Part I. FINANCIAL INFORMATION

ITEM 1. Condensed Financial Statements.

See notes to condensed financial statements

UNITED-GUARDIAN, INC.

BALANCE SHEETS

See notes to condensed financial statements

UNITED-GUARDIAN, INC.

BALANCE SHEETS

(continued)

LIABILITIES AND STOCKHOLDERS'EQUITY

See notes to condensed financial statements

UNITED-GUARDIAN, INC.

STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2025

THREE MONTHS ENDED MARCH 31, 2024

See notes to condensed financial statements

UNITED-GUARDIAN, INC.

STATEMENTS OF CASH FLOWS
(UNAUDITED)

See notes to condensed financial statements

UNITED-GUARDIAN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

1.

Business

United-Guardian, Inc. ("Company") is a Delaware corporation that, through its Guardian Laboratories division, manufactures, markets and develops specialty cosmetic ingredients, pharmaceutical products, medical lubricants and sexual wellness ingredients. In October 2023, the Company entered into a distribution agreement with Brenntag Specialties, a global market leader in chemicals and ingredients distribution, for the distribution of its new Natrajel^® line of sexual wellness ingredients in the United States, Canada, Mexico, Central America and South America. Although there were no sales of these products during 2024, the Company anticipates that it will begin manufacturing and reporting sales of this new line of products in 2025.

The Company conducts various Research and Development ("R&D") activities. Our R&D department primarily develops new and unique specialty cosmetic and sexual wellness ingredients. We also develop new medical lubricants for our medical customers. The Company develops new products using natural and environmentally friendly raw materials, which is a priority for many of our cosmetic customers. Our R&D department also modifies, refines, and expands the uses for existing products, with the goal of further developing the markets that our products are used in. All the products that we market, except for Renacidin^®, are produced at our facility in Hauppauge, New York. Renacidin, a urological irrigation solution, is manufactured for us by an outside contract manufacturer.

2.	Basis of Presentation

Interim condensed financial statements of the Company are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") for interim financial information, pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of financial statements for the interim periods have been included. The results of operations for the three months ended March 31, 2025 (also referred to as the "first quarter of 2025") are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2025. The interim unaudited condensed financial statements and notes thereto should be read in conjunction with the audited condensed financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2024.

3.	Segment Information

The Company operates its business under one operating segment, which is also its reportable segment. The Company's chief operating decision maker ("CODM"), who is the President, reviews financial information presented at the consolidated level and decides how to allocate resources based on financial metrics, including net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM, along with our Board of Directors, use such financial metrics, including net income, to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits or allocate to other parts of the organization, such as working capital needs, mandatory and discretionary capital expenditures or other growth opportunities that may arise that are in our best interest and the best interest of our stockholders.

Net income, other financial metrics and sales forecasts are used to monitor budget versus actual results. The reported segment revenue, segment profit or loss and significant segment expenses are the same as the consolidated results disclosed on the consolidated statements of income.

4.	Impact of Global Supply Chain Instability, Inflation and Tariffs

We are actively monitoring trade policy and tariff announcements including the recent executive orders issued by the executive branch of the United States ("U.S.") federal government regarding tariffs on imports from various countries, with a focus on China as those tariffs have the greatest potential to significantly impact our business. In addition, we are monitoring the potential impact of actions taken by these countries in response to the announced tariffs. A significant amount of our cosmetic ingredient and medical lubricant sales are reliant on shipments to China. If significant tariffs or other restrictions are placed on Chinese imports, or any countermeasures are taken by China, our business, financial condition or results of operations could be materially and adversely affected. Such tariffs may make our products less cost competitive and reduce gross margins, especially in China, where we face significant competition from Asian companies that manufacture and sell products that are competitive with our products. Furthermore, we may not be able to increase our prices for our products sufficiently enough to offset these tariffs, and if we raise prices in response to these tariffs, demand for our products in certain regions may be reduced.

Many of our products are used in the formulation of finished products that are manufactured in China and then imported back into the U.S. for sale. There is the possibility that the tariffs levied on these finished products could result in an increase in their price, which could potentially impact demand for these products in the U.S.

We source products through numerous suppliers, many of whom have established long-term relationships with us. While we obtain most of our raw materials and lab supplies from domestic sources, we have three suppliers that obtain their raw materials from China. These materials are not purchased by us in large quantities, and we have adequate stock on hand to cover the next six months. In addition, we have one direct raw material supplier in China; however, the raw materials we purchase from this supplier are not in large quantities and the effect of this tariff would not materially impact the pricing of our products.

