UNITED GUARDIAN INC
For the period ended Jun 30, 2026. Filed Aug 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 11, 2026
UG$6.71-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001171843-26-003276
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001171843-26-005409
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 42 previous paragraphs and 58 current paragraphs.
18 unchanged; 12 reworded; 27 added; 11 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
EXECUTIVE OVERVIEW
Current report
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Current report
In accordance with ASU-2016-13, we recognize an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset.
Current report
Net sales for the second quarter of 2026 increased by $270,042 (10%) when compared with the same period in 2025. Net sales for the first half of 2026 increased by $661,137 (12%) as compared with the corresponding period in 2025. The increase in sales for the second quarter of 2026 and the first half of 2026 was attributable to changes in sales of the following product lines:
Current report
Pharmaceuticals**:**
Current report
Because there are fees, rebates and allowances associated with sales of our two pharmaceutical products, Renacidin and Clorpactin® WCS-90, discussion of pharmaceutical sales includes references to bothgross sales (before fees, rebates, and allowances) andnet sales (after fees, rebates, and allowances).
Current report
Gross sales of our pharmaceutical products for the three-month period ended June 30, 2026 increased by $4,904 (less than 1%) compared with the corresponding period in 2025. The increase in gross sales was primarily due to an increase of $22,821 (1%) in gross sales of Renacidin combined with a decrease of $17,917 (11%) in gross sales of the Company’s other pharmaceutical product, Clorpactin WCS-90. The decrease in Clorpactin WCS-90 sales was due to the timing of customer orders.
Current report
For the six-month period ended June 30, 2026, gross pharmaceutical sales increased by $331,107 (11%) compared with the corresponding period in 2025. This increase was primarily due to an increase in gross sales of Renacidin of $312,752 (10%) combined with an increase in gross sales of Clorpactin WCS-90 of $18,355 (6%).
Current report
Net sales of our pharmaceutical products for the three- and six-month periods ended June 30, 2026 saw a similar pattern, with net sales increasing by $16,663 (1%) and $292,173 (11%), respectively.
Current report
With the benefits from our insurance payer outreach program starting to take shape, we are hopeful that the new formulary wins combined with the focus on increasing awareness of Renacidin among healthcare professionals, will create increased demand for Renacidin in the future.
Current report
Typically, any differences between the change in net sales compared with the change in gross sales for these products is due to a combination of the change in gross sales of those products combined with changes in pharmaceutical sales allowances related to these products. Typically, these allowances have a direct relationship to the sales of the Company’s pharmaceutical products.
Current report
Cosmetic and Sexual Wellness ingredients**:**
Current report
(a) Second quarter sales: For the second quarter of 2026, sales of our cosmetic and sexual wellness ingredients increased by $390,150 (44%) when compared with the second quarter of 2025. The increase was due primarily to a net increase of $286,282 (38%) in sales to our largest cosmetic distributor, ASI, when compared with the second quarter of 2025. This increase was primarily due to ASI resuming regular purchases of the Company’s products after experiencing an overstock situation in 2025.
Current report
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Current report
Second quarter sales to the Company’s four other distributors, as well as two direct customers, increased by a net of $103,868 (77%) compared with the second quarter of 2025. The increase was attributable to sales increases of $122,216 (161%) to the Company’s distributors in the U.K. and France and two direct customers. These increases were partially offset by a decrease in sales of $18,348 (31%) to the Company’s distributors in Switzerland, Korea and Italy.
Current report
(b) Six-month sales: For the first half of 2026 sales of our cosmetic and sexual wellness ingredients increased by $536,417 (34%) when compared with the corresponding period in 2025. This increase was primarily due to a net increase in sales to ASI of $489,381 (40%) when compared with the first half of 2025. The increase in sales during the first half of 2026 was primarily due to same reason discussed above regarding ASI returning to normal ordering patterns after dealing with an overstock situation during 2025.
Current report
Six-month sales to the Company’s four other distributors, as well as two direct customers, increased by a net of $47,036 (12%), compared with the same period in 2025. Sales to the Company’s distributors in the United Kingdom, Korea, France and Switzerland increased by $94,619 (30%), while sales to the Company’s distributor in Italy and two direct customers decreased by a combined $47,583 (69%).
Current report
Medical lubricants**:**
Current report
For the three-month period ended June 30, 2026, sales of our medical lubricants decreased by $136,771 (28%) compared with the same period in 2025. The decrease in sales for the three-month period was primarily due to a decrease in orders from the Company’s largest customer in India. For the six-month period ended June 30, 2026, sales of our medical lubricants decreased by $167,453 (15%) compared with the same period in 2025. The decrease in sales for the six-month period was primarily due to the same reason above, and was related to reduced orders from our largest customer in India.
