UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2019



[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from __________ to __________


Commission File Number 000-54808


NU-MED PLUS, INC.

(Exact name of registrant as specified in its charter)


Utah

45-3672530

(State or other jurisdiction of

(IRS Employer Identification No.)

incorporation or organization)


455 East 500 South, Suite 203, Salt Lake City, Utah    84111

 (Address of principal executive offices)

 (Zip Code)


(801) 746-3570

 (Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:  None.


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]   No [  ]


Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X]   No [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer x

Smaller reporting company x

Emerging growth company x


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]   No [X]





Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years:


Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.


Not applicable.


Applicable Only to Corporate Issuers:


Class

Outstanding as of November 14, 2019


Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

41,514,375 shares of $0.001 par value common stock on November 14, 2019




TABLE OF CONTENTS


PART I

FINANCIAL INFORMATION

2

 

 

 

ITEM 1

FINANCIAL STATEMENTS

3

 

 

 

ITEM 2

MANAGEMENT’S DISCUSSION AND ANAYLSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

15

 

 

 

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

18

 

 

 

ITEM 4

CONTROLS AND PROCEDURES

18


 

 

 

PART II

OTHER INFORMATION

19

 

 

 

ITEM 1

LEGAL PROCEEDINGS

19

 

 

 

ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

19

 

 

 

ITEM 3

DEFAULTS UPON SENIOR SECURITIES

19

 

 

 

ITEM 4

MINE SAFETY DISCLOSURE

19

 

 

 

ITEM 5

OTHER INFORMATION

19

 

 

 

ITEM 6

EXHIBITS

19

 

 

 

 

 

SIGNATURES

20




1




Part I - FINANCIAL INFORMATION


Item 1. Financial Statements

NU-MED PLUS, INC.



FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2019


The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the 10-K for the period ended December 31, 2018, accompanying notes, and with the historical financial information of the Company.





2




Nu-Med Plus, Inc.

Financial Statements

(Unaudited)


Table of Contents




 

 

Page No.

 

 

 

Condensed Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018

 

4

 

 

 

Condensed Statements of Operations (unaudited) for the three and nine months ended September 30, 2019 and 2018

 


5

 

 

 

Statement of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2019 (unaudited)

 


6

 

 

 

Statement of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2018 (unaudited)

 


7

 

 

 

Condensed Statements of Cash Flows (unaudited) for the nine months ended September 30, 2019 and 2018

 


8

 

 

 

Notes to the Condensed Financial Statements

 

9

 

 

 





3




NU-MED PLUS, INC.

Condensed Balance Sheets


 

 

 

 

September 30,

December 31,

 

 

 

 

2019

(unaudited)

2018

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash

 

 $             41,838

 $         167,513

 

Prepaid expense

 

3,950

218,712

 

 

Total current assets

 

45,788

386,225

 

 

 

 

 

Property and equipment, net

 

26,461

36,791

 

Operating lease right-of-use of assets

 

11,418

-

 

 

Total assets

 

 $           83,667

 $         423,016

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$            18,932

$             9,782

 

Accounts payable – related party

 

11,034

6,000

 

Accrued expenses

 

112,651

117,648

 

Financing lease

 

2,944

10,959

 

Operating lease liability

 

11,418

-

 

Convertible promissory notes – related party

 

230,100

230,100

 

 

Total current liabilities

 

387,079

374,489

Long-term liabilities

 

-

-

        Total liabilities

 

387,079

374,489

Commitments and contingencies

 

-

-

Stockholders' equity (deficit)

 

 

 

 

Preferred stock; $0.001 par value; 10,000,000 authorized; no shares issued and outstanding, respectively.

 

-

-

 

Common stock; $0.001 par value; 90,000,000 authorized; 41,514,375 and 41,274,375 shares issued and outstanding, as of September 30, 2019 and December 31, 2018, respectively.

 

        41,514

        41,274

 

Additional paid-in capital

 

5,061,247

4,851,487

 

Stock subscription payable

 

1,114,191

849,175

 

Accumulated deficit

 

(6,520,364)

(5,693,409)

 

 

Total stockholders' equity (deficit)

 

(303,412)

48,527

 

 

Total liabilities and stockholders' equity (deficit)

 

 $          83,667

 $         423,016


The accompanying notes are an integral part of these condensed financial statements.





4




NU-MED PLUS, INC.

