You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes appearing elsewhere in this quarterly report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under 'Risk Factors' in our annual report on Form 10-K for the fiscal year ended December 31, 2022, filed with SEC on March 28, 2023.





Company Overview

UHP develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, HemoStyp®, is a neutralized, oxidized, regenerated cellulose ("NORC") derived from cotton and designed to absorb exudate/drainage from superficial wounds and help control bleeding. We are in the process of seeking regulatory approval to sell our Hemostyp product line into the U.S. Class III and European CE Mark surgical markets.

Our HemoStyp Gauze Products

HemoStyp hemostatic gauze is a natural substance created from chemically treated cellulose derived from cotton. It is an effective hemostatic agent registered with the FDA for superficial use under a 510(k) approval obtained in 2012 to help control bleeding from open wounds and body cavities. The HemoStyp hemostatic material contains no chemical additives, thrombin, collagen or animal-derived products, and is hypoallergenic. When the product comes in contact with blood it expands slightly and quickly converts to a translucent gel that subsequently breaks down into glucose and salts. Because of its benign impact on body tissue and the fact that it degrades to non-toxic end products, HemoStyp does not impede the healing of body tissue as compared to certain competing hemostatic products. Laboratory testing has shown HemoStyp to be 100% absorbable in the human body within 24 hours, compared to days or weeks with competing organic regenerated cellulose products. A human trial conducted in 2019 and 2020 demonstrated the effectiveness of HemoStyp in vascular, thoracic and abdominal surgical procedures.






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HemoStyp hemostatic gauze is a flexible, silk-like material that is applied by placing the gauze onto the bleeding tissue. The supple material can be easily folded and manipulated as needed to fit the size of the wound or incision. In surface bleeding and surgical situations, the product quickly converts to a translucent gel that allows the physician or surgeon to monitor the coagulation process. The gel maintains a neutral pH level which avoids damaging the surrounding tissue. In superficial bleeding situations, HemoStyp can be bonded to an adhesive plastic bandage or integrated into a traditional gauze component to address a broad range of needs, including traumatic bleeding injuries and prolonged bleeding following hemodialysis.





 Potential Target Markets

Our HemoStyp material is currently cut to several sizes and configuration and marketed as HemoStyp Gauze. While we have paused our commercial activities to focus on our Class III PMA application, our potential customer base includes, without limitation, the following:





    ·   Hospitals and Surgery Centers for all Internal Surgical usage (in the
        event we obtain FDA Class III approval)
    ·   Hospitals, Clinics and Physicians for external trauma
    ·   EMS, Fire Departments and other First Responders
    ·   Military Medical Care Providers
    ·   Hemodialysis centers
    ·   Nursing Homes and Assisted Living Facilities
    ·   Dental and Oral & Maxillofacial Surgery Offices
    ·   Veterinary hospitals




 Primary Strategy

Our HemoStyp technology received an FDA 510(k) approval in 2012 for use in external or superficial bleeding situations and we believe there is an opportunity for HemoStyp products to address unmet needs in several medical applications that represent attractive commercial opportunities. However, the Class III surgical markets, both domestic and international, represent the most attractive market for our products due to the smaller number of competitors offering Class III approved hemostatic agents and the resulting premium pricing for products that can meet the demanding requirements of the human surgical environment. We believe that our extensive laboratory testing and our completed human trial indicate that the HemoStyp technology could successfully compete against established Class III market participants, and could gain a significant market share. There can be no assurance that an FDA Premarket Approval (PMA) will be granted.

In 2018, we made the decision to focus our efforts and resources on accessing these Class III markets to maximize the value potential of our HemoStyp products. The Class III PMA process required a substantial investment of time and resources so we made the strategic determination to pause our sales and marketing to non-Class III markets in order to devote our full attention to the PMA process. In the fourth quarter of 2021, with our PMA application largely complete and under review by the FDA, we re-engaged with certain consumers and distributors of 510(k) hemostatic products with the objective of developing a revenue channel in this market going forward. Our primary market focus for this initiative includes the first-aid, dental surgery and emergency medicine sectors.

