10-Q: NU-MED PLUS Faces Going Concern Amid Funding Shortfall

NU-MED PLUS, an early-stage medical device company, reported a net loss and significant working capital deficiency, raising substantial doubt about its ability to continue operations without immediate capital infusion.

Summary

• NU-MED PLUS, INC. reported no revenue for the three and six months ended June 30, 2025, consistent with the prior year.
• The company incurred a net loss of $11,665 for the three months ended June 30, 2025, an improvement from a $17,287 net loss in the same period of 2024.
• For the six months ended June 30, 2025, the net loss was $31,598, an improvement from $39,112 in the prior year period.
• Operating expenses decreased to $10,419 for the three months ended June 30, 2025, from $16,040 in 2024, primarily due to a $5,203 decrease in dues and subscriptions.
• Total assets stood at $8,163 as of June 30, 2025, down from $9,373 at December 31, 2024.
• Total liabilities increased to $254,857 as of June 30, 2025, from $224,469 at December 31, 2024.
• The company's cash balance was $863 as of June 30, 2025, a decrease from $2,373 at December 31, 2024.
• A working capital deficiency of $246,694 was reported as of June 30, 2025, worsening from $215,096 at December 31, 2024.
• Management stated that funds on hand are insufficient to execute the business plan for the next 12 months, requiring approximately $1,200,000 in additional financing ($300,000 for overhead, $900,000 for product development).
• The company is currently funded only through September 30, 2025.
• Product development has been suspended pending a capital infusion.
• Subsequent to June 30, 2025, officers provided $14,000 ($12,500 from Mr. Hayde, $1,500 from Mr. Merrell) for operating expenses.

Sentiment

Score: 2

Explanation: The company is in a precarious financial position with a severe liquidity crisis, no revenue, and substantial doubt about its ability to continue as a going concern. Product development is halted, and significant capital is urgently needed with no clear path to secure it. While operating expenses decreased, this is overshadowed by the critical funding and operational challenges.

Positives

• Net loss decreased for both the three-month ($11,665 vs. $17,287) and six-month ($31,598 vs. $39,112) periods ended June 30, 2025, compared to the prior year.
• Operating expenses decreased for both the three-month and six-month periods, indicating some cost control measures.

Negatives

• The company reported no revenue for the current and prior periods, indicating it is still in the pre-commercialization stage.
• Cash balance significantly declined to $863 as of June 30, 2025, from $2,373 at December 31, 2024.
• Total liabilities increased to $254,857, while total assets decreased to $8,163, worsening the financial position.
• The working capital deficiency increased to $246,694, highlighting severe liquidity issues.
• The company has substantial doubt about its ability to continue as a going concern.
• Product development has been suspended due to lack of funding.
• The company requires $1,200,000 in additional financing for the next twelve months, with no assurance of obtaining it.
• Current funding is only sufficient through September 30, 2025.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to insufficient funds.
• Inability to obtain additional financing through equity sales or shareholder loans could lead to the company being unable to remain in business or execute its business plan.
• Reliance on a small group of investors for funding poses a risk if they become unable or unwilling to provide additional capital.
• Product development is suspended and requires significant capital infusion to resume.
• FDA approval for human medical uses of products is a long, expensive process with no assurance of success, and the company currently lacks funds to pursue it.
• The company's disclosure controls and procedures were not effective as of June 30, 2025, indicating potential weaknesses in financial reporting and information communication.
• Uncertainties relating to general economic and business conditions, industry trends, and changes in demand for products and services.
• Unanticipated delays in development, market acceptance, or installation of products and services.
• Changes in government regulations, availability of management and key personnel, and terms/deployment of capital.
• Cybersecurity threats pose risks to information systems and data, despite mitigation efforts, and cannot be entirely eliminated.

Future Outlook

The company does not anticipate any revenue for the foreseeable future as its products are still in the development stage. It requires significant additional financing, estimated at $1,200,000 for the next twelve months, to cover corporate overhead and resume product development. The company plans to rely on private stock sales and potential loans from investors and shareholders, as traditional bank financing is not an option. FDA approval for human medical uses is a long and expensive process, and the company currently lacks the funds to pursue it, though it is working to secure funding for hospital unit FDA submission.

Management Comments

• "We do not anticipate any revenue for the foreseeable future as our products are still in the development stage."
• "We are currently working to secure funding that will enable us to submit the hospital unit for FDA approval."
• "If plans to obtain further financing prove to be insufficient to fund operations, continued viability could be at risk."

Industry Context

The company operates in the medical device field, specifically focusing on nitric oxide technologies. Nitric oxide is a bio-mediator with anti-inflammatory, antibacterial, antiviral, and antifungal properties, currently FDA-approved for treating hypoxia in premature infants. Discoveries since 1999 suggest new potential uses in various diseases (COPD, flu, bacterial infections, non-healing wounds), which still require FDA approval. The current market for inhaled nitric oxide (INO) is dominated by a single-source product, Inomax, leading to high prices. NU-MED aims to capitalize on this by developing a new, lower-cost method to generate and deliver nitric oxide, potentially disrupting the market.

Comparison to Industry Standards

• The company identifies Inomax as the only FDA-approved medical grade nitric oxide delivery device, noting its single-source market status and 'market can bear' pricing.
• NU-MED believes there is ample room for a competitive response by offering on-site generated nitric oxide at a lower cost, anticipating low material and labor costs for its product while still providing attractive margins.
• Unlike Inomax, NU-MED's products are not yet fully developed or FDA-approved for human use, placing them significantly behind established market players in terms of commercialization and regulatory clearance.

Corporate Governance

Related Party Transactions

• Accounts payable to related parties increased to $86,160 as of June 30, 2025, from $66,710 at December 31, 2024.
• A note payable of $100,000 is owed to YourSpace America, Inc. (YSA), where William Hayde (Company's President/CEO) also serves as Chairman of the Board.
• The company is currently utilizing office space and a laboratory provided by its officers at no charge.
• Employment agreements for Mr. Hayde (President/CEO) and Mr. Merrell (CFO) provide for no compensation until a major funding event.
• Subsequent to June 30, 2025, officers (Mr. Hayde and Mr. Merrell) provided $14,000 in funds to pay for operating expenses.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future equity raises and the risk of substantial loss of investment due to the company's going concern issues and lack of revenue.
• Creditors, particularly related parties, face increased risk due to the company's deteriorating financial position and reliance on their continued support.
• Employees (management) are currently working without compensation, indicating a high level of personal commitment but also financial strain.
• Potential customers will experience delays in product availability as development is suspended and FDA approval is unfunded.

Next Steps

• Obtain approximately $1,200,000 in additional financing for the next twelve months to cover corporate overhead and resume product development.
• Secure funding to enable submission of the hospital unit for FDA approval.
• Continue to rely on private stock sales and potential loans from investors and shareholders for funding.

Key Dates

Recommendation

The company is in a critical financial state, explicitly stating 'substantial doubt' about its ability to continue as a going concern. It has no revenue, a worsening working capital deficiency, and a rapidly dwindling cash balance. Product development is suspended, and a significant capital raise is urgently needed with no clear path to secure it from traditional sources. The ineffective disclosure controls further compound the risk. Given these severe challenges and the high likelihood of further dilution or potential insolvency, the stock represents a high-risk investment with significant downside.

Keywords

Medical Device, Nitric Oxide, SEC Filing, 10-Q, Financial Report, Going Concern, Liquidity, Capital Raise, FDA Approval, Product Development, Biotechnology, Healthcare Technology