United Health Products Inc
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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, 2024 · Filed Aug 13, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001477932-24-002630
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001477932-24-004723
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 48 previous paragraphs and 62 current paragraphs.
27 unchanged; 18 reworded; 12 added; 3 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 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 (12)
Current report
Background and Developments
Current report
In 2012, the Company began marketing its HemoStyp hemostatic gauze for human topical and dental applications as well as for and veterinary surgical applications under an FDA 510k approval.
Current report
In 2018, the Company determined to pursue a Class III designation to market its hemostatic gauze under an FDA Premarket Approval as an adjunct product to achieve hemostasis in human surgical applications. In February 2018, the Company completed and submitted to the FDA all materials relevant for the pre-market approval (or PMA) for HemoStyp as a Class III application for internal surgical procedures. Since our initial PMA submission, we have conducted a human trial and have worked to address certain deficiencies in our PMA application that were identified by the FDA.
Current report
On March 21, 2024, we submitted results of the human clinical trial and other information, including our manufacturing, sterilization and shipping processes, to the FDA. On June 18, 2024, the FDA issued a customary "Deficiencies Letter" to the company listing certain questions and comments on various elements of the application. The letter contained approximately 40 specific comments and requests for additional information covering the device description, sterility & shelf life, clinical & performance testing, and biocompatibility sections of the PMA application. The FDA's 180-day PMA application review period will be paused while the Company develops its responses to the deficiencies that were identified, and will resume once all the responses have been submitted. There can be no assurance that our PMA application will be approved.
Current report
Operating Expenses
Current report
The decrease in operating expenses for the three months ended June 30, 2024 was primarily due to the Company having a decrease in legal and professional expenses of $59,575, a decrease in research and development expenses of $39,393 offset by an increase in write-off of inventory of $33,598.
Current report
Other income (expense)
Current report
Six Months ended June 30, 2024 versus Six Months ended June 30, 2023
Current report
Operating Expenses
Current report
Total operating expenses for the six months ended June 30, 2024 and 2023 were $830,271 and $1,529,431, respectively.
Current report
Other income (expense)
Current report
The Company paid $2,850 related to a security deposit during the six months ended June 30, 2023.
Removed paragraphs (3)
Previous report
On March 21, 2024, we submitted to the FDA a revised Premarket Approval application to market our absorbable hemostatic gauze for human surgical applications in the United States. The FDA is currently reviewing our application and there can be no assurance that our PMA application will be approved.
Previous report
On January 21, 2021, the U.S. Patent Office provided notification of publication of the Company’s patent application for the method of forming and using a hemostatic hydrocolloid. This publication does not imply any assurance of the receipt of the patent but establishes an obligation of any party that seeks to use the applicable method to pay royalties for the right to do so. The patent application for this process remains pending as of the date of this filing.
Previous report
On February 11, 2021, the Company was notified that its application to establish global patent protection for the process of creating and deploying a hydrocolloid (or gel) format of its HemoStyp technology was accepted for publication under the procedures of the Patent Cooperation Treaty (“PCT”), an international patent law treaty which provides a unified procedure for filing a patent application in most foreign countries. We previously filed provisional patent applications for our HemoStyp hydrocolloid process in 2020. In January 2022 the Company initiated steps to register its hydrocolloid patent in the European common market and in additional foreign countries where we intend to commercialize any future HemoStyp gel formats. We can give no assurance that foreign registration of our patents will be granted in any of these jurisdictions.
Reworded paragraphs (18)
Previous wording
UHP develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, HemoStyp, is derived from cotton and designed to absorb exudate/drainage from superficial wounds and help control bleeding. We are in the process of seeking regulatory approval to sell our Hemostyp product line into the U.S. Class III, European CE Mark and Canadian human surgical markets.
Current wording
UHP develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, HemoStyp®, is derived from cotton and designed to absorb exudate/drainage from superficial wounds and help control bleeding. We are in the process of seeking regulatory approval to sell our hemostatic gauze product line into the U.S. Class III and European CE Mark human surgical markets.