Current report
Cost of sales as a percentage of net sales increased slightly to 50% in the second quarter of 2026 from 47% in the second quarter of 2025. For the first six months of 2026, cost of sales as a percentage of sales increased to 50% compared with 46% for the first six months of 2025. The increase in both periods was primarily due to the units sold in 2026 carrying an increased overhead cost resulting from lower unit production levels in 2025. As a result, these units carried a higher overhead cost, and when these units were sold in the current year the cost of sales increased.
Current report
Operating expenses, consisting of selling and general and administrative expenses, decreased by $26,768 (4%) for the three-months ended June 30, 2026, compared with the same period in 2025. For the six-month period ended June 30, 2026, operating expenses increased by $7,460 (less than 1%), compared with the same period in 2025. The decrease in the three-month period was primarily due to decreases in sales and marketing travel, consulting fees, and the Company’s 401K Plan discretionary contribution.
Current report
Research and development expenses increased by $16,527 (15%) for the three-month period ended June 30, 2026, and $17,154 (8%) for the six-month period ended June 30, 2026, compared with the same periods in 2025. The increase in both periods was primarily due to increases in payroll and payroll-related expenses.
Current report
Investment income decreased by $128 (less than 1%) and $15,001 (10%), respectively, for the three-and six-month periods of 2026 compared with the same periods in 2025. The decrease was primarily due to decreases in interest rates in 2026 compared to 2025.
Current report
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Current report
Net cash provided by investing activities was $165,002 and $ 885,686, respectively, for the first half of 2026 and 2025. The decrease was due to some proceeds from the sale of marketable securities from the first half of 2025 not being reinvested. For the six-month period ended June 30, 2026, these proceeds were primarily reinvested in U.S. Treasury Bills.
Current report
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Current report
OFF BALANCE-SHEET ARRANGEMENTS
Removed paragraphs (11)
Previous report
EXECUTIVE LEVEL OVERVIEW
Previous report
Net sales for the first quarter of 2026 increased by $391,095 (approximately 16%) as compared with the first quarter of 2025. The increase in sales for the first quarter of 2026 were principally due to a significant increase in sales of our pharmaceutical products coupled with a strong increase in sales of our Lubrajel line of cosmetic ingredients. The changes in our sales by product line are as follows:
Previous report
The increase in sales was primarily due to a continued increase in gross sales of Renacidin, which increased from $1,232,396 in the first quarter of 2025 to $1,522,326 (approximately 24%) in the first quarter of 2026. The increase in gross sales of Renacidin was combined with an increase in sales of Clorpactin, which increased from $135,583 in the first quarter of 2025 to $171,856 in the first quarter of 2026, an increase of approximately 27%.
Previous report
Commensurate with the increase in gross sales of our pharmaceutical products, we experienced an increase in pharmaceutical-related sales allowances of $49,337 (approximately 25%), compared with the same period in 2025. The increase in sales allowances was primarily due to an increase in VA chargebacks and distribution fees.
Previous report
We continue to experience global competition from Asian and European companies that manufacture and sell products that are competitive with our products. These competitive products are usually sold at a lower price than our products; however, they may not compare favorably to the level of performance and quality of our products. We work closely with our network of distributors to price our products as competitively as possible and, when appropriate, to offer additional volume discounts and more aggressive pricing to maintain and increase sales and expand our customer base. We expect that this competitive environment will continue in 2026 and we plan to enhance our competitive position by strengthening our core capabilities and investing in new product development, especially in the area of naturally-derived products. We will continue to provide high-quality products, technical expertise, and the reliability our customers have come to expect from us.
Previous report
Cost of sales as a percentage of net sales for the first quarter of 2026 increased to 50%, compared with 45% for the first quarter of 2025. This increase was due to the larger ratio of our pharmaceutical products sales in the first quarter of 2026 compared to 2025. The pharmaceutical products carry higher tolling unit costs relative to our cosmetic and medical products produced in house at lower unit costs.
Previous report
Operating expenses, consisting of selling, general, and administrative expenses, increased by $34,228 (approximately 5%) for the first quarter of 2026 compared with the first quarter of 2025. The increase was mainly due to increases in sales & marketing expenses and payroll and payroll related expenses.
Previous report
R&D expenses increased by $627 (less than 1%) for the first quarter of 2026 compared with the first quarter of 2025.
Previous report
Investment income decreased by $14,873 (approximately 18%) for the first quarter of 2026 compared with the first quarter of 2025. The decrease was primarily due to a decrease in interest income from U.S. Treasury Bills during the first quarter of 2026 compared with the same period in 2025. This was the result of lower interest rates compared with the same period in 2025.