At this time, the overall impact on our business related to these or any other tariffs that may be imposed, remains uncertain and depends on multiple factors, including the duration and expansion of current tariffs, future changes to tariff rates, scope or enforcement, retaliatory measures by impacted trade partners, inflationary effects, and the effectiveness of our responses in managing these challenges.

5.	Use of Estimates

In preparing financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates. Such estimated items include the allowance for credit losses, reserve for inventory obsolescence, accrued distribution fees, outdated material returns, possible impairment of marketable securities and the allocation of overhead.

6.	Cash and Cash Equivalents

For financial statement purposes, the Company considers as cash equivalents all highly liquid investments with an original maturity of three months or less at the time of purchase. The Company deposits cash and cash equivalents with financially strong, FDIC-insured financial institutions, and believes that any amounts above FDIC insurance limitations are at minimal risk. The amounts held in excess of FDIC limits at any point in time are considered temporary and are primarily due to the timing of maturities of United States Treasury Bills and Certificates of Deposit. Cash and cash equivalents held in these accounts are currently insured by the Federal Deposit Insurance Corporation ("FDIC") up to a maximum of $250,000. At March 31, 2025 approximately $962,000 exceeded the FDIC limit, compared with $234,000 at December 31, 2024. The Company also invests in certain money market mutual funds that are protected as securities by the Securities Investor Protection Corporation ("SIPC"). At March 31, 2025, cash held in these money market mutual funds was below the SIPC limit. At December 31, 2024, cash held in these money market mutual funds of approximately $563,000 exceeded the SIPC limit.

The following table summarizes our cash and cash equivalents:

		March 31, 2025				December 31, 2024
Demand Deposits		$	1,186,056			$	404,801
Money Market Funds			83,156				1,470,854
Total cash and cash equivalents		$	1,269,212			$	1,875,655

7.	Accounts Receivable and Reserves

In accordance with FASB ASC Topic 326, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", ("ASC 326"), the Company presents financial assets at the net amount expected to be collected, requiring immediate recognition of estimated credit losses expected to occur over the asset's remaining life. This is in contrast to previous U.S. GAAP, under which credit losses were not recognized until it was probable that a loss had been incurred. The Company performed its expected credit loss calculation based on historical accounts receivable write-offs, including consideration of then-existing economic conditions and expected future conditions. The adoption of this ASU did not have a significant impact on the financial statements. Prior to the implementation of ASU No. 2016-13, the Company calculated a reserve for accounts receivable by considering many factors including historical data, experience, customer types, credit worthiness and economic trends.

The carrying amount of accounts receivable is reduced by an allowance for credit losses that reflects the Company's best estimate of the amounts that will not be collected as of the balance sheet date. This allowance is based on the credit losses expected to arise over the life of the asset and is based on the Current Expected Credit Losses ("CECL"). At March 31, 2025 and December 31, 2024 the allowance for credit losses related to accounts receivable amounted to $18,114 and $14,342, respectively.

8.	Revenue Recognition

The Company records revenue in accordance with ASC Topic 606 "Revenue from Contracts with Customers." Under this guidance, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration expected to be received in exchange for those goods or services. Our principal source of revenue is product sales.

Our sales, as reported, are subject to a variety of deductions, some of which are estimated. These deductions are recorded in the same period in which the revenue is recognized. Such deductions, primarily related to the sale of our pharmaceutical products, include chargebacks from the United States Department of Veterans Affairs ("VA"), rebates in connection with our current participation in Medicare programs, distribution fees, discounts, and outdated product returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on sales for a reporting period.

During 2025 and 2024, we participated in various government drug rebate programs related to the sale of Renacidin, our most important pharmaceutical product. These programs include the Veterans Affairs Federal Supply Schedule ("FSS"), and the Medicare Part D Coverage Gap Discount Program ("CGDP"). These programs require us to sell our products at a discounted price, typically in the form of a rebate. Our sales, as reported, are net of these rebates, some of which are estimated and are recorded in the same period that the revenue is recognized.

On January 1, 2025, the Centers for Medicare & Medicaid Services ("CMS") implemented a new Medicare Part D Manufacturer Discount Program ("Discount Program"), which replaced the prior CGDP. The new Discount Program eliminates the coverage gap benefit phase, introduces pharmaceutical manufacturer discounts in the initial and catastrophic coverage phases, and lowers the cap on enrollee out-of-pocket costs. Under the new Discount Program, additional rebates are expected to be owed by pharmaceutical manufacturers due to the restructuring of the benefit periods and removal of the cap that was in place that limited the drug manufacturer's liability. The overall financial impact of this new program will vary depending on the products being reimbursed but it is expected to increase Medicare Part D rebates for drug manufacturers.