Previous wording
HemoStyp hemostatic gauze is a natural substance created from chemically treated cellulose derived from cotton. It is an effective hemostatic agent registered with the FDA for superficial use under a 510(k) approval obtained in 2012 to help control bleeding from open wounds and body cavities. The HemoStyp hemostatic material contains no chemical additives, thrombin, collagen or animal-derived products, and is hypoallergenic. When the product comes in contact with blood it expands slightly and quickly converts to a translucent gel that subsequently breaks down into glucose and salts. Because of its benign impact on body tissue and the fact that it degrades to non-toxic end products, HemoStyp does not impede the healing of body tissue as compared to certain competing hemostatic products. Laboratory testing has shown HemoStyp to be 100% absorbable in the human body within 24 hours, compared to days or weeks with competing organic regenerated cellulose products. A human trial conducted in 2019 and 2020 demonstrated the effectiveness of HemoStyp in vascular, thoracic and abdominal surgical procedures.
Current wording
HemoStyp hemostatic gauze is a natural substance created from chemically treated cellulose derived from cotton. It is an effective hemostatic agent registered with the FDA for superficial use under a 510(k) approval obtained in 2012 to help control bleeding from open wounds and body cavities. The HemoStyp hemostatic material contains no chemical additives, thrombin, collagen or animal-derived products, and is hypoallergenic. When the product comes in contact with blood it expands slightly and quickly converts to a translucent gel that subsequently breaks down into glucose and salts. Because of its benign impact on body tissue and the fact that it degrades to non-toxic end products, HemoStyp does not impede the healing of body tissue as compared to certain competing hemostatic products. Laboratory testing has shown HemoStyp to be 100% absorbable in the human body within 24 hours, compared to days or weeks with competing organic regenerated cellulose products.
Previous wording
Our HemoStyp technology received an FDA 510(k) approval in 2012 for use in external or superficial bleeding situations and we believe there is an opportunity for HemoStyp products to address unmet needs in several medical applications that represent attractive commercial opportunities. However, the Class III surgical markets, both domestic and international, represent the most attractive market for our products due to the smaller number of competitors offering Class III approved hemostatic agents and the resulting premium pricing for products that can meet the demanding requirements of the human surgical environment. We believe that our extensive laboratory testing and our completed human trial indicate that the HemoStyp technology could successfully compete against established Class III market participants, and could gain a significant market share. There can be no assurance that an FDA Premarket Approval (PMA) will be granted.
Current wording
Our HemoStyp technology received an FDA 510(k) approval in 2012 for use in external or superficial bleeding situations and we believe there is an opportunity for HemoStyp products to address unmet needs in several medical applications that represent attractive commercial opportunities. However, the Class III surgical markets, both domestic and international, represent the most attractive market for our products due to the smaller number of competitors offering Class III approved hemostatic agents and the resulting premium pricing for products that can meet the demanding requirements of the human surgical environment. We believe that our extensive laboratory testing and our completed human trial indicate that the HemoStyp technology could successfully compete against established Class III market participants, and could gain a significant market share. As discussed above, we are in the process of seeking FDA pre-market approval for our HemoStyp product. There can be no assurance that an FDA PMA will be granted.
Previous wording
Our hemostatic gauze technology is protected through patents granted by the U.S. Patent and Trademark Office, which protection currently runs through 2029. In 2020 and 2021, we filed additional U.S. and International patents that protect the use of our NORC technology in a gel or hydrocolloid formulation.
Current wording
Our hemostatic gauze technology is protected through patents granted by the U.S. Patent and Trademark Office, which protection currently runs through 2029.
Previous wording
During the three months ended March 31, 2024 and 2023, the Company had $0 of revenues, respectively. The Company did not generate any revenues in the current quarter due to the continued focus of the Company’s capital and resources towards obtaining a Class III PMA.
Current wording
During the three months ended June 30, 2024 and 2023, the Company had $0 of revenues. The Company did not generate any revenues due to the continued focus of the Company’s capital and resources towards obtaining a Class III PMA.
Previous wording
Total operating expenses for the three months ended March 31, 2024 and 2023 were $425,094 and $1,053,975, respectively.