Previous report
Cash provided by investing activities for the three months ended March 31, 2026 and 2025 was $30,113 and $679,370, respectively. The decrease was due primarily to an increase in purchases of marketable securities in the first quarter of 2026 compared to the same period in 2025 due to decreased cash requirements.
Previous report
The information to be reported under this item is not required of smaller reporting companies.
Reworded paragraphs (12)
Previous wording
In January 2026, we entered into a new distribution agreement with Brenntag Specialties, a global market leader in chemicals and ingredients distribution, for the distribution of our new Natrajel® line of sexual wellness ingredients in the United States, Canada, and Mexico, and the distribution of Lubrajel® and Natrajel products in France. The new agreement provides an opportunity to grow the French market, which is known for innovation in personal care products. Although there have been no sales of our new sexual wellness products yet, the sexual wellness segment is expected to grow at a higher compound annual growth rate (“CAGR”) than other segments such as skin care, personal care and cosmetics. We are ready to begin manufacturing and distribution of this new line of products once orders are received.
Current wording
In January 2026, we entered into a new distribution agreement with Brenntag Specialties, a global market leader in chemicals and ingredients distribution, for the distribution of our new Natrajel® line of sexual wellness ingredients in the United States, Canada, and Mexico, and the distribution of Lubrajel® and Natrajel products in France. The new agreement provides an opportunity to grow the French market, which is known for innovation in personal care products.
Previous wording
In 2025, we launched an insurance payer outreach program with the goal of having Renacidin, our most important pharmaceutical product, included on additional drug formularies. As a result of this effort, we have received approval from two major Pharmacy Benefit Managers for inclusion on their formularies beginning in 2026. We will continue our insurance payer outreach as we move through 2026 and will also introduce a new outreach program with the focus on increasing awareness among healthcare professionals to grow the market for Renacidin.
Current wording
In 2025, we launched an insurance payer outreach program with the goal of having Renacidin, our most important pharmaceutical product, included on additional drug formularies. As a result of this effort, we have received approval from two major Pharmacy Benefit Managers (“PBM’s”) for inclusion on their formularies beginning in 2026. One of these PBM’s began including Renacidin on its formulary effective June 1, 2026, and the other on July 1, 2026. While we will continue our insurance payer outreach as we move through 2026, we will also introduce a new outreach program with the focus on increasing awareness among healthcare professionals to grow the market for Renacidin.
Previous wording
The following discussion and analysis cover material changes in our financial condition since the year ended December 31, 2025, and a comparison of the results of operations for the three months ended March 31, 2026 and March 31, 2025. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
The following discussion and analysis cover material changes in our financial condition since the year ended December 31, 2025, and a comparison of the results of operations for the three and six months ended June 30, 2026 and June 30, 2025. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025. All references in this quarterly report to “sales” or “Sales” shall mean Net Sales unless specified otherwise.
Previous wording
The net gain on marketable securities increased from $12,350 for the quarter ended March 31, 2025, to $17,742 for the quarter ended March 31, 2026. The increase was primarily due to the recognition on a gain from the sale of equity mutual funds in the first quarter of 2026, compared to a loss on those sales in the same period in 2025. Our management team and Board of Directors continue to closely monitor our investment portfolio and have made and will continue to make any changes they believe may be necessary or appropriate to minimize the future impact on our financial position that the volatility of the global financial markets may have.
Current wording
The net gain on marketable securities increased by $23,789 and $29,181, respectively, for the three-and six-month periods ended June 30, 2026, compared to the same periods in 2025. These increases were due to 1) increases in the market value of these securities based on market conditions, and 2) the recognition of a gain on the sale of equity mutual funds in the first quarter of 2026, compared to a loss on those sales in the first quarter of 2025. The Company’s management and Board of Directors are continuing to closely monitor our investment portfolio and have made and will continue to make any changes they believe may be necessary or appropriate to minimize the future impact on our financial position that the volatility of the global financial markets may have.
Previous wording
Included in net income is monetary consideration agreed upon with the contract manufacturer (“CM”) of our pharmaceutical product Renacidin. The settlement relates to the unexpected shutdown of the CM’s facility during the latter part of 2023 and beginning of 2024. During this time, we were unable to fill complete orders of Renacidin. On October 27, 2023, we notified the CM of our intention to file a claim for damages in connection with the CM’s breach of our supply contract with the CM, and we requested compensation for the loss of sales during the shutdown period. The settlement, which was agreed upon by both parties, calls for the CM to supply us with a specified volume of product at no cost. The majority of the product covered by this agreement was received at our facility in March of 2026 and was valued at $303,133. During the second quarter of 2026, we expect to receive the remaining product covered by the settlement, which is valued at approximately $35,000.
