UEEC 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2020

☐	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: 000-27781

UNITED HEALTH PRODUCTS, INC.
(Exact name of Company as specified in its charter)
Nevada		84-1517723
---	---	---
(State or other jurisdiction of<br><br>incorporation or organization)		(I.R.S. Employer<br><br>Identification No.)
10624 S. Eastern Ave., Suite A209<br><br>Henderson, NV		89052
---	---	---
(Address of Company’s principal executive offices)		(Zip Code)

(877) 358-3444

(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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐
Non-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 ☐ No ☒

The number of shares issued and outstanding of the Registrant’s Common Stock, as of November 13, 2020 was 188,273,456

UNITED HEALTH PRODUCTS, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

			PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Balance Sheets as of September 30, 2020 and December 31, 2019 (unaudited)			3
	Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2020 and September 30, 2019 (unaudited)			4
	Condensed Statement of Stockholders’ Deficiency for the Three and Nine Months Ended September 30, 2020 and September 30, 2019 (unaudited)			5
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2020 and September 30, 2019 (unaudited)			6
	Notes to Condensed Financial Statements (unaudited)			7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
Item 3.	Quantitative and Qualitative Disclosures			22
Item 4.	Controls and Procedures			22
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings			23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			23
Item 3.	Defaults Upon Senior Securities			23
Item 4.	Mine Safety Disclosures			23
Item 5.	Other Information			23
Item 6.	Exhibits and Reports on Form 8-K			24
SIGNATURES				26
2
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UNITED HEALTH PRODUCTS, INC.
---
Condensed Balance Sheets
	September 30,			December 31,
---	---	---	---	---	---
	2020			2019
	(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	6,705			16,624
Inventory	76,654			76,848
Prepaid and other current assets	10,000			-
Total current assets	93,359			93,472
Property and equipment	92,089			-
TOTAL ASSETS	185,448			93,472
Current Liabilities
Accounts payable and accrued expenses	677,258			512,476
Accrued liabilities - related parties	174,121			119,016
Convertible loans, net of debt discount	322,856			-
Convertible loans payable – related party, net of debt discount	240,140			365,785
Total current liabilities	1,414,375			997,277
Commitments and Contingencies
Stockholders’ Deficiency
Common Stock - .001 par value, 300,000,000 Shares
Authorized, 188,273,456 and 178,300,337 shares issued at September 30, 2020 and December 31, 2019	188,273			178,300
Additional Paid-In Capital	35,250,891			25,045,754
Accumulated Deficit	(36,668,091	)		(26,127,859	)
Total Stockholders’ Deficiency	(1,228,927	)		(903,805	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	185,448			93,472

All values are in US Dollars.

See notes to unaudited condensed financial statements.

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UNITED HEALTH PRODUCTS, INC.
---
Condensed Statements of Operations
(Unaudited)
		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
---	---	---	---	---	---	---	---	---	---	---	---	---
		2020			2019			2020			2019
Revenues		136			-			563			4,927
Cost of goods sold		34			-			195			502
Gross profit		102			-			368			4,425
Operating Costs and Expenses
Selling, general and administrative expenses		9,045,859			328,721			10,287,132			3,358,606
Research and development		60,042			149,994			90,717			392,263
Total Operating Expenses		9,105,901			478,715			10,377,849			3,750,869
Loss from Operations		(9,105,799	)		(478,715	)		(10,377,481	)		(3,746,444	)
Other Income (Expenses)
Interest expense – related party		(62,834	)		-			(102,256	)		-
Interest expense		(52,726	)		(46,154	)		(60,495	)		(248,906	)
Total other income (expenses)		(115,560	)		(46,154	)		(162,751	)		(248,906	)
Net Loss		(9,221,359	)		(524,869	)		(10,540,232	)		(3,995,350	)
Net Loss per common share:
Basic and diluted		(0.05	)		(0.00	)		(0.06	)		(0.02	)
Weighted average number of shares outstanding		186,861,228			176,588,907			182,092,792			175,402,450

All values are in US Dollars.

See notes to unaudited condensed financial statements.

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UNITED HEALTH PRODUCTS, INC

Condensed Statement of Stockholders’ Deficiency

Three and Nine Months Ended September 30, 2020 and September 30, 2019

(Unaudited)

									Additional
		Common Stock							Paid-in			Accumulated
		Shares				Amount			Capital			Deficit			Total
Balance at December 31, 2018			173,943,138			173,943			19,200,927			(19,525,564	)		(150,694	)
Stock-based compensation modification expense on shares held in escrow						-			2,021,000			-			2,021,000
Issuance of common stock for services			400,000			400			379,600			-			380,000
Sale of common stock			150,000			150			74,850			-			75,000
Net Loss			-			-			-			(2,663,398	)		(2,663,398	)
Balance at March 31, 2019			174,493,138			174,493			21,676,377			(22,188,962	)		(338,092	)
Sale of common stock			1,685,769			1,686			1,034,064			-			1,035,750
Issuance of common stock for notes payable and accrued liabilities – related party			410,000			410			204,590			-			205,000
Beneficial conversion feature			-			-			202,753			-			202,753
Net Loss			-			-			-			(807,083	)		(807,083	)
Balance at June 30, 2019			176,588,907			176,589			23,117,784			(22,996,045	)		298,328
Beneficial conversion feature			-			-			46,155			-			46,155
Net Loss			-			-			-			(524,869	)		(524,869	)
Balance at September 30, 2019			176,588,907			176,589			23,163,939			(23,520,914	)		(180,386	)
Balance at December 31, 2019			178,300,337			178,300			25,045,754			(26,127,859	)		(903,805	)
Beneficial conversion feature			-			-			2,015			-			2,015
Issuance of common stock for services			50,000			50			47,450			-			47,500
Sale of common stock			1,417,500			1,417			825,279			-			826,696
Cancellation of common stock			(22,381	)		(22	)		22			-			-
Net Loss			-			-			-			(625,821	)		(625,821	)
Balance at March 31, 2020			179,745,456			179,745			25,920,520			(26,753,680	)		(653,415	)
Beneficial conversion feature			-			-			150,056			-			150,056
Issuance of common stock for services			125,000			125			100,500			-			100,625
Sale of common stock			558,000			558			278,442			-			279,000
Net Loss			-			-			-			(693,052	)		(693,052	)
Balance at June 30, 2020			180,428,456			180,428			26,449,518			(27,446,732	)		(816,786	)
Beneficial conversion feature			-			-			170,796			-			170,796
Issuance of common stock for services			250,000			250			153,500			-			153,750
Stock-based compensation on vesting of restricted stock units			7,595,000			7,595			8,477,077			-			8,484,672
Net Loss			-			-			-			(9,221,359	)		(9,221,359	)
Balance at September 30, 2020			188,273,456			188,273			35,250,891			(36,668,091	)		(1,228,927	)

All values are in US Dollars.