Condensed Statements of Operations

(Unaudited)


 

 

 

 

Three months ended September 30, 2019

Three months ended September 30, 2018

Nine months ended September 30, 2019

Nine months ended September

30, 2018

 

 

 

 

 

 

 

 

Revenue

 

 $                -

 $              -

$                 -

$                  -

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

General and administrative expense

 

10,162

40,064

60,014

87,191

 

Payroll expense

 

70,476

59,266

196,456

184,716

 

Rent expense

 

4,570

4,540

13,767

13,504

 

Professional and consulting fees

 

57,871

414,618

533,159

536,965

 

Depreciation expense

 

3,134

3,581

10,330

10,969

 

 

Total operating expenses

 

146,213

522,069

813,726

833,345

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

(146,213)

(522,069)

(813,726)

(833,345)

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

Interest expense

 

(4,363)

(4,779)

(13,229)

(14,544)

 

 

Total other income (expense)

 

(4,363)

(4,779)

(13,229)

(14,544)

 

 

 

 

 

 

 

 

Income tax expense

 

            -

            -

-

-

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$ (150,576)

$ (526,848)

$ (826,955)

$ (847,889)

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

$        (0.00)

$       (0.01)

$       ( 0.02)

$       ( 0.02)

 

Weighted average common shares Outstanding – basic and diluted

 

45,962,847

39,043,668

45,410,048

38,187,449




The accompanying notes are an integral part of these condensed financial statements.



5






NU-MED PLUS, INC.

Statements of Stockholders’ Equity (Deficit)

For the Three and Nine Months Ended September 30, 2019

(Unaudited)


 

Preferred Stock

Common Stock

Additional Paid-In

Stock Subscription

Accumulated

 

 

Shares 

 Amount

  Shares

Amount

Capital

Payable

 Deficit

  Total

Balance, January 1, 2019

-

$          -

41,274,375

$   41,274

$ 4,851,487

$   849,175

$  (5,693,409)

 $  48,527

Common Stock issued for subscription payable

-

-

40,000

40

9,960

(10,000)

-

-

Stock issued for cash

-

-

200,000

200

49,800

-

-

50,000

Cash received for  subscription payable

-

-

-

-

-

55,000

-

55,000

Stock vested for compensation

-

-

-

-

50,000

-

-

50,000

Net loss for the three months  ended March 31, 2019

-

-

-

 -

-

-

(428,195)

(428,195)

Balance, March 31, 2019

-

$          -

41,514,375

$41,514

$4,961,247

$894,175

$ (6,121,604)

$  (224,668)

Cash received for  subscription payable

-

-

-

-

-

115,598

-

115,598

Stock vested for compensation

-

-

-

-

50,000

-

-

50,000

Net loss for the three months ended June 30, 2019

-

-

-

-

-

-

(248,184)

(248,184)

Balance, June 30, 2019

-

-

41,514,375

$41,514

$5,011,247

$1,009,773

$(6,369,788)

$(307,254)

Cash received for subscription payable

-

-

-

-

-

104,418

-

104,418

Stock vested for compensation

-

-

-

-

50,000

-

-

50,000

Net loss for the three months  ended September 30, 2019

-

-

-

-

-

-

(150,576)

(150,576)

Balance, September 30, 2019

-

$          -

41,514,375

$41,514

$5,061,247

$1,114,191

$ (6,520,364)

$  (303,412)










The accompanying notes are an integral part of these condensed financial statements.




6






NU-MED PLUS, INC.

Statements of Stockholders’ Equity (Deficit)

For the Three and Nine Months Ended September 30, 2018

(Unaudited)



 

Preferred Stock

Common Stock

Additional Paid-In

Stock Subscription

Accumulated

 

 

Shares 

 Amount

  Shares

Amount

Capital

Payable

 Deficit

  Total

Balance, January 1, 2018

-

$          -

37,563,125

$   37,563

$ 3,728,837

$   806,405

$  (4,504,563)

 $  68,242

Cash received for  subscription payable

-

-

-

-

-

8,220

-

8,220

Stock subscription payable - services

-

-

-

-

-

50,000

-

50,000

Net loss for the three months  ended March 31, 2018

-

-

-

-

-

-

(147,486)

(147,486)

Balance, March 31, 2018

-

$          -

37,563,125

$37,563

$3,728,837

$864,625

$ (4,652,049)

$  (21,024)

Cash received for  subscription payable

-

-

-

-

-

9,750

-

9,750

Common stock issued for cash

-

-

440,000

440

109,560

-

-

110,000

Stock subscription payable - services

-

-

-

-

-

50,000

-

50,000

Net loss for the three months  ended June 30, 2018

-

-

-

-

-

-

(173,555)

(173,555)

Balance, June 30, 2018

-

-

38,003,125

$ 38,003

$3,838,397

$ 924,375

$(4,825,604)