In anticipation of receiving a Class III PMA (which cannot be assured), we are evaluating paths to rapidly grow our revenue and profits in all potential market segments, with the objective of maximizing shareholder value. We do not intend to pursue the full commercialization of our products independently nor to remain an independent company in the long term. Options under consideration include (i) a sale or merger of the Company with an industry leader in the wound care and surgical device sectors, which may include a pre-sale collaboration on commercialization and distribution and (ii) one or more commercial partnerships with established market participants, without any specific, associated sale or merger transaction.






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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, we continue to engage in discussions to evaluate the potential commercial partnerships in anticipation of an FDA decision on our Class III PMA application. There can be no assurances that any specific transaction will occur as a result of these discussions. No assurances can be given that the Company will identify any commercialization candidate(s) or complete a transaction.

Manufacturing and Packaging of our Products

The Company's NORC products will be manufactured to our specifications and using our equipment through a contract manufacturing arrangement with an FDA certified supplier that maintains stringent quality control protocols to assure the uniformity and quality of all of our gauze products. Information on the manufacturing process and our manufacturer's facility has been submitted as part of our PMA submission. Our gauze products are cut to size, packaged and sterilized by service providers in the United States.





Patents and Trademarks

Our NORC technology is protected through patents filed with the U.S. Patent and Trademark Office, which protection currently runs through 2029. In 2020 and 2021, we filed additional U.S. and International patents that protect the use of our NORC technology in a gel or hydrocolloid formulation.

On January 21, 2021, the U.S. Patent Office provided notification of publication of the Company's patent application for the method of forming and using a hemostatic hydrocolloid. This publication does not imply any assurance of the receipt of the patent but establishes an obligation of any party that seeks to use the applicable method to pay royalties for the right to do so. The patent application for this process remains pending as of the date of this filing.

On February 11, 2021, the Company was notified that its application to establish global patent protection for the process of creating and deploying a hydrocolloid (or gel) format of its HemoStyp technology was accepted for publication under the procedures of the Patent Cooperation Treaty ("PCT"), an international patent law treaty which provides a unified procedure for filing a patent application in most foreign countries. We previously filed provisional patent applications for our HemoStyp hydrocolloid process in 2020. In January 2022 the Company initiated steps to register its hydrocolloid patent in the European common market and in additional foreign countries where we intend to commercialize any future HemoStypo gel formats. We can give no assurance that foreign registration of our patents will be granted in any of these jurisdictions.

The Company has registered trademarks for the following product formats:





  · Boo Boo Strips
  · The Ultimate Bandage
  · Hemostrips
  · CelluSTAT
  · Nik Fix





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Results of Operations for the three months ending March 31, 2023 and 2022

The following table sets forth a summary of certain key financial information for the three months ended March 31, 2023 and 2022:





                            For the Three Months
                               Ended March 31,
                             2023            2022

Revenue                  $          -     $        -

Gross profit             $          -     $        -

Operating (expenses)     $ (1,053,975 )   $ (954,501 )

Operating (loss)         $ (1,053,975 )   $ (954,501 )

Other income (expense)   $    (88,731 )   $   (9,763 )

Net (loss)               $ (1,142,706 )   $ (964,264 )

Basic and diluted        $      (0.00 )   $    (0.00 )

Three Months ended March 31, 2023 versus Three Months ended March 31, 2022

Total operating expenses for the first quarter of 2023 and 2022 were $1,053,975 and $954,501, respectively.

The increase in operating expenses is due primarily to a decrease in legal and professional fees of approximately $101,973 offset by an increase in litigation settlement expense of $12,500, an increase in rent expense of $7,500 and an increase in research and development expenses of $166,321 when compared to the three months ended March 31, 2022.