See notes to unaudited condensed financial statements.

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UNITED HEALTH PRODUCTS, INC.
---
Condensed Statements of Cash Flows
(Unaudited)
		For the Nine Months Ended September 30,
---	---	---	---	---	---	---
		2020			2019
Cash Flows from Operating Activities:
Net (Loss)		(10,540,232	)		(3,995,350	)
Adjustments to Reconcile net (loss) to Net Cash Used In Operating Activities:
Stock-based compensation		8,786,547			2,401,000
Amortization of debt discount		158,110			248,908
Changes in assets and liabilities:
Accounts receivable		-			(4,927	)
Inventory		194			(35,319	)
Prepaid and other current assets		(10,000	)		50,000
Accounts payable and accrued expenses		279,782			92,754
Accrued liabilities – related party		145,105			(2,870	)
Net Cash Used In Operating Activities		(1,180,494	)		(1,245,804	)
Cash Flows from Investing Activities:
Purchase of property and equipment		(92,089	)		-
Net Cash Used in Investing Activities		(92,089	)		-
Cash Flows from Financing Activities:
Proceeds from convertible loan		325,000			-
Proceeds from related party		337,730			292,000
Repayments to related party		(505,762	)		(100,000	)
Proceeds from sale of common stock		1,105,696			1,110,750
Cash flow provided by financing activities		1,262,664			1,302,750
Increase (Decrease) in Cash and Cash Equivalents		(9,919	)		56,946
Cash and Cash Equivalents – Beginning of period		16,624			31,273
CASH AND CASH EQUIVALENTS – END OF PERIOD		6,705			88,219
Supplemental cash flow information:
Cash paid for interest		-			-
Cash paid for income taxes		-			-
Non-cash Investing & Financing Activities:
Cancellation of common stock		22			-
Debt discount related to beneficial conversion feature		322,867			-
Conversion of accounts payable and accrued expenses to convertible notes payable		115,000			-
Conversion of accrued liabilities – related parties to convertible notes payable – related party		90,000			-
Common stock issued for notes payable and accrued liabilities – related party		-			205,000

All values are in US Dollars.

See notes to unaudited condensed financial statements.

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UNITED HEALTH PRODUCTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020 AND 2019

(unaudited)

Note 1. Organization and Basis of Preparation

United Health Products, Inc. (“United” or the “Company”) is a product development and solutions company focusing its growth initiatives on the expanding wound-care industry and disposable medical supplies markets. The Company produces an innovative gauze product that absorbs exudate (fluids which have been discharged from blood vessels) by forming a gel-like substance upon contact.

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, 2019 filed with the SEC on July 9, 2020.

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 on financing its future development activities and its working capital needs largely from the sale of public 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.

The Chief Executive Officer has agreed to advance funds or make payments of the Company’s obligations at his discretion. There is no written agreement to continue this support.

On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus (COVID-19) as a pandemic. As a result, economic uncertainties have arisen which have the potential to negatively impact the Company’s ability to raise funding from the markets. Other financial impact could occur though such potential impact is unknown at this time.

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.

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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 were 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 which 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 credits issued.

There was no provision for doubtful accounts recorded at September 30, 2020 and December 31, 2019. The Company recorded $0 and $0 in bad debt expense for the nine month periods ended September 30, 2020 and 2019, respectively.

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 raw materials purchased by the Company and finished goods.

		September 30, 2020			December 31, 2019
Raw materials		54,774			54,774
Finished goods		21,880			22,074
		76,654			76,848

All values are in US Dollars.

During the nine months ended September 30, 2020 and 2019, the Company determined $0 and $0, respectively, of inventory should be impaired and written-off to cost of goods sold.

Stock Based Compensation

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions, stock-based compensation expense is measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measured. Share-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.

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The Company accounts for stock compensation arrangements with non-employees in accordance with Accounting Standard Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which requires that such equity instruments are recorded at the value on the grant date.

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 a net loss for the nine months ended September 30, 2020 and 2019 and the effect of including these potential common shares in the net loss per share calculations would be anti-dilutive.

The total potential common shares as of September 30, 2020 includes 47,755,000 of restricted stock units, 535,000 shares for convertible loans payable – related party and 880,000 shares for convertible loans payable. The total potential common shares as of September 30, 2019 included 50,350,000 of restricted stock units and 94,494 for convertible loans payable – related party.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:

Equipment	10 years

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.

New Accounting Pronouncements

The Company considers all new pronouncements and management has determined that there have been no other recently adopted or issued accounting standards that had or will have a material impact on its financial statements.

Note 3. Related Party Transactions

Related party loans and related party convertible loans payables

As of September 30, 2020 and December 31, 2019, convertible loans payable – related party totaled $240,140 and $365,785, respectively. The amount of $365,785 as of December 31, 2019 was owed to Doug Beplate, our Chief Executive Officer and convertible at $0.65 per share, at the sole discretion of Mr. Beplate.

During the nine months ended September 30, 2020, Mr. Beplate loaned the Company $227,730 which were convertible at $0.65. These loans resulted in a beneficial conversion feature of $59,987 which was recorded to interest expense – related party upon issuance. The Company made repayments to Mr. Beplate totaling $505,762 during the nine months ended September 30, 2020, leaving a balance of $87,753 owed to Mr. Beplate as of September 30, 2020. These loans were for operating expenses of the Company, due on demand and have no interest rate.

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During the nine months ended September 30, 2020, Louis Schiliro, the Chief Operating Officer loaned the Company $110,000. The loan is convertible at $0.50 per share at the discretion of Mr. Schiliro, has a maturity date of December 31, 2020 and has an interest rate of 3%.

During the nine months ended September 30, 2020, Mr. Schiliro, also converted $90,000 of accrued compensation into a convertible loan. The loan is convertible at $0.50 per share at the discretion of Mr. Schiliro, has a maturity date of March 31, 2021 and has an interest rate of 3%.