On January 31, 2024, we were notified by CMS that we qualified as a "specified small manufacturer" and would be entitled to a multi-year phase-in period during which we would pay a lower percentage discount on drugs dispensed to beneficiaries. Based on our "specified small manufacturer" designation, it appears, based on our current level of sales through the Medicare Part D Program, we would have reduced rebate liabilities in years 2025 and 2026, with rebates gradually increasing each year thereafter, until they reach their full phase-in by 2031. By the end of the phase in period in 2031, these rebate liabilities are expected to significantly exceed the liabilities we have recorded under the CGDP in previous years.

As long as a valid purchase order has been received and future collection of the sale amount is reasonably assured, we recognize revenue from sales of our products when those products are shipped, which is when our performance obligation is satisfied. Our cosmetic products are shipped EXW from our facility in Hauppauge, NY, and the risk of loss and responsibility for the shipment passes to the customer upon shipment. Sales of our medical lubricant products are deemed final upon shipment, and we have no obligation to repurchase or allow the return of these goods unless they are defective. Sales of our pharmaceutical products are final upon shipment unless (a) they are found to be defective; (b) the product is damaged in shipping; (c) the product is too close to its expiration date for the customer to sell; or (d) the product is expired but is not more than one year after its expiration date. These return policies are in conformance with standard pharmaceutical industry practice. We estimate an allowance for outdated material returns based on previous years' historical returns of our pharmaceutical products.

The Company does not make sales on consignment, and the collection of the proceeds of the sale of any of our products is not contingent upon the customer being able to sell the goods to a third party.

Any allowances for returns are taken as a reduction of sales within the same period the revenue is recognized. Such allowances are determined based on historical experience under ASC Topic 606-10-32-8. We have not experienced significant fluctuations between estimated allowances and actual activity.

The Company has distribution agreements with certain distributors of our pharmaceutical products that entitle those distributors to distribution and service-related fees. We record distribution fees, and estimates of distribution fees, as offsets to revenue.

Disaggregated revenue by product class is as follows:

		Three months ended March 31,
		2025				2024
Cosmetic ingredients		$	698,998			$	1,876,482
Pharmaceuticals			1,168,458				950,323
Medical lubricants			613,671				428,139
Net Sales		$	2,481,127			$	3,254,944

The Company's cosmetic ingredients are marketed worldwide by five distributors, of which U.S.-based Ashland Specialty Ingredients ("ASI") purchases the largest volume. Approximately 29% of the Company's total sales were to customers located outside of the United States in the first quarter of 2025, compared with approximately 13% in the first quarter of 2024.

Disaggregated revenue by geographic region is as follows:

		Three months ended March 31,
		2025				2024
United States*		$	1,757,267			$	2,818,937
Other countries		723,860					436,007
Net Sales		$	2,481,127			$	3,254,944

*Since all purchases by ASI are shipped to ASI's warehouses in the U.S. they are reported as U.S. sales for financial reporting purposes. However, ASI has reported to the Company that in the first quarter of 2025, approximately 69% of ASI's sales of the Company's products were to customers in other countries, with China representing approximately 37% of ASI's sales of the Company's products. In the first quarter of 2024, approximately 82% of ASI's sales of the Company's products were to customers in other countries, with China representing approximately 43% of ASI's sales of the Company's products.

9.	Accounting for Financial Instruments - Credit Losses

The Company recognizes an allowance for our trade receivables to present the net amount expected to be collected as of the balance sheet date. This allowance is based on the credit losses expected to arise over the life of the asset and are based on Current Expected Credit Losses (CECL).

The Company performs ongoing credit evaluations of its customers and adjust credit limits, as determined by a review of current credit information. We continuously monitor collection and payments from customers and maintain an allowance for credit losses based upon historical experience, anticipation of uncollectible accounts receivable and any specific customer collection issues that have been identified. While our credit losses have historically been low and within expectations, we may not experience the same credit loss rates that have historically been attained in the future. The receivables are highly concentrated in a relatively small number of customers. Therefore, a significant change in the liquidity, financial position, or willingness to pay timely, or at all, of any one of our significant customers would have a significant impact on our results of operations and cash flows. When determining the reserve for credit losses, we take into consideration current and future economic conditions and the impact that these changing dynamics may have on potential future losses.