$ (24,829)

Common stock issued for  subscription payable

-

-

281,250

281

92,080

(60,300)

-

32,061

Cash received for subscription payable

-

-

-

-

-

25,100

-

25,100

Common stock issued for  subscription payable - services

-

-

-

-

-

(100,000)

-

(100,000)

Common stock issued for compensation

-

-

2,000,000

2,000

148,000

-

-

150,000

Common stock issued for service

-

-

650,000

650

638,350

-

-

639,000

Net loss for the three months  ended September 30, 2018

-

-

-

-

-

-

(526,848)

(526,848)

Balance, September 30, 2018

-

$          -

40,934,375

$40,934

$4,716,827

$789,175

$ (5,352,452)

$  194,484


The accompanying notes are an integral part of these condensed financial statements.



7







NU-MED PLUS, INC.

Condensed Statements of Cash Flows

(Unaudited)


 

 

 

Nine months ended

September 30, 2019

Nine months ended

September 30,

2018

Cash flows from operating activities:

 

 

 

Net income (loss)

$ (826,955)

$ (847,889)

 

Adjustment to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

10,330

10,969

 

 

Amortization of right of use asset

8,064

-

 

 

Stock issued for services performed

-

309,000

 

 

Stock-based compensation

356,250

182,061

 

 

Changes in operating assets and liabilities:

 

 

 

 

      Prepaid expenses

8,512

(4,457)

 

 

      Operating lease liability

(8,064)

-

 

 

      Accounts payable

9,150

11,430

         Accounts payable - related party

5,034   

2,547   

 

 

      Accrued expense

(4,997)

12,101

 

 

Net cash used in operating activities

(442,676)

(324,238)

 

 

 

 

 

Cash flows from investing activities:

 

 

            Purchase of equipment

-

(5,026)

 

 

Net cash used in investing activities

-

(5,026)

 

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from stock subscriptions payable

275,016

43,070

 

Proceeds from issuance of common stock

50,000

110,000

 

Payments on financing lease

(8,015)

(6,587)

 

 

Net cash provided by financing activities

317,001

146,483

 

 

Net increase (decrease) in cash

(125,675)

(182,781)

Cash at beginning of period

167,513

351,043

Cash at end of period

$     41,838

$   168,262

Supplemental schedule of cash flow information

 

 

 

Cash paid for interest

$       1,175

$       2,488

 

Cash paid for income tax

$            -

$          100

   Non-cash  investing and  financing activities

 

Common stock issued for subscription payable

$     10,000

$     60,300

 

Right-of-use operating lease assets obtained in exchange for operating lease liabilities

$     19,482

$               -

          

Common stock issued for prepaid services

$               -

$   495,000

 

 

 

 


The accompanying notes are an integral part of these condensed financial statements.



8







Nu-Med Plus, Inc.

Notes to the Condensed Financial Statements

September 30, 2019


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS


Nu-Med Plus, Inc. (or “the Company”) is an emerging growth early stage medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. The Company's immediate focus is on the development of Nitric Oxide delivery devices, including a hospital unit, a clinical unit to be used in doctors’ offices and extended care facilities, a portable unit and a single use disposable unit.  We are also developing a powder formulation to generate Nitric Oxide that is 99% pure, with a one-year shelf life, a "desktop" generator device with controls plus safety monitors built in that delivers inhaled Nitric Oxide to replace expensive pressurized canisters and a compact mobile rechargeable device to deliver inhaled Nitric Oxide gas. The Company is incorporated in Utah.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


a. Basis of Interim Financial Statement Presentation


The accompanying unaudited financial statements have been prepared by the Company pursuant to accounting principles generally accepted in the United States of America.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission.  The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, 2018 financial statements.  Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.


b. Reclassification of operating expenses


The Company has made a reclassification of the 2018 operating expenses that affects general and administrative expense payroll expense.  In the previously published 2018 financial statement presentations stock-based compensation was included in general and administrative expenses.  In these accompanying unaudited financial statements those stock-based compensation expenses have been reclassified to payroll expense for comparative purposes, as in the 2019 financial presentation stock-based compensation expenses are included in payroll expenses.


c. Revenue Recognition


The Financial Accounting Standards Board (“FASB”) issued new guidance for the recognizing and reporting of revenue in contracts with customers.  The effective date for implementation for public companies is January 1, 2018.


The new guidance established a five-step analysis to be followed when determining the recognition of revenue.


1.

 Identify the contract with a customer.

2.

Identify the performance obligations in the contract.

3.

Determine the transaction price.

4.

