lion (1) |
June 2023 |
| Common Stock |
| 1,100,000 |
| $311,820 in cash |
| White Lion (1) |
August 2023 |
| Common Stock |
| 500,000 |
| $123,035 in cash |
| White Lion (1) |
September 2023 |
| Common Stock |
| 530,000 |
| $124,358 in cash |
| White Lion (1) |
| (1) | Issued by the Company to White Lion Capital, LLC pursuant to the terms of the Common Stock Purchase Agreement dated September 1, 2022, as amended. |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Not applicable.
| 27 |
| Table of Contents |
Item 6. Exhibits
The following exhibits are filed with this report, or incorporated by reference as noted:
| 28 |
| Table of Contents |
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
|
|
|
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
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101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document. |
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101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
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|
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
___________
* Filed herewith.
(1) | Incorporated by reference to the Company’s Form 10-Q for the quarter ended September 30, 2014. |
|
|
(2) | Incorporated by reference to the Company’s Form 10-Q for the quarter ended June 30, 2022. |
|
|
(3) | Incorporated by reference to Form 8-K dated August 7, 2015 – date of earliest event filed on August 10, 2015. |
|
|
(4) | Incorporated by reference to the Form 8-K dated December 2, 2020 |
|
|
(5) | Incorporated by reference to the Form 8-K dated January 11, 2021 |
|
|
(6) | Incorporated by reference to the Form 8-K dated June 23, 2022 |
|
|
(7) | Incorporated by reference to the Form 8-K dated September 1, 2022 |
|
|
(8) | Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2022 |
|
|
(9) | Incorporated by reference to Form S-8 dated November 1, 2019 |
| 29 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNITED HEALTH PRODUCTS, INC. | |||
Dated: November 13, 2023 | By: | /s/ Brian Thom | |
Brian Thom | |||
Principal Executive Officer | |||
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signatures | Title | Date | |||
By: | /s/ Brian Thom |
| November 13, 2023 | ||
Brian Thom | Chief Executive Officer, Principal Executive Officer and Director | ||||
|
|
|
|
|
|
By: | /s/ Kristofer Heaton | Principal Financial Officer | November 13, 2023 | ||
Kristofer Heaton |
| ||||
|
|
|
|
|
|
By: | /s/ Robert Denser | Director | November 13, 2023 | ||
Robert Denser | |||||
| 30 |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
| I, Brian Thom certifies that: | ||
|
| ||
| 1. | I have reviewed this quarterly report on Form 10-Q of United Health Products, 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; | |
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| 4. | The registrant’s other certifying officer and I are 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: | |
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| 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; |
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| 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; |
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| 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 |
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| 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 |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our 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): | |
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| 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 |
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| 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. |
| Date: November 13, 2023 | By: | /s/ Brian Thom |
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| Brian Thom |
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| Principal Executive Officer |
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EXHIBIT 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
| I, Kristofer Heaton certifies that: | ||
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| 1. | I have reviewed this quarterly report on Form 10-Q of United Health Products, Inc.; | |
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| 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; | |
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| 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; | |
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| 4. | The registrant’s other certifying officer and I are 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: | |
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| 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; |
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| 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; |
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| 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 |
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| 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 |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our 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): | |
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| 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 |
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| 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. |
| Date: November 13, 2023 | By | /s/ Kristofer Heaton | |
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| Kristofer Heaton | ||
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| Principal Financial Officer |
EXHIBIT 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350), Brian Thom, Principal Executive Officer of United Health Products, Inc. (the “Company”) of the Company, hereby certifies that, to the best of his knowledge:
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| 1. | The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
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| 2. | The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
In witness whereof, the undersigned have set their hands hereto as of the November 13, 2023.
| By: | /s/ Brian Thom |
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| Brian Thom |
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| Principal Executive Officer |
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EXHIBIT 32.2
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350), Kristofer Heaton, Principal Financial Officer of United Health Products, Inc. (the “Company”) of the Company, hereby certifies that, to the best of his knowledge:
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| 1. | The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, to which this Certification is attached as Exhibit 32.2 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
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| 2. | The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
In witness whereof, the undersigned have set their hands hereto as of the November 13, 2023.
| By: | /s/ Kristofer Heaton |
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| Kristofer Heaton |
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| Principal Financial Officer |
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