The timing between recognition of revenue for product sales and the receipt of payment is not significant. The Company's standard credit terms, which vary depending on the customer, range between 30 and 60 days. We provide an allowance for credit losses related to our accounts receivable for which collection is doubtful in accordance with ASU 2016-13. In accordance with FASB ASC Topic 326, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, ("ASC 326"), we present financial assets at the net amount expected to be collected, requiring immediate recognition of estimated credit losses expected to occur over the asset's remaining life.

Prompt-pay discounts are offered to some customers; however, due to the uncertainty of the customers taking the discounts, the discounts are recorded when they are taken.

10.	Marketable Securities

The Company's marketable securities include investments in equity mutual funds, United States Treasury Bills ("U.S. Treasury Bills") and Certificates of Deposit with maturities longer than 3 months. Our marketable equity securities are reported at fair value with the related unrealized and realized gains and losses included in net income. U.S Treasury Bills and Certificates of Deposit are recorded at amortized cost. Realized gains or losses on mutual funds are determined on a specific identification basis. We evaluate our investments periodically for possible other-than-temporary impairment by reviewing factors such as the length of time and extent to which fair value had been below cost basis, the financial condition of the issuer and our ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery of market value.

The disaggregated net gains and losses on the marketable securities recognized in the statements of income for the three months ended March 31, 2025 and 2024 are as follows:

		Three months ended March 31,
		2025				2024
Net gains recognized during the period on marketable securities		$	12,350			$	41,496
Less: Net losses realized on marketable securities sold during the period			1,507				-
Net unrealized gains recognized during the reporting period on marketable securities still held at the reporting date		$	13,857			$	41,496

The fair values of our marketable securities are determined in accordance with US GAAP, with fair value being defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, we utilize the three-tier value hierarchy, as prescribed by US GAAP, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company's marketable equity securities, which are considered available-for-sale securities, are re-measured to fair value on a recurring basis and are valued using Level 1 inputs using quoted prices (unadjusted) for identical assets in active markets. The following tables summarize the Company's investments:

March 31, 2025(unaudited)

		Cost				Fair Value				Unrealized Gain
Equity securities:
Equity and other mutual funds		$	639,217			$	682,051			$	42,834
Other short-term investments:
Fixed income Certificates of Deposit (original maturities > 3 months)			370,000				370,000				-
U.S. Treasury Bills (original maturities > 3 months)			5,799,946				5,799,946				-
Total other short-term investments			6,169,946				6,169,946				-
Total marketable securities		$	6,809,163			$	6,851,997			$	42,834

December 31, 2024(audited)

		Cost				Fair Value				Unrealized Gain
Equity securities:
Equity and other mutual funds		$	634,705			$	663,682			$	28,977
Other short-term investments:
Fixed income Certificates of Deposit (original maturities > 3 months)			570,000				570,000				-
U.S. Treasury Bills (original maturities > 3 months)			6,288,943				6,288,943				-
Total other short-term investments			6,858,943				6,858,943				-
Total marketable securities		$	7,493,648			$	7,522,625			$	28,977

Investment income is recognized when earned and consists principally of dividend income from equity mutual funds and interest income on United States Treasury Bills, Certificates of Deposit and money market funds. Realized gains and losses on sales of investments are determined on a specific identification basis.

Proceeds from the redemption of marketable securities were $6,148,493 in the first quarter of 2025 and included realized losses of $1,507. Proceeds from the redemption of marketable securities were $150,000 in the first quarter of 2024, and norealized losses or gains were recorded.

11.	Inventories

		March 31,				December 31,
		2025				2024
Inventories consist of the following:		(Unaudited)				(Audited)
Raw materials		$	492,627			$	448,113
Work in process			18,915				58,699
Finished products			991,519				945,183
Total inventories		$	1,503,061			$	1,451,995

Inventories are valued at the lower of cost and net realizable value. Net realizable value is equal to the selling price less the estimated costs of selling and/or disposing of the product. Cost is determined using the average cost method, which approximates cost determined by the first-in, first-out ("FIFO") method. Finished product inventories at March 31, 2025 and December 31, 2024 are stated net of a reserve of $30,006 and $32,792, respectively, for slow-moving and obsolete inventory.

12.	Income Taxes

The Company's tax provision is based on its estimated annual effective tax rate. We continue to fully recognize our tax benefits, and as of March 31, 2025 and December 31, 2024, we did not have any unrecognized tax benefits. Our provision for income taxes for the three months ended March 31, 2025 and 2024 comprises the following:

		Three months ended March 31
		2025				2024
Provision for federal income taxes - current		$	107,860			$	169,940
Provision for state income taxes - current			813				225
Provision for (benefit from) federal income taxes - deferred			38,391				70,569
Total provision for income taxes		$	147,064			$	240,734

13.	Defined Contribution Plan

The Company sponsors a 401(k) defined contribution plan ("DC Plan") that provides for a dollar-for-dollar employer matching contribution of the first 4% of each employee's pay that is deferred by the employee. Employees become fully vested in employer matching contributions immediately.