Allocate the transaction price to the performance obligations in the contract.

5.

Recognize revenue when, or as, the reporting organization satisfied a performance obligation.



9







While the Company is an early-stage company with no revenue, at the time we begin to generate revenue the Company will recognize such revenue in conformity with the guidelines set forth by ASC 606.


d. Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


e. Fair Value


Fair value is defined as the price 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.  FASB Accounting Standards Codification (“ASC”) Topic 820 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements), as follows:


Level 1 - Quoted market prices in active markets for identical assets or liabilities;

 

Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and


Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.


All accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments.  


f. Cash and Cash Equivalents


The Company considers all deposit accounts and investment accounts with an original maturity of 90 days or less to be cash equivalents.  The cash balance of $41,838 we currently have on deposit is within the limits for which the FDIC insures.


g. Property and Equipment


Property and equipment is stated at cost.  Expenditure for minor repairs, maintenance, and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. Expenditures, exceeding $500, for new assets or that increase the useful life of existing assets are capitalized.  Depreciation is computed using the straight-line method.  The lives over which the fixed assets are depreciated are five to seven years.


h. Leases


In February 2016, the FASB updated the accounting guidance related to leases, requiring lessees to recognize lease assets and liabilities on the balance sheet for all operating leases, with the exception of short-term leases.  We adopted the updated guidance on January 1, 2019 on a prospective basis and as a result, prior periods presented in these financial statements have not been adjusted to reflect the impact of this new guidance.  The resultant assets and liabilities recognized in the current period will be amortized over the remaining life of the respective leases.




10






i. Earnings per Share


The computation of earnings per share of common stock is based on the weighted average number of shares outstanding during the period of the financial statement.  For purposes of computing basic and diluted earnings per share, shares for which cash has been received, but for which shares have not yet been issued are included as if the shares had been issued when an agreement was entered into and cash was received.


Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. As of September 30, 2019 and 2018, there were convertible notes payable which could be converted into 34,026,500 shares and 31,560,500 shares of restricted common stock, respectively, but were not included as their effect is anti-dilutive.


j. Income Taxes


Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


k. Stock-based Compensation


The Company, in accordance with ASC 718, Compensation – Stock Compensation, records all share-based payments to employees at the grant-date fair value of the equity instruments issued. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company uses the closing price of the stock, as quoted by NASDAQ, on the date of the grant.  The Company believes this pricing method provides the best estimate of the fair value of the consideration given.  Compensation cost is recognized over the requisite service period.


The Company, in accordance with this updated standard, establishes the value of equity instruments issued to non-employees for goods and services by using the closing price of the stock, as quoted by NASDAQ on the date of the grant.  The Company believes this method fairly establishes the value of the goods and/or services received.


l. Recent Accounting Pronouncements


In July 2018, the Financial Accounting Standards Board issued ASU No. 2018-11 “Leases”, a clarification of the guidance issued in February 2016, ASU No. 2016-02, “Leases” Topic 842.  The Company adopted this standard effective January 1, 2019. The adoption of this standard resulted in recording right-of-use assets and lease liabilities on its balance sheet.  The adoption was made on a prospective basis and, as a result, prior period amounts were not adjusted to reflect the impact of the updated guidance.  The adoption of this new accounting guidance did not have a significant impact on our financial statements.


In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718),” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity of financial reporting for non-employee share-based payments. Currently, the accounting requirements for non-employee and employee share-based payments are significantly different. ASU 2018-07 expands the scope of Topic 718 to include share-based payments to non-employees for goods or services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s



11






adoption date of Topic 606.  The adoption of this new accounting guidance did not have a significant impact on our financial statements.


The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position and cash flows.  Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations.


NOTE 3 - GOING CONCERN


The Company acknowledges that the funds on hand as of September 30, 2019, will not be sufficient to enable it to execute its business plan and funding through the sale of equity capital and short term related party and other shareholder loans in order to meet the planned expenditures for development, operations, and administrative cost over the next 12 months will be required. Planned expenditures are approximately $1,200,000 for the next twelve months. The Company is currently funded through November 30, 2019. If plans to obtain further financing prove to be insufficient to fund operations, continued viability could be at risk. These factors raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements.


NOTE 4 – PROPERTY AND EQUIPMENT


Property and equipment and related accumulated depreciation consisted of the following at September 30, 2019, and December 31, 2018:


 

September 30, 2019

 

December 31, 2018

 

 

 

 

 

 

Computer and office equipment

$                   90,368

 

$                      90,368

 

Accumulated depreciation

(63,907)

 

(53,577)

 

 

 

 

 

 

     Total Fixed Assets

$                    26,461

 

$                      36,791

 


Depreciation expense for the nine months ended September 30, 2019 and 2018 was $10,330 and $10,969, respectively.


