Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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, 2024, filed with SEC on March 28, 2025.

Company Overview

UHP develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, CelluSTAT®, 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 human surgical markets.

Developments

We are continuing on our path to seek FDA Premarket Approval (PMA) for our CelluSTAT Hemostatic Gauze products to implement our business strategy.

In March 2024, we submitted a full application for Premarket Approval to the FDA. The FDA responded in June 2024 with a "Deficiencies Letter" listing approximately 40 specific comments and requests for additional information covering the device description, sterility & shelf life, clinical safety & performance testing, and biocompatibility sections of the PMA application. In August 2024, we submitted a Submission Issue Request (SIR) to the FDA outlining our plan to address and respond to the FDA's comments. Then, in August 2024, at the FDA's request, the Company followed-up with a condensed list of questions relating to the prior SIR submission.

In October 2024, the Company and FDA conducted a virtual meeting to discuss the SIR and the follow-up questions. During the discussion, the Company noted the results of its 2019 clinical trial involving 236 patients (of whom 118 were treated with its hemostatic gauze) that showed statistically superior performance in time to hemostasis using CelluSTAT over Ethicon's Surgicel Original, the current standard of care. The study results also showed no evidence of heterogeneity of results across procedure categories, surgeons, or clinical sites, indicating both poolability and generalizability of study results. The Company also noted that none of the adverse events that occurred during the study were attributable to its hemostatic gauze product.

Notwithstanding the safety record from the original clinical study, the FDA requested more data to confirm the safety and effectiveness of CelluSTAT in surgical procedures in the intestinal and thoracic organ space, where organ movement may impact the post operative stability of a hemostat and where observation of post operative rebleeding is more difficult. To address this concern, we proposed to enroll 27 human subjects in a multi-site study as an extension of the original pivotal study, with patients undergoing open surgical procedures within the organ space. The supplemental study process would consist of submitting an Investigational Device Exemption (IDE) for FDA approval, identifying and contracting suitable surgical sites, enrolling patents, and data collection and analysis.

From September 23 through October 4, 2024, the FDA conducted a Bioresearch Monitoring Program (BIMO) Inspection of our records and procedures relating to our clinical study, following which the FDA delivered its Inspectional Observations on Form 483. On October 25, 2024, we submitted our response to the FDA's observations, which the FDA will consider in developing its final report on the BIMO Inspection. On March 25, 2015, FDA issued a Warning Letter identifying five violations of required clinical procedures occurred during the 2019 clinical trial. On April 14, 2025, we submitted a response to FDA that addressed the violations. As of the date of this filing, the FDA has not responded to our submission responding to the Warning Letter.

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On March 27, 2025, we submitted an IDE application to the FDA seeking approval to conduct the above referenced 27-subject clinical trial. On April 25, 2025, the FDA issued a notice of disapproval of the IDE application, citing the unresolved Warning Letter regarding the audit of the 2019 clinical study. No other deficiencies were noted in the FDA communication.

The timing to resolve the FDA Warning Letter is uncertain. Since the April notice of disapproval of our IDE application, UHP has engaged with the FDA to seek a path to timely approval of a new IDE and commencement of the clinical trial. We have retained a regulatory attorney to support our efforts in this regard and are discussing with the FDA various solutions including, among other options, conducting a new pivotal clinical trial that will yield sufficient data to confirm the safety and effectiveness of our product without reliance on data from the 2019 study.

There can be no assurance that our PMA application will be approved.

Our CelluSTAT Gauze Products

CelluSTAT Hemostatic Gauze (formerly branded as HemoStyp) 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 CelluSTAT 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 cellulose and salts. Because of its benign impact on body tissue and the fact that it degrades to non-toxic end products, CelluSTAT does not impede the healing of body tissue as compared to certain competing hemostatic products.

CelluSTAT 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, CelluSTAT 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 CelluSTAT material is currently cut to several sizes and configuration and marketed as CelluSTAT 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

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Primary Strategy

Our CelluSTAT 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 CelluSTAT products to address unmet needs in several medical applications that represent attractive commercial opportunities. However, the Class III human 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 CelluSTAT technology could successfully compete against established Class III market participants, and could gain a significant market share. As described above, we are in the process of seeking FDA pre-market approval for our CelluSTAT product. There can be no assurance that an FDA PMA will be granted.

In anticipation of receiving a Class III PMA (which cannot be assured), we are evaluating paths to rapidly develop and grow our revenue and profits in all target 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.

The Company has been contacted by several medical technology companies that are active in the surgical equipment and hemostatic products sectors, and who have expressed an interest in the Company's products and business strategy. We continue to evaluate the potential commercial partnerships in anticipation of an FDA decision on our Class III PMA application. No assurances can be given that the Company will identify any commercialization candidate(s) or enter into a transaction.

Manufacturing and Packaging of our Products

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

Patents and Trademarks

Our hemostatic gauze technology is protected through patents granted by the U.S. Patent and Trademark Office, which protection currently runs through 2029.

The Company has registered trademarks and trademark applications for the following product formats:

	·	BooBoo Strips
	·	HEMOSTYP
	·	The Ultimate Bandage
	·	HemoStrip
	·	CelluSTAT
	·	Nik Fix

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Results of Operations for the three months ending September 30, 2025 and 2024

The following table sets forth a summary of certain key financial information for the three months ended September 30, 2025 and 2024:

		For the Three Months Ended September 30,
		2025				2024
Revenue		$	-			$	-
Gross profit		$	-			$	-
Operating (expenses)		$	(233,179	)		$	(391,903	)
Operating (loss)		$	(233,179	)		$	(391,903	)
Other income (expense)		$	(52,415	)		$	88,241
Net income (loss)		$	(285,594	)		$	(303,662	)
Net loss per common share - basic and diluted		$	(0.00	)		$	(0.00	)

Three Months ended September 30, 2025 versus Three Months ended September 30, 2024

During the three months ended September 30, 2025 and 2024, 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.