The Company also makes discretionary contributions to each employee's account based on a "pay-to-pay" safe-harbor formula that qualifies the 401(k) Plan under current IRS regulations. Employees become vested in the discretionary contributions as follows: 20% after twoyears of employment, and 20% for each year of employment thereafter until the employee becomes fully vested after sixyears of employment. The Company accrued $28,750 in contributions to the DC Plan for the three months ended March 31, 2025 and $27,250 for the three months ended March 31, 2024. In the first quarter of 2025 and 2024, the Company made discretionary contributions of $115,000 and $109,000, respectively, to the DC Plan. These payments represented the Company's 2024 and 2023 accrued discretionary contributions, respectively.

14.	Other Information

Accrued expenses:

		March 31, 2025				December 31, 2024
		(unaudited)				(audited)
Bonuses		$	365,129			$	290,000
Distribution fees			435,088				441,397
Payroll and related expenses			127,230				73,915
Reserve for outdated material			277,164				276,732
Insurance			118,667				-
Audit fees			30,250				73,364
Annual report expenses			48,182				83,238
Company 401K contribution			28,750				115,000
Sales rebates			68,427				90,904
Other			28,849				23,383
Total accrued expenses		$	1,527,736			$	1,467,933

15.	Recent Accounting Pronouncements

On November 4, 2024, the FASB issued ASU 2024-03 "Disaggregation of Income Statement Expenses" ("DISE"). This guidance requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. Subsequently issued ASU 2025-01, clarified the effective date of this standard. This guidance is effective for annual reporting periods beginning after December 15, 2026, and for interim periods, within annual reporting periods beginning after December 15, 2027.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes- Improvements to Income Tax Disclosures". This guidance enhances the transparency and decision usefulness of income tax disclosures. More specifically, the amendments relate to the income tax rate reconciliation and income taxes paid disclosures and require 1) consistent categories and greater disaggregation of information in the rate reconciliation and 2) income taxes paid disaggregated by jurisdiction. This guidance is effective for fiscal years beginning after December 31, 2024. On January 1, 2025, the Company implemented this standard and will apply the guidance under the new standard to include additional disclosures in its annual Form 10-K for the year ended December 31, 2025.

In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures". This amendment requires additional disclosures by public entities, including those with a single reportable segment, to disclose significant segment expenses and other segment items for each reportable segment. The guidance applies to fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. On January 1, 2024, we adopted the new standard and applied the guidance under the new standard to include additional disclosures for our single reportable segment. See note 3 for additional information.

16.	Concentration of Credit Risk

Customer concentration: Accounts receivable potentially exposes the Company to concentrations of credit risk. The Company monitors the amount of credit it allows each of its customers, using the customer's prior payment history to determine how much credit to allow or whether any credit should be given at all. It is the Company's policy to discontinue shipments to any customer that is substantially past due on its payments. The Company sometimes requires payment in advance from customers whose payment record is questionable. As a result of its monitoring of the outstanding credit allowed for each customer, as well as the fact that the majority of the Company's sales are to customers whose satisfactory credit and payment record has been established over a long period, the Company believes that its credit risk from accounts receivable has been reduced.

For the three months ended March 31, 2025, threeof the Company's pharmaceutical distributors and oneof its cosmetic ingredient distributors collectively accounted for 67% of the Company's gross sales and 67% of its outstanding accounts receivable. During the three months ended March 31, 2024, the same threepharmaceutical distributors and cosmetic ingredient distributor were together responsible for a total of approximately 83% of the Company's gross sales. They also accounted for 90% of the Company's outstanding accounts receivable at March 31, 2024.

17.	Supplier Concentration

Most of the principal raw materials used by the Company consist of common industrial organic and inorganic chemicals and are available in ample supply from numerous sources. However, there are some raw materials used by the Company that are not readily available or require long lead times. During the first quarter of 2025, the Company had threemajor raw material vendors that collectively accounted for approximately 78% of the raw material purchases by the Company. During the first quarter of 2024, the Company had fourmajor raw material vendors that collectively accounted for approximately 89% of the raw material purchases by the Company. In addition to the Company's raw materials concentration, the Company utilizes one contract manufacturer for the production of its pharmaceutical product, Renacidin. Any disruption in this manufacturer's operations could have a material impact on the Company's revenue stream.