Current wording
Total operating expenses for the three months ended June 30, 2024 and 2023 were $405,177 and $475,456, respectively.
Previous wording
Other income (expense) for the three months ended March 31, 2024 and 2023 was $(26,844) and $(88,731), respectively. The decrease in other expense was due to a decrease in loss on settlement of debt of $60,938.
Current wording
Other income (expense) for the three months ended June 30, 2024 and 2023 was $(26,844) and $(47,455), respectively. The decrease in other expense was primarily due to a decrease in loss on settlement of debt of $19,594.
Previous wording
Our net loss for the three months ended March 31, 2024 was $451,938 as compared to net loss of $1,142,706 for the comparable period of the prior year. The decrease in the net loss is due to the Company having a decrease in operating expenses of $628,881 and a decrease in other expense of $61,887, as explained above.
Current wording
Our net loss for the three months ended June 30, 2024 was $432,021 as compared to net loss of $522,911 for the comparable period of the prior year. The decrease in the net loss is due to the Company having a decrease in operating expenses of $70,279 and a decrease in other expense of $20,611, as explained above.
Previous wording
The decrease in operating expenses was primarily due to a decrease of $462,500 in litigation settlement expenses, a decrease of $64,897 in legal and professional expenses and research and development expenses decreasing $103,125 to $115,551 during the three months ended March 31, 2024 from $218,676 in the three months ended March 31, 2023.
Current wording
The decrease in operating expenses was primarily due to a decrease of $462,500 in litigation settlement expenses, a decrease of $124,472 in legal and professional expenses and research and development expenses decreasing $142,517 to $181,272 during the six months ended June 30, 2024 from $323,789 in the six months ended June 30, 2023.
Previous wording
As of March 31, 2024, the Company had a negative working capital of $1,859,352. The Company has not yet attained a level of operations which will allow it to meet its current overhead expense obligations. The report of our independent registered public accounting firm on our 2023 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The Company has been focusing its capital and resources towards seeking a Class III PMA for its HemoStyp technology, and has funded its initial operations with private placements, and unsecured loans from related parties. There can be no assurance that adequate financing will continue to be available to the Company and, if available, on terms that are favorable to the Company. Our ability to continue as a going concern is also dependent on many events outside of our direct control, including, among other things, our ability to achieve our business goals and objectives, as well as improvement in the economic climate.
Current wording
As of June 30, 2024, the Company had a negative working capital of $2,064,538. The Company has not yet attained a level of operations, which will allow it to meet its current overhead expense obligations. The report of our independent registered public accounting firm on our 2023 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The Company has been focusing its capital and resources towards seeking a Class III PMA for its HemoStyp technology, and has funded its initial operations with private placements, and unsecured loans from related parties. There can be no assurance that adequate financing will continue to be available to the Company and, if available, on terms that are favorable to the Company. Our ability to continue as a going concern is also dependent on many events outside of our direct control, including, among other things, our ability to achieve our business goals and objectives, as well as improvement in the economic climate.
Previous wording
During 2022, the Company entered into a common stock purchase agreement (“CSPA”) with White Lion, which gives the Company the right, but not the obligation, to require White Lion to purchase up to $10,000,000 of the Company’s common stock, subject to certain limitations and conditions set forth in the CSPA. As of the date of this filing, the Company has received approximately $2.95 million in proceeds from White Lion to pay for its operations and finalization of its Class III PMA application. The sale of additional equity or convertible debt securities would be dilutive to our shareholders. In addition, economic conditions and actions by policymaking bodies are contributing to rising interest rates and significant capital market volatility, which, along with increases in our borrowing levels, could increase our future borrowing costs.
Current wording
The Company entered into a common stock purchase agreement (“CSPA”) with White Lion, which gives the Company the right, but not the obligation, to require White Lion to purchase up to $10,000,000 of the Company’s common stock, subject to certain limitations and conditions set forth in the CSPA. As of the date of this filing, the Company has received approximately $3.0 million in proceeds from White Lion to pay for its operations and finalization of its Class III PMA application. The sale of additional equity or convertible debt securities would be dilutive to our shareholders. In addition, economic conditions and actions by policymaking bodies are contributing to rising interest rates and significant capital market volatility, which, along with increases in our borrowing levels, could increase our future borrowing costs.