These loans resulted in a beneficial conversion feature totaling $88,385 which was recorded as a debt discount. The debt discount is being amortized through the maturity dates and $40,774 was amortized to interest expense – related party during the nine months ended September 30, 2020. The remaining unamortized debt discount is $47,611. As of September 30, 2020, Mr. Schiliro is owed $200,000 and the balance on the loan net of the debt discount is $152,389. Interest expense was $1,495 during the nine months ended September 30, 2020 and the entire amount has been accrued.

Accrued liabilities

As of September 30, 2020 and December 31, 2019, $68,395 and $77,130 was owed to Mr. Beplate, respectively, for accrued compensation. During the nine months ended September 30, 2020 $188,375 was paid to Mr. Beplate.

As of September 30, 2020 and December 31, 2019, $56,600 and $24,100 was owed to Nate Knight, the Chief Financial Officer, for accrued compensation, respectively. During the nine months ended September 30, 2020 $32,500 of compensation was accrued and $12,500 was paid. As of September 30, 2020 and December 31, 2019, Mr. Knight was owed $7,456 for reimbursable expenses.

As of September 30, 2020 and December 31, 2019, $15,000 and $0 was owed to Louis Schiliro, the Chief Operating Officer, for accrued compensation, respectively. During the nine months ended September 30, 2020 $15,000 of compensation was accrued, $30,000 was paid and $90,000 was converted into a convertible loan as mentioned above. As of September 30, 2020 and December 31, 2019, Mr. Schiliro was owed $18,243 and $0 for reimbursable expenses, respectively.

As of September 30, 2020 and December 31, 2019, $5,000 and $0 was owed to the office administrator, who is a person affiliated with the Company’s CEO, for accrued compensation, respectively. During the nine months ended September 30, 2020 $5,000 of compensation was accrued and $40,000 was paid. As of September 30, 2020 and December 31, 2019, $1,932 and $10,330 was also owed for reimbursable expenses, respectively.

Equity transactions

On July 21, 2020 the Board of Directors approved amendments to the previously granted restricted stock units (RSU) on March 25, 2019. The approved amendments increased the amount of RSU’s granted to Mr. Beplate from 33,000,000 to 33,800,000, increased the amount of RSU’s granted to Mr. Schiliro from 8,000,000 to 10,000,000, increased the amount of RSU’s granted to the office administrator, who is a person affiliated with the Company’s CEO from 250,000 to 500,000 and increased the amount of RSU’s granted to the Technical Product Supervisor, who is the son of the office administrator.

The amendment also changed the vesting conditions so now 15% of RSU units vested on July 15, 2020, an additional 15% of RSU units upon FDA approval of a PMA Class III awarded to the Company, an additional 20% of RSU units on January 1, 2021 and the balance of all unvested RSU units on the earliest date that (a) the Company achieves $20 million in gross cumulative sales commencing as of January 1, 2020, (b) a Covered Transaction is consummated or (c) a Trigger Event occurs. The Grantee has the option to delay the Vesting Date of all or part of his RSU Units until no later than an event described in (a), (b) or (c) above, by serving written notice to the Company prior to the Vesting Date. and delivered to such persons upon the earlier of (i) a change in control of the Company by a cash tender offer, merger, acquisition or otherwise or (ii) the Company achieving gross revenues of $20,000,000 in gross revenues on a go forward basis, or (iii) the commencement of an event by a third party without the Board’s approval to effect, or seek to effect, a change in control of the Company or the Company’s management.

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The change in vesting terms resulted in a total of 6,720,000 of the RSU’s vesting on July 15, 2020 with 5,070,00 being issued to Mr. Beplate, 1,500,000 being issued to Mr. Schiliro, 75,000 being issued to the office administrator, who is a person affiliated with the Company’s CEO and 75,000 being issued to the Technical Product Supervisor, who is the son of the office administrator. The change in vesting terms also resulted in a total of 50,000 of the RSU’s vesting on July 20, 2020 with 50,000 being issued to the Marketing and Advertising Supervisor, who is the daughter of the office administrator. The vesting of the 6,770,000 RSU’s resulted in stock-based compensation expense of $4,806,700 which is the fair value of the stock on the vesting date.

Note 4. Convertible Loans

During the nine months ended September 30, 2020, a consultant loaned the Company $325,000. The loan is convertible at $0.50 per share at the discretion of the consultant, has a maturity date of March 31, 2021 and has an interest rate of 3%.

During the nine months ended September 30, 2020, a consultant and a medical advisor converted $115,000 of accrued compensation into convertible loans. The loans are convertible at $0.50 per share at the discretion of the note holders, have a maturity date of March 31, 2021 and have an interest rate of 3%.

These loans resulted in a beneficial conversion feature totaling $174,495 which was recorded as a debt discount. The debt discount is being amortized through the maturity dates and $57,350 was amortized to interest expense during the nine months ended September 30, 2020. The remaining unamortized debt discount is $117,145. As of September 30, 2020, the convertible loans have a principal balance of $440,000 and the balance on the loans net of the debt discount is $322,855. Interest expense was $3,144 during the nine months ended September 30, 2020 and the entire amount has been accrued.

Note 5. Prepaid and Other Current Assets

The Company had a balance of $10,000 and $0 as of September 30, 2020 and December 31, 2019, respectively. During the nine months ended September 30, 2020, the Company paid $10,000 as a security deposit on a lease for office and warehouse space.

Note 6. Property and Equipment

As of September 30, 2020 and December 31, 2019, the balance of property and equipment represented consisted of the followings:

		September 30,			December 31,
		2020			2019
Equipment (not placed in service)		92,089			-
Accumulated depreciation		-			-
		92,089			-

All values are in US Dollars.

Depreciation expense for the nine months ended September 30, 2020 and 2019 was $0 and $0, respectively.

During the nine months ended September 30, 2020 and 2019, the Company acquired property and equipment of $92,089 and $0, respectively.

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Note 7. Issuances of Securities

Share issuances 2019

During the nine months ended September 30, 2019, 1,435,769 shares of common stock were sold to non-affiliated investors in a private placement for total cash proceeds of $910,750, 400,000 shares of common stock were sold to securities counsel for total cash proceeds of $200,000, 200,000 shares of common stock were issued to securities counsel for services rendered with a fair value of $190,000, 100,000 shares of common stock were issued to each of two directors for services rendered with a fair value of $190,000 and 410,000 shares of common stock were issued to the Company’s CEO for conversion of notes payable and accrued liabilities totaling $205,000.