18.	Earnings Per Share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued.

Basic and diluted earnings per share amounted to $0.12 and $0.20 for the three months ended March 31, 2025 and 2024, respectively.

19.	Related Party Transactions

The Company's consulting agreement with Ken Globus, its former President, expired on May 31, 2024 and there were no consulting related payments to Mr. Globus during the first quarter of 2025. For the quarter ended March 31, 2024, the Company made payments of $10,000 to Ken Globus for consulting services subsequent to his departure from the Company. Ken Globus is a director of the Company and currently serves as Chairman of the Board of Directors.

For the quarters ended March 31, 2025 and 2024, the Company paid PKF O'Connor Davies $4,000 and $5,250 respectively, for accounting and tax services. Lawrence Maietta, a partner at PKF O'Connor Davies, is a director of the Company.

20.

Dividends

On January 27, 2025, the Company's Board of Directors declared a cash dividend of $0.35 per share, which was paid on February 18, 2025, to all holders of record as of February 10, 2025. During the first quarter of 2025, the Company declared a total of $1,608,012 in dividends, of which $1,607,893 was paid. The balance of $119 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc. shares and are pending escheatment.

On January 30, 2024, the Company's Board of Directors declared a cash dividend of $0.25 per share, which was paid on February 20, 2024, to all holders of record as of February 12, 2024. During the first quarter of 2024, the Company declared a total of $1,148,580 in dividends, of which $1,148,468 was paid. The balance of $112 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc. shares and are pending escheatment.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

You should read the following discussion and analysis in conjunction with our financial statements and related notes contained elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors discussed in this report and those discussed in other documents we file with the SEC. In light of these risks, uncertainties and assumptions, readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements represent beliefs and assumptions as of the date of this report. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Past performance does not guarantee future results.

EXECUTIVE LEVEL OVERVIEW

We specialize in manufacturing cosmetic ingredients, pharmaceuticals, medical lubricants, and sexual wellness ingredients through our Guardian Laboratories division. With a long-standing reputation for delivering high-quality specialty products, we are committed to serving diverse markets with innovative solutions.

As part of our strategic focus, in October 2023, we took a significant step toward expanding our presence in the sexual wellness market by partnering with Brenntag Specialties, a global leader in chemicals and ingredients distribution. Under this agreement, Brenntag will market and distribute our new Natrajel line of sexual wellness ingredients across North and South America. While we reported no sales of this product in 2024, we anticipate beginning manufacturing and revenue generation in 2025.

We have also expanded our relationship with Azelis Group NV ("Azelis"), our distributor in the United Kingdom ("UK") and Ireland. We added a new territory, South Korea, for personal care in February of 2025 and expanded the UK and Ireland territories to include the medical market. We have been strategically making changes to expand our presence for our medical lubricants, and this is the first step in that process.

With a refined product portfolio and strategic partnerships, we are well-positioned for future growth, leveraging our expertise in specialty ingredients to capitalize on emerging market opportunities.

CRITICAL ACCOUNTING POLICIES

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the discussion and analysis of our financial condition and results of operations are based on its financial statements, which have been prepared in conformity with US GAAP. The preparation of those financial statements required us to make estimates and assumptions that affect the carrying value of assets, liabilities, revenues, and expenses reported in those financial statements. Those estimates and assumptions can be subjective and complex, and consequently, actual results could differ from those estimates and assumptions. Our most critical accounting policies relate to revenue recognition, concentration of credit risk, investments, inventory, and income taxes. Since December 31, 2024, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.

The following discussion and analysis covers material changes in our financial condition since the year ended December 31, 2024, and a comparison of the results of operations for the three months ended March 31, 2025 and March 31, 2024. 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, 2024.

All references in this quarterly report to "sales" or "Sales" shall mean Net Sales unless specified otherwise.

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.

RESULTS OF OPERATIONS

Net Sales

Net sales for the first quarter of 2025 decreased by $773,817 (approximately 24%) as compared with the first quarter of 2024. The decrease in sales for the first quarter of 2025 was primarily attributable to a decrease in sales of our Lubrajel^® line of cosmetic ingredients, which was partially offset by an increase in sales of our pharmaceutical and medical products. The changes in our sales by product line are as follows:

(a)

Cosmetic Ingredients: Sales of our cosmetic ingredients decreased by $1,177,484 (approximately 63%) in the first quarter of 2025 compared with the same period in 2024. The decrease was primarily attributable to a decrease in purchases of cosmetic ingredients by ASI, whose purchases decreased by $1,301,343 (approximately 74%) compared with the same period in 2024. This decrease was offset by an increase in sales to our four other distributors of $120,728 (approximately 101%), and an increase in sales to two direct cosmetic ingredient customers located in the United States of $3,132 (approximately 129%).