Other income (expense) for the first quarter of 2023 and 2022 was $(88,731) and $(9,763), respectively. The increase in other expense was due to an increase in total interest expense of $18,905 and an increase in loss on settlement of debt $60,063. The increase in interest expense is primarily due to the Company only having total interest expense of $8,880 during the first quarter of 2022 compared to the Company having total interest expense of $27,793, including $8,775 of debt discount amortization on convertible notes payable and convertible notes payable - related party during the first quarter 2023. The increase in the loss on debt settlement is due to the Company issuing common stock with a fair value of $4,001 for the settlement of $3,126 of accrued liabilities during the first quarter of 2022 compared to the Company issuing common stock with a fair value of $248,438 for the settlement of $187,500 of accrued liabilities and accrued liabilities - related party.






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Our net loss for the quarter ended March 31, 2023 was $1,142,706 as compared to net loss of $964,264 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 $99,474 and an increase in other expenses of $78,968, as explained above.

Financial Condition, Liquidity and Capital Resources

As of March 31, 2023, the Company had a negative working capital of $2,199,317. The Company has not yet attained a level of operations which will allow it to meet its current overhead expense obligations. The report of our independent registered public accounting firm on our 2022 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The Company has been focusing its capital and resources towards seeking a Class III PMA for its HemoStyp technology, and has funded its initial operations with private placements, and unsecured loans from related parties. There can be no assurance that adequate financing will continue to be available to the Company and, if available, on terms that are favorable to the Company. Our ability to continue as a going concern is also dependent on many events outside of our direct control, including, among other things, our ability to achieve our business goals and objectives, as well as improvement in the economic climate.

During 2022, the Company entered into a common stock purchase agreement ("CSPA") with White Lion, which gives the Company the right, but not the obligation, to require White Lion to purchase up to $10,000,000 of the Company's common stock, subject to certain limitations and conditions set forth in the CSPA. As of the date of this filing, the Company has received approximately $880,573 in proceeds from White Lion to pay for its operations and finalization of its Class III PMA application. The sale of additional equity or convertible debt securities would be dilutive to our shareholders. In addition, economic conditions and actions by policymaking bodies are contributing to rising interest rates and significant capital market volatility, which, along with increases in our borrowing levels, could increase our future borrowing costs.





Cash Flows

The Company's cash on hand at March 31, 2023 and December 31, 2022 was $31,955 and $13,377, respectively.

The following table summarizes selected items from our statements of cash flows for the three months ended March 31, 2023 and 2022:





                                              For the Three Months
                                                 Ended March 31,
                                               2023           2022

Net cash used in operating activities $ (548,141 ) $ (195,746 ) Net cash used in investing activities

                -        (40,500 )

Net cash provided by financing activities 566,719 247,372

Net increase in cash and cash equivalents $ 18,578 $ 11,156

Net Cash Provided by (Used in) Operating Activities

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.

Net cash used in operating activities for the three months ended March 31, 2022 was $195,716. The Company had net loss of $964,264 offset by stock for services and compensation of $10,200, amortization expense of $1,012, a loss on debt settlement of $875, an increase in accounts payable and accrued expenses of $191,052, an increase in accrued liabilities - related party of $135,409 and an increase in accrued litigation settlement of $430,000.






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Net Cash Used by Investing Activities

The Company did not have any investing activities during the three months ended March 31, 2023.

The Company paid $40,500 related to the patent application fees during the three months ended March 31, 2022.

Net Cash Provided by (Used in) Financing Activities

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 $575,855 in proceeds from the sale of stock offset by making payments of $9,136 on loan payable.

Net cash provided by financing activities for the three months ended March 31, 2022 was $247,372. This was due to the result of the Company receiving $77,292 in proceeds from the sale of stock and receiving $185,000 from related party loans offset by making payments of $14,920 on loan payable.

Off-Balance Sheet Arrangements

As of March 31, 2023, we have no off-balance sheet arrangements.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles of the United States ("GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses in the financial statements and accompanying notes. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company. Based on this definition, we have the critical accounting estimates identified below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results which are found in Note 2 - Significant Accounting Policies of our 2022 Annual Report on Form 10-K and Note 2 - Significant Accounting Policies in the accompanying financial statements. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.





Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation expense for employees and non-employees is measured at the grant date fair value. Stock-based compensation for all stock-based awards to employees and directors is recognized as an expense over the requisite service period, which is generally the vesting period.






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