During the nine months ended September 30, 2019, 2,150,000 shares that were held in escrow originally were to vest upon a change of control of the Company were modified by the Board of Directors and deemed vested. The modification resulted in recording $2,021,000 of stock-based compensation expense which was the fair value of the shares on the date of the modification.

Share issuances 2020

During the nine months ended September 30, 2020, 1,975,500 shares of common stock were sold to non-affiliated investors in a private placement for total cash proceeds of $1,105,696, 50,000 shares of common stock were issued to a former medical advisor for services rendered with a fair value of $47,500, 425,000 shares of common stock were issued to consultants for services rendered with a fair value of $301,875 and 22,381 shares of common stock were cancelled.

Restricted stock units

As discussed in Note 3, the Board of Directors approved amendments to the previously granted restricted stock units (RSU) on March 25, 2019 for certain management and consultants to the Company. The amendments increased the total amount of RSU’s granted from 50,350,000 to 55,350,000. The amendments also changed the vesting conditions which resulted in 7,545,000 of the RSU’s vesting on July 15, 2020 and 50,000 of the RSU’s vesting on July 20, 2020. Per ASC 718-20-35, the change in vesting conditions resulted in a modification of the stock-based compensation awards. The modification is considered a Type III modification as described in ASC 718-20-55 and resulted in recording $5,392,450 of stock-based compensation expense which was the fair value of the shares on the date of the modification.

In addition, the amendment will result in 10,060,000 of the RSU’s vesting on January 1, 2021. The fair value of these RSU’s on the date of the amendment was $7,142,600. The compensation expense is being amortized on a straight-line basis from the date of the amendment through January 1, 2021 which is the vesting date. Stock-based compensation of $3,092,222 was recognized as expense during the nine months ended September 30, 2020 leaving total unrecognized compensation cost of $4,050,378.

Management is unable to determine when FDA approval of a PMA Class III will be awarded to the Company or when a change of control will occur, if at all, and as of September 30, 2020, there was $31,963,827 unrecognized compensation cost related to the restricted stock unit awards.

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Activity related to our restricted stock units during the nine months ended September 30, 2020 was as follows:

						Weighted
						Average
						Grant
		Number of				Date Fair
		Units				Value
Total awards outstanding at December 31, 2019			50,350,000			0.94
Units granted			50,350,000			0.71
Units Exercised/Released			(7,595,000	)		0.71
Units Cancelled/Forfeited			(45,350,000	)		0.94
Total awards outstanding at September 30, 2020			47,755,000			0.73

All values are in US Dollars.

Note 8. Litigation

A Complaint was filed with the United States District Court, Southern District of New York by Steven Safran as Plaintiff against the Company and Douglas Beplate, its CEO, as Defendant. This court case was transferred to the United States District Court in Las Vegas, Nevada. Mr. Safran is seeking damages and monies allegedly owed pursuant to an employment agreement of approximately $734,000 and allegedly unpaid loans of $245,824 provided to Defendants. The Company has denied Plaintiff’s allegations and intends to vigorously defend said lawsuit. The parties have held various depositions and the Company had a motion to dismiss which was denied. The Plaintiff filed a motion to amend his complaint and the Company has submitted opposition papers and are awaiting an order from the Court. A trial is scheduled for August 10, 2021.

In July 2015, the Company entered into a consulting agreement retaining the services of Maxim Group LLC. An amended agreement was executed in January 2018. A total of 4 million shares of common stock were issued to Maxim in exchange for its obligation to perform certain advisory and other services. In the fourth quarter of 2018, the Company notified Maxim of its intent to file for arbitration pursuant to the consulting agreement. Maxim, without providing a similar notice to the Company, immediately filed a complaint with FINRA seeking release of a restrictive legend from a Company stock certificate in the amount of 500,000 shares. The Company filed an affirmative defense that the required notice of arbitration was not provided to the Company prior to filing. The Company also filed a counterclaim for breach of contract seeking restitution of the original 4 million shares issued to Maxim. This case was settled on December 13, 2019, with Maxim agreeing to make certain payments to the Company post sale of their 500,000 Company shares, in an amount equal to one-half of their sales proceeds. To date, the Company has received no money.

Philip Forman, who served in positions as Chairman, a director, Chief Executive Officer and Chief Medical Advisor at various time between 2011 and October 2015, filed a lawsuit against the Company and our Chief Executive Officer, Douglas Beplate, in the United States District Court of the District of Nevada. The claimant is claiming, among other things, that: the June 25, 2015 Amendment to his November 10, 2014 Employment Agreement with the Company, which terminated the Employment Agreement on October 1, 2015, is not valid because of lack of consideration; that a July 22, 2015 Stock Purchase Agreement pursuant to which the claimant sold Company shares issued to him under the Amendment to a third a party is unenforceable (despite the fact that all payment for the shares under the Stock Purchase Agreement was made); that the plaintiff’s 2014 Employment Agreement is enforceable and that he is entitled to cash and stock compensation under that Employment Agreement (without giving regard to the Amendment); that if the Amendment is enforceable, he is entitled to the shares issued under the Amendment (without mention that those shares were sold to a third party under the Stock Purchase Agreement described above); and that the Company and Mr. Beplate defrauded the plaintiff relating to the foregoing. The plaintiff is seeking declaratory judgment regarding the parties’ relative rights under the Employment Agreement, the Amendment and the Stock Purchase Agreement; money damages of no less than $2,795,000; and punitive damages of $8,280,000. The Company believes that it has meritorious defenses to the matters claimed as well as counterclaims against the claimant. A motion to dismiss the plaintiff’s claims was filed and on March 19, 2020 the motion to dismiss was denied. Discovery is now taking place.