Based on information received from ASI, the decrease in sales to ASI was due to (a) an excess of inventory being held in China that had to be worked off, and (b) the timing of product orders. ASI has confirmed that currently there has been no significant loss of business or customers.

The Company continues to experience global competition, particularly from Asian companies that manufacture and sell products that are competitive with the Company's 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. The Company expects the Asian market to remain very competitive based on the continuing competition from lower-cost competitors, and for that reason we are concentrating our R&D efforts on developing new and unique products that other companies do not offer.

Refer to Item 1A. "Risk Factors" for more information regarding the impact of potential tariffs on sales of our cosmetic ingredients.

(b)

Pharmaceutical Products: Because there are fees, rebates, and allowances associated with sales of the Company's two pharmaceutical products, Renacidin and Clorpactin® WCS-90, discussion of pharmaceutical sales includes references to both gross sales (before fees, rebates and allowances) and net sales (after fees, rebates, and allowances). Net sales of our two pharmaceutical products, Renacidin and Clorpactin WCS-90, together increased from $950,323 in the first quarter of 2024 to $1,168,458 in the first quarter of 2025, (approximately 23%). Gross sales of both products increased from $1,086,669 in the first quarter of 2024 to $1,367,979 in the first quarter of 2025 (approximately 26%).

The increase in sales was primarily due to a continued increase in gross sales of Renacidin, which increased from $891,789 in the first quarter of 2024 to $1,232,396 (approximately 38%) in the first quarter of 2025. This increase was primarily due to the fact that in the first quarter of 2024 the Company was not able to fill full orders of Renacidin due to the temporary shutdown of production at our contract manufacturer's facility, which began in the fourth quarter of 2023. As a result of this shutdown, we were forced to allocate our existing stock of Renacidin in order to maintain sufficient supply levels to fill customer orders. Sales of Renacidin remained on allocation until late March of 2024, when we received product in sufficient quantities to fill customers' orders in full. The increase in gross sales of Renacidin was offset by a decrease in sales of Clorpactin, which decreased from $194,880 to $135,583 a decrease of approximately 30%.

The difference in the net sales increase compared with the gross sales increase for these products was due to a combination of 1) a net increase in gross sales of those products, combined with 2) an increase in pharmaceutical sales allowances of $63,176 (approximately 46%), compared with the same period in 2024. The increase in sales allowances was primarily due to an increase in sales discounts and VA chargebacks.

(c)

Medical Lubricants: Sales of the Company's medical lubricants increased by $185,532 (approximately 43%) for the first quarter of 2025 when compared with the same period in 2024. The increase was due to an increase in orders from two of our medical customers, one located in India and the other in China.

Refer to Item 1A. "Risk Factors" for more information regarding the impact of potential tariffs on sales our medical lubricants.

Cost of Sales

Cost of sales as a percentage of net sales for the first quarter of 2025 decreased to 45%, compared with 48% for the first quarter of 2024. The decrease was due primarily to the fact that in the first quarter of 2024 the cost of sales associated with the products sold carried a higher per-unit overhead rate than the products sold in the first quarter of 2025.

Operating Expenses

Operating expenses, consisting of selling, general, and administrative expenses, increased by $63,870 (approximately 11%) for the first quarter of 2025 compared with the first quarter of 2024. The increase was mainly due to increases in sales & marketing expenses and payroll and payroll related expenses.

Research and Development Expenses

R&D expenses increased by $11,412 (approximately 11%) for the first quarter of 2025 compared with the first quarter of 2024. The increase was primarily due to an increase in payroll and payroll-related expenses.

Investment Income

Investment income decreased by $13,386 (approximately 14%) for the first quarter of 2025 compared with the first quarter of 2024. The decrease was primarily due to a decrease in interest income from United States Treasury Bills during the first quarter of 2025 compared with the same period in 2024. This was the result of a combination of lower interest rates in the first quarter of 2025 compared with the same period in 2024, and a decrease in the holdings of U.S. Treasury Bills in the first quarter of 2025 due to increased cash requirements.

Net Gain on Marketable Securities

The net gain on marketable securities decreased from $41,496 for the quarter ended March 31, 2024, to $12,350 for the quarter ended March 31, 2025. The decrease was primarily due to a change in the market value of our equity mutual funds of $13,857. Our management team 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.