Current wording
Included in net income for the three- and six-month periods ended June 30, 2026, is a monetary settlement paid to us by the contract manufacturer (“CM”) of our pharmaceutical product Renacidin. The settlement relates to the unexpected shutdown of the CM’s facility during the latter part of 2023 and in the beginning of 2024. During this time, we were unable to fill complete orders of Renacidin. On October 27, 2023, we notified the CM of our intention to file a claim for damages in connection with the CM’s breach of our supply contract with the CM, and we requested compensation for the loss of sales during the shutdown period. The settlement, which was agreed upon by both parties, called for the CM to supply us with a specified volume of product at no cost. The majority of the product covered by this agreement was received at our facility in March of 2026 and was valued at $303,133. During the second quarter of 2026, the remaining product covered by the agreement was received and was valued at $36,360. As of the date of this report, the CM has fulfilled their full obligation under the agreement, and there are no additional monies owed to the Company.
Previous wording
The Company's effective income tax rate was approximately 21% for the first quarter of 2026 and 2025 and is expected to remain at 21% for the current fiscal year.
Current wording
The Company's effective income tax rate was 21% for the first half and second quarter of both 2026 and 2025. The Company’s tax rate is expected to remain at 21% for the current fiscal year.
Previous wording
Working capital decreased by $187,320 to $10,344,756 at March 31, 2026, down from $10,532,076 at December 31, 2025. The current ratio increased to 8.1 to 1 at March 31, 2026, up from 7.3 to 1 at December 31, 2025. The decrease in working capital was primarily due to a decrease in cash and cash equivalents. The increase in the current ratio was primarily due to a decrease in accounts payable.
Current wording
Working capital increased from $10,532,076 at December 31, 2025 to $10,977,452 at June 30, 2026, an increase of $445,376. The current ratio remained the same at 7.3 to 1 at both June 30, 2026 and December 31, 2025. The increase in working capital was primarily due to an increase in cash and cash equivalents.
Previous wording
The Company believes that its working capital is, and will continue to be, sufficient to support its operating requirements for at least the next twelve months. The Company’s long-term liquidity position will be dependent on its ability to generate sufficient cash flow from profitable operations.
Current wording
The Company believes that its working capital is, and will continue to be, sufficient to support its operating requirements for at least the next twelve months. The Company intends to utilize its available cash and assets primarily for its continued organic growth and potential future strategic transactions, as well as to mitigate the potential impact of inflation on the Company's business.
Previous wording
The Company generated cash from operations of $604,536 and $322,080 for the three months ended March 31, 2026 and 2025, respectively. The increase was due primarily to an increase in net income.
Current wording
The Company generated cash from operations of $2,124,531 and $625,323 for the first half of 2026 and 2025, respectively. The increase was primarily due to an increase in net income, combined with decreases in inventories and prepaid income taxes.
Previous wording
Net cash used in financing activities was $1,149,892 and $1,607,893 for the quarters ended March 31, 2026 and 2025, respectively. The decrease in cash used in financing activities was primarily due to the payment of lower dividends in the first quarter of 2026 compared to the same period in 2025. We declared dividends of $0.25 per share in the first quarter of 2026, compared to $0.35 per share in the first quarter of 2025.
Current wording
Net cash used in financing activities was $1,149,892 and $1,618,183 for the first half of 2026 and 2025, respectively. The decrease in cash used in financing activities was primarily due to the payment of lower dividends in the first half of 2026 compared to the same period in 2025. We declared dividends of $0.25 per share in the first half of 2026, compared to $0.35 per share in the first half of 2025.
Previous wording
We expect to continue to use our cash to make dividend payments, purchase marketable securities, and take advantage of growth opportunities that may arise that are in the best interest of the Company and its shareholders.
Current wording
The Company expects to continue to use its cash to make dividend payments, purchase marketable securities, and take advantage of growth opportunities that are in the best interest of the Company and its shareholders.
Previous wording
The Company has no off balance-sheet transactions that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Current wording
The Company has no off-balance sheet transactions that have, or are reasonably likely to have, a current or future impact on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In the second quarter of 2026, there was a nominal amount of sales of our sexual wellness products. Although sales of this product line are just beginning to commence, we are optimistic as to the potential this market offers. The sexual wellness segment is expected to grow at a higher compound annual growth rate (“CAGR”) than other segments such as skin care, personal care and cosmetics.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
All references in this quarterly report to “sales” or “Sales” shall mean Net Sales unless specified otherwise.