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FSR Inc. commenced a lawsuit in 2018 against Korsair Holdings A.G. in the U.S. District Court for the Southern District of New York, seeking among other claims for relief, rescission of the transfer of 3,050,000 shares of United Health Products that FSR sold to Korsair in 2011. Third-Party Plaintiff, JEC Consulting Associates, LLC as Liquidator of LeadDog Capital L.P., Intervenor (“Intervenor”) in the above matter, filed a third-party complaint against United Health Products, and Douglas Beplate alleging among other things that the Company and Mr. Beplate refused to have the Rule 144 restrictive legend removed from the Korsair certificate held by JEC, and concomitantly fraudulently deprive JEC as Liquidator of LeadDog of the ability to sell the Shares in the open market, knowingly, intentionally and directly causing economic harm to LeadDog Capital L.P. Intervenor as Third Party Plaintiff further alleges that the Company and Mr. Beplate as Third-Party Defendants are not only monetarily liable to Third-Party Plaintiff for compensatory damages of $2,500,000 but should be made to pay exemplary damages in an amount determined by the Court, but not less than an equal amount - $2,500,000. Third-Party Plaintiff demands judgment for the above referenced amounts and for the Court to also declare that the 3,050,000 shares are free trading; that Third-Party Plaintiff’s rights to 2.5 million of the Shares are superior to the claims of Plaintiff FSR; that Plaintiff FSR has no claim to 2.5 million of the 3,050,000 Shares reflected by the Korsair certificate; that the Company and Mr. Beplate are to instruct its current transfer agent to remove the restrictive legend on the Korsair certificate for the Shares; and an order directing the Company and Mr. Beplate to instruct the Company’s transfer agent to exchange the Korsair certificate for new free-trading, unrestricted certificates. The Company believes that it had legal right to decline to instruct the transfer agent to remove the restrictive legend from the Korsair Shares where the ownership of the aforementioned shares have been in dispute and the Korsair shares have not been submitted for transfer to its transfer agent in proper form under the uniform commercial code. Recently, the Court granted the motion for a default by FSR, Inc against Korsair Holdings, AG., but denied any claim for relief against UHP, Inc. The Court ruled that the SEC must review the claim before the matter can proceed in Court. The SEC has yet to render a determination.

Due to uncertainties inherent in litigation, we cannot predict the outcome of the legal proceedings described herein.

In October 2019 the Company filed a defamation, trade libel and unlawful and deceptive practices lawsuit against White Diamond Research LLC, Adam Gefvert, Streetsweeper.org, Sonya Colberg and others in response to a stock manipulation scheme to injure UHP for illegitimate personal gain. The complaint alleged that in August 2019 the above defendants published false and defamatory statements about UHP in “short and distort” schemes to artificially drive down the market price of UHP’s common stock while at the same time having a short position in UHP’s stock, so they could obtain illicit profits on their short sale positions. This lawsuit was settled in April 2020 on terms mutually agreed to by the Company and the defendant parties, without the exchange of monetary payment or other economic consideration.

On February 7, 2020, the Company filed the Original Petition for Fraud and Breach of Contract in the 215th Judicial District of Harris County. The demand for trial by jury was made. Defendants Patterson Companies Inc., and Patterson Management, L.P., were served on February 24, 2020. Defendants Patterson Veterinary, Inc. and Patterson Logistics Services, Inc. were served on February 25, 2020. Defendant Animal Health was served on February 27, 2020. On March 5, 2020, the Defendants removed to federal court. The defendants filed their answer in federal court on March 12, 2020.

On June 26, 2020 Defendant’s Animal Health International, et al filed a Motion for Judgment on the Pleadings. On July 16, 2020 Plaintiff, United Health Products, Inc., filed an opposed Motion for Leave to Amend the state court petition to conform with federal rules. On July 22, 2010 Judge Andrew Hanen denied the Defendant’s Motion for Judgment on the Pleadings and granted the Plaintiff’s Motion for Leave to file an Amended Complaint, directing the Clerk of the Court to file the First Amended Complaint. The initial pretrial conference occurred on August 25, 2020. The defendant has filed for summary judgement.

In August 2020, United Health Products filed suit against its former auditors, Haynie & Company, in Utah State Court, asserting claims related to professional negligence and breach of fiduciary duty. Haynie & Company denies the allegations. The parties recently began conducting discovery.

Note 9. Subsequent Events

The Company has evaluated events from September 30, 2020, through the date whereupon the financial statements were issued and has determined that the following material events have occurred:

The Company received a total of $15,000 in loans from the Company’s Chief Executive Officer,

The Company’s Chief Operating Officer, Mr. Schiliro, converted $15,000 of accrued compensation into a convertible loan. The loan is convertible at $0.50 per share at the discretion of Mr. Schiliro, has a maturity date of March 31, 2021 and has an interest rate of 3%.

Various consultants, the Company's legal counsel and a medical advisor converted a total of $115,000 of accrued compensation into convertible loans. The loans are convertible at $0.50 per share at the discretion of the note holders, have a maturity date of March 31, 2021 and have an interest rate of 3%.

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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, 2019, filed with SEC on July 9, 2020.

Company Overview

United Health Products, Inc. (“UHP” or the “Company”) develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. The product, HemoStyp®, is derived from all natural, oxidized regenerated cellulose and designed to absorb exudate/drainage from superficial wounds and help control bleeding. We are in the process of seeking regulatory approval to sell products into the U.S. Class III surgical market and are exploring commercial opportunities outside the Class III market in hemodialysis, emergency medicine, first responder and military applications, among others.

Impact of Covid-19 on our Business

In late 2019 the novel coronavirus, Covid-19, was identified. By February 2020, the virus had spread to many countries around the world, including the United States. By late February, authorities in the United States began advising American businesses to prepare for the effects of the outbreak.

The extent of the long-term adverse effect of the Covid-19 pandemic on the economy, our industry and our results of operations and financial condition is unknown and largely dependent on future developments, most of which, including the severity and duration of this pandemic, are beyond our control.

Recent Developments

The following developments in the Company’s business have occurred during 2020:

	·	The London based Journal of Wound Care published the Company's submitted article, Efficacy and Safety of HemoStyp as an Adjunct for Management of Secondary Hemostasis in the Operative Setting, in its November 2020 edition. The article highlights the results of the study demonstrating HemoStyp's superiority to Surgicel® Original, the current standard of care produced by Johnson & Johnson Ethicon division.

Our HemoStyp Gauze Products

HemoStyp Hemostatic Gauze is a collagen-like natural substance created from chemically treated cellulose. It is an effective hemostatic agent registered with the FDA to help control bleeding from open wounds and body cavities. The HemoStyp hemostatic material contains no chemical additives, thrombin or collagen, and is hypoallergenic. When the product comes in contact with blood it expands slightly and converts to an adhesive gel that subsequently breaks down into glucose and salts. Because of its benign impact on body tissue and the fact that it simply degrades to non-toxic end products, HemoStyp does not cause significant delay in healing as do certain other hemostatic materials. Labratory testing has shown HemoStyp to be 100% absorbable in the human body in 24 hours or less. A human trial conducted in 2019 and 2020 demonstrated the effectiveness of HemoStyp in vascular, thoracic and abdominal surgical procedures.