Operating Expenses

Total operating expenses for the three months ended September 30, 2025 and 2024 were $233,179 and $391,903, respectively.

The decrease in operating expenses for the three months ended September 30, 2025 was primarily due to a decrease in consulting expenses of $158,521 as the Company terminated the services of certain consultants, and a decrease in research and development expenses of $40,551 as the Company purchased fewer external lab testing services, offset by an increase in legal services of $43,480 as the Company retained regulatory counsel to assist in correspondence with the FDA.

Other income (expense)

Other income (expense) for the three months ended September 30, 2025 and 2024 was $(52,415) and $88,241, respectively. The change in other income (expense) was due to an increase in interest expense of $25,571 from the larger outstanding loan balances and a decrease in gain on settlement of debt of $115,085 from a settlement of accounts payable in the same period of the prior year with no similar settlement in the current period.

Our net loss for the three months ended September 30, 2025 was $285,594 as compared to net loss of $303,662 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 $158,724 offset by an increase in other expense of $140,656, as explained above.

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Results of Operations for the nine months ending September 30, 2025 and 2024

The following table sets forth a summary of certain key financial information for the nine months ended September 30, 2025 and 2024:

		For the Nine Months Ended June 30,
		2025				2024
Revenue		$	-			$	-
Gross profit		$	-			$	-
Operating (expenses)		$	(1,990,751	)		$	(1,222,174	)
Operating (loss)		$	(1,990,751	)		$	(1,222,174	)
Other income (expense)		$	(141,689	)		$	34,553
Net (loss)		$	(2,132,440	)		$	(1,187,621	)
Net loss per common share - basic and diluted		$	(0.01	)		$	(0.00	)

Nine Months ended September 30, 2025 versus Nine Months ended September 30, 2024

During the nine months ended September 30, 2025 and 2024, the Company had $0 of revenues, respectively. 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.

Operating Expenses

Total operating expenses for the nine months ended September 30, 2025 and 2024 were $1,990,751 and $1,222,174, respectively.

The increase in operating expenses was primarily due to an increase of $1,120,125 in stock-based compensation offset by a decrease of approximately $330,058 in professional expenses. The increase in stock-based compensation is due to the vesting of 4,725,000 RSUs and recording $1,120,125 as stock-based compensation. The decrease in professional expenses is due to the Company terminating services with certain consultants.

Other income (expense)

Other income (expense) for the nine months ended September 30, 2025 and 2024 was $(141,689) and $34,553, respectively. The change in other income (expense) was due to an increase in interest expense of $61,157 from the larger outstanding loan balances and a decrease in gain on settlement of debt of $115,085 from a settlement of accounts payable in the same period of the prior year with no similar settlement in the current period.

Our net loss for the nine months ended September 30, 2025 was $2,132,440 as compared to net loss of $1,187,621 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 $768,577 and an increase in other expense of $176,242, as explained above.

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Financial Condition, Liquidity and Capital Resources

As of September 30, 2025, the Company had a negative working capital of $1,963,227. 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 2024 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 CelluSTAT 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.

The Company entered into a common stock purchase agreement ("CSPA") with White Lion, which gave 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. The Commitment Period (as defined in the CSPA) ended on October 1, 2025 and has not been extended. We are evaluating alternatives to raise external capital to fund our operations on terms that minimize dilution to existing shareholders which may include agreements similar to the CSPA.

Cash Flows

The Company's cash on hand at September 30, 2025 and December 31, 2024 was $18,376 and $168,883, respectively.

The following table summarizes selected items from our statements of cash flows for the nine months ended September 30, 2025 and 2024:

		For the Nine Months Ended September 30,
		2025				2024
Net cash used in operating activities		$	(633,815	)		$	(1,013,278	)
Net cash used in investing activities			-				-
Net cash provided by financing activities			483,308				961,641
Net increase (decrease) in cash and cash equivalents		$	(150,507	)		$	(51,637	)

Net Cash Used in Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2025 was $633,815. The Company had a net loss of $2,132,440, amortization of right-of-use asset of $460, and an increase in prepaid and other current assets of $1,953 offset by stock for services and compensation of $1,120,125, amortization expense of $3,037, an increase in accounts payable and accrued expenses of $237,916, an increase in accrued liabilities - related party of $65,193 and an increase in accrued compensation of $74,767.

Net cash used in operating activities for the nine months ended September 30, 2024 was $1,013,278. The Company had a net loss of $1,187,621 and a gain on settlement of debt of $115,085 offset by amortization expense of $3,038, write-off of inventory of $33,598, amortization of right-of-use asset of $582, a decrease in prepaid and other current assets of $2,896, an increase in accrued liabilities - related party of $195,193 and an increase in accounts payable and accrued expenses of $54,121.

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Net Cash Used in Investing Activities

The Company did not have any investing activities during the nine months ended September 30, 2025 and September 30, 2024.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was $483,308. This was due to the result of the Company receiving proceeds of $420,000 from convertible notes, receiving net proceeds of $63,308 from the sale of common stock, receiving advances from related party of $20,000 offset by repayment of advances from related party of $20,000.

Net cash provided by financing activities for the nine months ended September 30, 2024 was $961,641. This was due to the result of the Company receiving net proceeds of $811,841 from the sale of common stock and $150,000 in proceeds from a note payable.

Off-Balance Sheet Arrangements

As of September 30, 2025, 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 2024 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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