Provision for Income Taxes

The Company's effective income tax rate was approximately 21% for the first quarter of 2025 and 2024 and is expected to remain at 21% for the current fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

Working capital decreased by $987,304 to $9,763,778 at March 31, 2025, down from $10,751,082 at December 31, 2024. The current ratio decreased to 6.1 to 1 at March 31, 2025, down from 6.6 to 1 at December 31, 2024. The decreases in working capital and the current ratio were primarily due to a decrease in cash, cash equivalents and marketable securities.

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.

The Company is in the final stages of upgrading its building sprinkler system and has incurred costs of $184,298 to date and expects to incur additional costs of $10,814 during the second quarter of 2025. The project is expected to be completed during the second quarter of 2025.

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.

The Company generated cash from operations of $322,080 and $644,120 for the three months ended March 31, 2025 and 2024, respectively. The decrease was due primarily to a decrease in net income.

Cash provided by investing activities for the three months ended March 31, 2025 was $679,370. Cash used in investing activities for the three months ended March 31, 2024 was $665,478. The increase was primarily due to an increase in net proceeds from the sale of marketable securities in the first quarter of 2025 compared with the first quarter of 2024. The dividend payment we made in the first quarter of 2025 required the liquidation of some of our CD's and U.S. Treasury Bills.

Net cash used in financing activities was $1,607 893 and $1,148,468 for the quarters ended March 31, 2025 and 2024, respectively. The increase in cash used in financing activities was due to the payment of higher dividends in the first quarter of 2025 compared to the same period in 2024. We declared dividends of $0.35 per share in the first quarter of 2025, compared to $0.25 per share in the first quarter of 2024.

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.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The information to be reported under this item is not required of smaller reporting companies.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information to be reported under this item is not required of smaller reporting companies.

Item 4. CONTROLS AND PROCEDURES

(a)

DISCLOSURE CONTROLS AND PROCEDURES

The Company's management, including its Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of the Company's disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon the evaluation performed by the Company's management, including its Principal Executive Officer and Principal Financial Officer, it was determined that, as of the end of the period covered by this quarterly report, the Company's disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to the Company's management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding disclosures.

(b)

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company's Principal Executive Officer and Principal Financial Officer have determined that, during the period covered by this quarterly report, there were no changes in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. They have also concluded that there were no significant changes in the Company's internal controls after the date of the evaluation.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

Impact of Global Supply Chain Instability, Inflation and Tariffs: We are actively monitoring trade policy and tariff announcements including the recent executive orders issued by executive branch of the U.S. federal government regarding tariffs on imports from various countries, with a focus on China as those tariffs have the greatest potential to significantly impact our business. In addition, we are monitoring the potential impact of actions taken by these countries in response to the announced tariffs. A significant amount of our cosmetic ingredient and medical lubricant sales are reliant on shipments to China. If significant tariffs or other restrictions are placed on Chinese imports or any countermeasures are taken by China, our business, financial condition or results of operations could be materially and adversely affected. Such tariffs may make our products less cost competitive and reduce gross margins, especially in China, where we face significant competition from Asian companies that manufacture and sell products that are competitive with our products. Furthermore, we may not be able to increase our prices for our products sufficiently enough to offset these tariffs and if we raise prices in response to these tariffs, demand for our products in certain regions may be reduced.

Many of our products are used in the formulation of finished products that are manufactured in China and then imported back into the U.S. for sale. There is the possibility that the tariffs levied on these finished products could result in an increase in their price, which could potentially impact demand for these products in the U.S. and possibly have a negative effect on the purchases of our products.

We source products through numerous suppliers, many of whom have established long-term relationships with us. While we obtain most of our raw materials and lab supplies from domestic sources, we have three suppliers that obtain their raw materials from China. These materials are not purchased by us in large quantities, and we have adequate stock on hand to cover the next six months. In addition, we have one direct raw material supplier in China; however, the raw materials we purchase from this supplier are not in large quantities and the effect of this tariff would not materially impact the pricing of our products.

At this time, the overall impact on our business related to these or any other tariffs that may be imposed, remains uncertain and depends on multiple factors, including the duration and expansion of current tariffs, future changes to tariff rates, scope or enforcement, retaliatory measures by impacted trade partners, inflationary effects, and the effectiveness of our responses in managing these challenges.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

31.1	Certification of Donna Vigilante, President and Principal Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Andrea Young, Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications of Principal Executive Officer and Chief Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (Embedded within the inline XBRL document and included in Exhibit 101.1)

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNITED-GUARDIAN, INC.

(Registrant)

By: /S/ DONNA VIGILANTE	By: /S/ ANDREA YOUNG
Donna Vigilante	Andrea Young
President	Chief Financial Officer

Date: May 7, 2025