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HemoStyp Hemostatic Gauze is a flexible, cloth-like material that is applied by folding the gauze as needed to fit the size of the wound or incision, and then placing the gauze onto the bleeding tissue. In surgical situations, the product quickly converts to a transparent gel with a neutral pH level that allows the surgeon to monitor the coagulation process and also avoids damage to the surrounding tissue. In superficial wound situations, HemoStyp can be integrated into a plastic bandage with or without a traditional gauze component to help stop bleeding.

Potential Target Markets

Our technology can be marketed as HemoStyp Gauze in various configurations and sizes both domestically and internationally. Our potential customer base includes, without limitation, the following (noting that we have several formats of Trauma Gauze):

	•	Hospitals and Surgery Centers for all Internal Surgical usage, post FDA Class III approval
	•	Hospitals, Clinics and Urgent Care centers – For external trauma
	•	EMS, Fire Departments and other First Responders
	•	Correctional Facilities
	•	Schools, Universities and Day Care Facilities
	•	Nursing Homes and Assisted Living Environments
	•	Home Care Providers
	•	Dentist and OMS offices
	•	Sports Medicine Providers
	•	Veterinary hospitals
	•	Municipalities and Government Agencies
	•	Hemodialysis centers
	•	Consumers

Primary Strategy

The Class III surgical markets, both domestic and international, represent the most attractive market for our products due to the limited competition from other Class III approved hemostatic agents and the resulting premium pricing for products that can meet the demanding requirements of the human surgical environment. Our preliminary tests and our completed human trial lead us to believe that the HemoStyp technology can compete against established market participants and allow us to gain a significant market share. In 2018, we made the decision to focus our efforts on becoming a stronger medical technology company with a patented technology for Class III surgical markets that would enhance the Company’s value and overall market strength. The FDA approval process requires a substantial amount of the Company’s resources and energy so we paused our efforts on sales and marketing to non-Class III markets and our full attention was focused on completing the FDA process and identifying an acquisition/commercial partner candidate. As of the filing date of this Form 10-Q, the FDA review process, which was temporarily held up by the Covid-19 pandemic, is ongoing.

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In anticipation of receiving Class III approval, we are evaluating the best paths to rapidly grow our revenue and profits in all potential market segments, which could include seeking (i) a potential sale or merger, which may include a pre-sale commercialization component, (ii) one or more commercial partnerships and licensing agreements with established market participants, without an associated sale or merger, or (iii) to raise the necessary capital to establish and grow our own marketing and distribution capabilities and drive revenue and profits organically.

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. In response to these inbound contacts, and to maximize shareholder value, the Company’s board of directors has determined to conduct a review of strategic alternatives, which include, without limitation, identifying an acquisition candidate, joint ventures or other commercial partnerships, or a standalone growth plan. To assist in this review and strategy, the Company is working with a financial advisory firm. There can be no assurances that any specific transaction will occur as a result of this strategic. No assurances can be given that the Company will identify an acquisition or commercialization candidate(s) or complete a transaction.

Manufacturing and Packaging of our Products

The Company’s cellulose products are manufactured in the United States to our specifications at various facilities. We have established various contract manufacturing facilities. All of these facilities have been carefully vetted and have supplied multiple Quality Control program certificates and are registered FDA facilities. These facilities have been submitted as part of our PMA submission, which includes the FDA inspection records of these facilities.

Patents and Trademarks

The Company’s hemostatic gauze products are patented in the U.S. Patent and Trademark Office (“USPTO”), which patent protection currently runs through 2029. However, if our intellectual property positions are challenged, invalidated, circumvented, or expire, or if we fail to prevail in future intellectual property litigation, our business could be adversely affected. We have created multiple variations of our gauze product and will protect each of these new generation platforms and product with additional intellectual property. Our success depends in part on our ability to defend our intellectual property rights. The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and often involve complex legal, scientific, and factual questions. Third parties may seek to challenge, invalidate, or circumvent our intellectual property rights. In addition, our patent positions might not protect us against competitors with similar products or technologies because competing products or technologies may not infringe our patents. Also, there are third parties who have patents or pending patent applications that they may claim necessitate payment of a royalty or prevent us from commercializing our patent in certain territories. Patent disputes are frequent, costly and can preclude, delay, or increase the cost of commercialization of products.

The Company has registered trademarks for the following:

	•	Boo Boo Strips:
	•	The Ultimate Bandage
	•	Hemostrips
	•	Nik Fix
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Results of Operations for the three months ending September 30, 2020 and 2019

The following table sets forth a summary of certain key financial information for the three months ended September 30, 2020 and 2019:

		For the Three Months Ended September 30,
		2020			2019
Revenue		136			-
Gross profit		102			-
Operating (expenses)		(9,105,901	)		(478,715	)
Operating (loss)		(9,105,799	)		(478,715	)
Other income (expense)		(115,560	)		(46,154	)
Net (loss)		(9,221,359	)		(524,869	)
Basic and diluted (loss) per common share		(0.05	)		(0.00	)

All values are in US Dollars.

Three Months ended September 30, 2020 versus Three Months ended September 30, 2019

During the three months ended September 30, 2020 and 2019, the Company had $136 and $0 of revenues, respectively. Revenues were minimal and insignificant in the third quarter of 2020 and there were no sales in the third quarter of 2019. The Company has continued to devote its attention and efforts towards making our technology and product more commercially viable, by seeking to obtain FDA class III approval for internal surgical purposes. The Company is continuing this strategy based on our belief that the greatest value to our shareholders will come from this FDA Class III approval for general surgical use, and pursuing opportunities that we anticipate will be available to the Company if this FDA approval is obtained, including, among other things, fostering interest from potential merger and acquisition candidates. In this strategy and approach, the Company made a determination not to engage new distribution partners as that could create conflicts with a potential acquiror/commercialization candidate and tie the Company’s hands from a revenue or branding perspective. The Company expects that if an acquisition candidate is identified it may also include a pre-acquisition commercialization component and in that case current vendor and future relationships and all pending purchase orders will likely be facilitated by that company. No assurances can be given that the Company will identify an acquisition or commercialization candidate or complete a transaction with such a candidate on terms satisfactory to us, if at all.