Previous wording
The Company’s cash on hand at March 31, 2024 and December 31, 2023 was $80,882 and $95,420, respectively.
Current wording
The Company’s cash on hand at June 30, 2024 and December 31, 2023 was $18,574 and $95,420, respectively.
Previous wording
The following table summarizes selected items from our statements of cash flows for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes selected items from our statements of cash flows for the six months ended June 30, 2024 and 2023:
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 was $405,763. The Company had a net loss of $451,938 offset by amortization expense of $1,012, amortization of right-of-use asset of $346, a decrease in prepaid and other current assets of $7,632 and an increase in accrued liabilities - related party of $49,481. The Company also had a decrease in accounts payable and accrued expenses of $12,296.
Current wording
Net cash used in operating activities for the six months ended June 30, 2024 was $693,481. The Company had a net loss of $883,959 offset by amortization expense of $2,025, write-off of inventory of $33,598, amortization of right-of-use asset of $578, a decrease in prepaid and other current assets of $15,264, an increase in accrued liabilities - related party of $98,962 and an increase in accounts payable and accrued expenses of $40,051.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2023 was $548,141. The Company had net loss of $1,142,706 offset by amortization expense of $1,012, amortization of debt discount of $8,775, stock issued for litigation settlement of $462,500 and a loss on debt settlement of $60,938, a decrease in inventory of $1,132, a decrease in prepaid and other current assets of $7,684, an increase in accounts payable and accrued liabilities of $28,643 and an increase in accrued liabilities - related party of $123,881. The Company also had a decrease in accrued litigation settlement of $100,000.
Current wording
Net cash used in operating activities for the six months ended June 30, 2023 was $1,019,370. The Company had net loss of $1,665,617 offset by amortization expense of $2,025, amortization of debt discount of $17,648, stock issued for litigation settlement of $462,500 and a loss on debt settlement of $80,532, a decrease in inventory of $1,132, a decrease in prepaid and other current assets of $15,369 and an increase in accrued liabilities - related party of $229,711. The Company also had a decrease in accounts payable and accrued expenses of $12,670 and a decrease in accrued litigation settlement of $150,000.
Previous wording
The Company did not have any investing activities during the three months ended March 31, 2024 and 2023.
Current wording
The Company did not have any investing activities during the six months ended June 30, 2024.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2024 was $391,225. This was due to the result of the Company receiving proceeds of $395,425 from the sale of stock offset by making payments of offering costs of $4,200.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2024 was $616,815. This was due to the result of the Company receiving net proceeds of $616,815 from the sale of common stock.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2023 was $566,719. This was due to the result of the Company receiving $578,855 in proceeds from the sale of stock offset by making payments of offerings costs of $3,000 and payments of $9,136 on loan payable.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2023 was $1,142,444. This was due to the result of the Company receiving $1,151,580 in proceeds from the sale of common stock offset by making payments of $9,136 on a loan payable.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Results of Operations for the six months ending June 30, 2024 and 2023
Current report — wording carried from elsewhere
The following table sets forth a summary of certain key financial information for the six months ended June 30, 2024 and 2023:
Current report — wording carried from elsewhere
During the six months ended June 30, 2024 and 2023, the Company had $0 of revenues. The Company did not generate any revenues due to the continued focus of the Company’s capital and resources towards obtaining a Class III PMA.
Current report — wording carried from elsewhere
Other income (expense) for the six months ended June 30, 2024 and 2023 was $(53,688) and $(136,186), respectively. The decrease in other expense was primarily due to a decrease in loss on settlement of debt of $80,532.
Current report — wording carried from elsewhere
Our net loss for the six months ended June 30, 2024 was $883,959 compared to net loss of $1,665,617 for the comparable period of the prior year. The decrease in the net loss was due to the Company having a decrease in operating expenses of $699,160 and a decrease in other expenses of $82,498 as explained above.