Total operating expenses for the three months ended September 30, 2020 and 2019 were $9,105,901 and $478,715, respectively. The increase in operating expenses is due primarily to an increase in stock-based compensation expense. The Company recorded $8,484,672 of stock-based compensation related to the amendment to the restricted stock award agreement made during the quarter. The amendment resulted in the vesting of 7,595,000 of restricted stock awards the immediate recognition of $5,392,450 of expenses and also $3,092,222 of stock-based compensation due to the amortization of the restricted stock units that vest on January 1, 2021. In addition, the Company issued 250,000 shares of common stock to consultants for services with a value of $153,750. The increase in stock-based compensation was offset by a decrease in research and development of $89,951.

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Our net loss for the three months ended September 30, 2020 was $9,221,359 as compared to net loss of $524,869 for the comparable period of the prior year. The increase in the net loss is due to the Company having an increase in operating expenses of $8,627,186 as explained above along with interest expense increasing from $46,154 during the three months ended September 30, 2019 to $115,560 for the three months ended September 30, 2020. The increase in interest expense is due to the Company entering into various convertible loans and convertible loans – related party during the quarter which resulted in amortization of debt discount during the three months ended September 30, 2020 of $111,606 compared to $46,154 in the comparable period of 2019.

Results of Operations for the nine months ending September 30, 2020 and 2019

The following table sets forth a summary of certain key financial information for the nine months ended September 30, 2020 and 2019:

		For the Nine Months Ended September 30,
		2020			2019
Revenue		563			4,927
Gross profit		368			4,425
Operating (expenses)		(10,377,849	)		(3,750,869	)
Operating (loss)		(10,377,481	)		(3,746,444	)
Other income (expense)		(162,751	)		(248,906	)
Net (loss)		(10,540,232	)		(3,995,350	)
Basic and diluted net (loss) per common share		(0.06	)		(0.02	)

All values are in US Dollars.

Nine Months ended September 30, 2020 versus Nine Months ended September 30, 2019

During the nine months ended September 30, 2020 and 2019, the Company had $563 and $4,927 of revenues, respectively. Revenues were minimal during the nine months September 30, 2020 and 2019 and decreased compared to the prior year. The Company has continued to devote its attention and efforts towards making our technology and product more commercially viable, by seeking to obtain FDA class III approval for internal surgical purposes. The Company is continuing this strategy based on our belief that the greatest value to our shareholders will come from this FDA Class III approval for general surgical use, and pursuing opportunities that we anticipate will be available to the Company if this FDA approval is obtained, including, among other things, fostering interest from potential merger and acquisition candidates. In this strategy and approach, the Company made a determination not to engage new distribution partners as that could create conflicts with a potential acquiror/commercialization candidate and tie the Company’s hands from a revenue or branding perspective. The Company expects that if an acquisition candidate is identified it may also include a pre-acquisition commercialization component and in that case current vendor and future relationships and all pending purchase orders will likely be facilitated by that company. No assurances can be given that the Company will identify an acquisition or commercialization candidate or complete a transaction with such a candidate on terms satisfactory to us, if at all.

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Total operating expenses for the nine months ended September 30, 2020 and 2019 were $10,377,849 and $3,750,869, respectively. The increase in operating expenses is due primarily is due primarily to an increase in stock-based compensation expense. The Company recorded $8,484,672 of stock-based compensation related to the amendment to the restricted stock award agreement made during the period. The amendment resulted in the vesting of 7,595,000 of restricted stock awards the immediate recognition of $5,392,450 of expenses and also $3,092,222 of stock-based compensation due to the amortization of the restricted stock units that vest on January 1, 202 compared to the Company recording stock based modification expense of $2,021,000 due to the change in vesting conditions of 2,150,000 shares of common stock previously held in escrow during the nine months ended September 30, 2019.

In addition, the Company issued 425,000 shares of common stock to consultants for services with a value of $301,875 during the nine months ended September 30, 2020 compared to 400,000 shares of common stock for services valued at $380,000.

The increase in stock-based compensation was offset by a decrease in research and development of $301,546.

Our net loss for the nine months ended September 30, 2020 was $10,540,232 as compared to net loss of $3,995,350 for the comparable period of the prior year. The increase in the net loss is due to the Company having an increase in operating expenses of $6,626,980 as explained above along with interest expense decreasing from $248,906 during the nine months ended months ended September 30, 2019 to $162,751 for the nine months ended September 30, 2020. The decrease in interest expense is due to the Company only having $158,110 of amortization of debt discount during the nine months ended September 30, 2020 compared to $248,908 in the comparable period of 2019.

Financial Condition, Liquidity and Capital Resources

As of September 30, 2020, the Company had a negative working capital of $1,321,016. The Company has not yet attained a level of operations, and for the foreseeable future will not be pursuing commercial operations, which will allow the it to meet its current overhead while it focuses on its strategy of seeking FDA class III approval for internal surgical purposes, and opportunities which may arise from that including, among other things, fostering interest from potential merger and acquisition candidates or commercial partners. If we are not successful in our strategy, we cannot assure that we will be able to adjust to and fund a marketing and sale strategy, and if we do, we are unable to assure we will attain profitable operations within the next few business operating cycles or at all. The report of our independent registered public accounting firm on our 2019 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. While the Company has funded its initial operations with private placements, and secured 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.

Cash Flows

The Company’s cash on hand at September 30, 2020 and December 31, 2019 was $6,705 and $16,624, respectively.

The following table summarizes selected items from our statements of cash flows for the nine months ended September 30, 2020 and 2019:

		For the Nine Months Ended September 30,
		2020			2019
Net cash used in operating activities		(1,180,494	)		(1,245,804	)
Net cash used in investing activities		(92,089	)		-
Net cash provided by financing activities		1,262,664			1,302,750
Net increase (decrease) in cash and cash equivalents		(9,919	)		56,946

All values are in US Dollars.

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Net Cash Provided by (Used in) Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2020 was $1,180,494. The Company had net loss of $10,540,232 offset by stock based compensation of $8,786,547, amortization of debt discount of $158,110 a decrease in inventory of $194, an increase in accounts payable and accrued expenses of $279,782 and an increase in accrued liabilities - related party of $145,105. The Company also had an increase in prepaid and other current assets of $10,000.

Net cash used in operating activities for the nine months ended September 30, 2019 was $1,245,804. The Company had a net loss $3,995,350 offset by stock-based compensation of $2,401,000, amortization of debt discount of $248,908, a decrease in prepaid and other current assets of $50,000 and an increase in accounts payable and accrued expenses of $92,754. The also had a decrease in accrued liabilities – related party of $2,870, an increase in accounts receivable of $4,927 and an increase in inventory of $35,319.

Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities for the six months ended September 30, 2020 was $92,089. This was due to the Company purchasing equipment during the period in preparation of opening up its own facility.

The Company did not have any investing activities during the nine months ended September 30, 2019.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2020 was $1,262,664. This was due to the Company receiving $325,000 from proceeds related to a convertible loan, $337,730 from related parties, $1,105,696 in proceeds from the sale of stock offset by making payments of $505,762 on related party loans.

Net cash provided by financing activities for the nine months ended September 30, 2019 was $1,302,750. This was due to the Company receiving $1,110,750 in proceeds from the sale of stock and receiving $292,000 from related party loans offset by making payments of $100,000 on related party loans.

Off-Balance Sheet Arrangements

As of September 30, 2020, we have no off-balance sheet arrangements.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

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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 were 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.

Stock Based Compensation

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions, stock-based compensation expense is measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measured. Share-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.

The Company accounts for stock compensation arrangements with non-employees in accordance with Accounting Standard Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which requires that such equity instruments are recorded at the value on the grant date.

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 to allow timely decisions regarding required disclosure.

As of September 30, 2020, the Chief Executive Officer and Chief Financial Officer carried out an assessment of the effectiveness of the design and operation of our disclosure controls and procedure and concluded that the Company’s disclosure controls and procedures were not effective.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2020, there were no changes in our system of internal controls over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

See “Note 8” in the Notes to Condensed Financial Statements.

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, 2019. 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

(a) From January 1, 2020 through September 30, 2020, we had no sales or issuances of unregistered common stock, except we made sales or issuances of unregistered securities listed in the table below:

Date of Sale		Title of<br><br>Security		Number<br><br>Sold				Consideration Received and Description of Underwriting or Other Discounts to Market Price or Convertible Security, Afforded to Purchasers	Exemption<br><br>from<br><br>Registration Claimed		If Option, Warrant or Convertible Security, terms of exercise or conversion
Jan. – March 31, 2020		Common Stock			1,467,500			826,696 in cash, 47,500 in services rendered, no commissions paid	Rule 506;<br><br>Section 4(2)		Not applicable
April – June 30, 2020		Common Stock			683,000			279,000 in cash, 100,625 in services rendered, no commissions paid	Rule 506;<br><br>Section 4(2)		Not applicable
July – Sept. 30, 2020		Common Stock			7,845,000			5,546,200 in services rendered, no commissions paid	Rule 506;<br><br>Section 4(2)		Not applicable

All values are in US Dollars.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

The following exhibits are filed with this report, or incorporated by reference as noted:

3(i)		Articles of Incorporation of the Company dated February 28, 1997. (1)
3(ii)		Amendment to Articles of Incorporation. (1)
3(iii)		By-laws of the Company. (2)
3(iv)		August 2015 Amendment to Articles of Incorporation. (3)
10.1		Services Agreement with Louis Schiliro (5)
10.2		Services Agreement – Nate Knight (4)
10.3		January 2015 Services Agreement with Douglas Beplate (6)
10.4		Restricted Stock Unit Agreement - Louis Schiliro (7)
10.5		Restricted Stock Unit Agreement - Douglas Beplate (7)
21		Subsidiaries of the Registrant – none
31.1		Certification of Principal Executive Officer*
31.2		Certification of Principal Financial Officer*
32.1		Section 1350 Certificate by Principal Executive Officer*
32.2		Section 1350 Certificate by Principal Financial Officer*
99.1		2019 Employee Benefit and Consulting Services Compensation Plan (8)
101.SCH		Document, XBRL Taxonomy Extension (*)
101.CAL		Calculation Linkbase, XBRL Taxonomy Extension Definition (*)
101.DEF		Linkbase, XBRL Taxonomy Extension Labels (*)
101.LAB		Linkbase, XBRL Taxonomy Extension (*)
101.PRE		Presentation Linkbase (*)

__________

* Filed herewith.

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(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-K for the year ended December 31, 2005.
(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 Form 8-K dated November 23, 2014.
(5)	Incorporated by reference to the Company’s Form 10-Q for the quarter ended June 30, 2018.
(6)	Incorporated by reference to the Form 8-K dated January 16, 2015.
(7)	Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2018.
(8)	Incorporated by reference to Form S-8 dated October 31, 2019.
25
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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, 2020	By:	/s/ Douglas Beplate
		Douglas Beplate
		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/ Douglas Beplate	Principal Executive Officer and	November 13, 2020
	Douglas Beplate	Chairman of the Board
By:	/s/ Nate Knight	Principal Financial Officer and Director	November 13, 2020
	Nate Knight
By:	/s/ Robert Denser	Director	November 13, 2020
	Robert Denser

Douglas Beplate, Nate Knight and Robert Denser represent all the current members of the Board of Directors.

26

ueec_ex311.htm

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Douglas Beplate 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;
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:
	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.	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):
	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.
Date: November 13, 2020	By:	/s/ Douglas Beplate
---	---	---
		Douglas Beplate
		Principal Executive Officer

ueec_ex312.htm

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Nate Knight 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;
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:
	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.	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):
	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.
Date: November 13, 2020	By	/s/ Nate Knight
---	---	---
		Nate Knight
		Principal Financial Officer

ueec_ex321.htm

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), Douglas Beplate, Principal Executive Officer of United Health Products, Inc. (the "Company") of the Company, hereby certifies that, to the best of his knowledge:

	1.	The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, 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
	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, 2020.

	By:	/s/ Douglas Beplate
		Douglas Beplate
		Principal Executive Officer

ueec_ex322.htm

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), Nate Knight, Principal Financial Officer of United Health Products, Inc. (the "Company") of the Company, hereby certifies that, to the best of his knowledge:

	1.	The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, 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
	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, 2020.

	By:	/s/ Nate Knight
		Nate Knight
		Principal Financial Officer