NOTE 5 - PREFERRED STOCK


On October 19, 2011, the Company filed Articles of Incorporation with the State of Utah so as to authorize 10,000,000 shares of preferred stock having a par value of $0.001 per share. No preferred shares are issued or outstanding at September 30, 2019.


NOTE 6 - COMMON STOCK


Stock issued for stock subscriptions payable


As of September 30, 2019 and December 31, 2018, the Company had subscriptions payable of $1,114,191 and $849,175, for which the Company had an obligation to issue 4,453,014 and 3,521,300 shares of restricted common stock, respectively.


During the nine months ended September 30, 2019, the Company issued 40,000 shares of restricted common stock for $10,000 received during the year ended December 31, 2018.




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In September 2017, the Company entered into a stock purchase agreement with a related party, significant shareholder and debt holder, under which the buyer may purchase up to $400,000 in shares of common stock at $0.25 per share.  The agreement expires on December 31, 2019.  We received cash proceeds of $246,930 under this agreement during the nine-month period ended September 30, 2019 for 987,720 shares of restricted common stock. In addition, a total of $153,070 was received under this agreement in prior periods.  At the date of this report no stock has been issued against this agreement.  As of September 30, 2019, the shares that have yet to be issued under this agreement have been recorded as a subscription payable in the amount of $400,000.


In July 2019, the Company entered into a stock purchase agreement with a related party, significant shareholder and debt holder, under which the buyer may purchase up to $250,000 in shares of common stock at $0.25 per share.  The agreement expires on December 31, 2020.  We received cash proceeds of $28,086 under this agreement during the nine-month period ended September 30, 2019 for 112,344 shares of restricted common stock.  At the date of this report no stock has been issued against this agreement.


Stock issued for services


In September 2018, the Company issued 650,000 shares of stock to two consultants.  Of these shares, 150,000 were issued under a consulting contract for services rendered and vested upon issue and 500,000 shares of restricted stock were issued to a consultant for services rendered and to be rendered through June 1, 2019.  The common stock was valued at $639,000, of which $206,250 was recorded as consulting expense for the nine months ended September 30, 2019.  At September 30, 2019 all of the expense related to these services was fully amortized.


Stock issued for compensation


On February 14, 2018 the Company announced that the consulting agreement with Mr. Merrell was terminated effective December 31, 2017, and that a new agreement was entered into effective January 1, 2018 under which Mr. Merrell would receive 2,000,000 shares of restricted common stock, vesting at 500,000 shares per year, for services to be performed between January 1, 2018 and December 31, 2021. The shares were valued at $800,000. An expense of $150,000 was recorded for the nine-month period ended September 30, 2019 and an expense of $200,000 was recorded for the year ended December 31, 2018, which represents the fair value of the stock vested during that reporting period. The remaining $450,000 will be expensed over the remaining term of the contract as services are rendered.


NOTE 7 – CONVERTIBLE POMISSORY NOTES – Related Party


$100,000 Convertible Promissory Note

On November 12, 2012, the Company issued a $100,000 convertible promissory note to SCS, a related party and significant shareholder, as compensation for services provided during the period April 1, 2012 through March 31, 2013.  The original note was due on demand, had an annual interest of 5.5%, and was convertible into shares of common stock at a conversion price to be agreed upon immediately prior to conversion.  On September 27, 2013, the Company amended the note to include a conversion price of $0.01 per share for all unpaid principal and interest.  As of September 30, 2019 and December 31, 2018 the Company has unpaid accrued interest of $59,624 and $55,453, respectively, recorded in accrued expenses on the balance sheet.


$130,100 Convertible Promissory Note

Prior to 2015, the Company entered into a convertible promissory note with SCS, a related party and significant shareholder, due on demand, bearing interest at 8% per annum, unsecured and convertible at $0.01 per share.  The balance of this note was $130,100 at September 30, 2019 and December 31, 2018 the unpaid accrued interest on this note was $50,043 and $42,149, respectively, recorded in accrued expenses on the balance sheet.




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NOTE 8 - COMMITMENTS AND CONTINGENCIES


The Company has obligations under both a financing lease and operating lease, as detailed below.


Operating Lease Obligations


The Company entered into a lease for office space in February 2017 for $950 per month.  In November 2017 the Company signed a six-month extension of the lease with a lease payment of $978 per month. In March 2018 the Company extended the lease agreement through August 31, 2019 at a rate of $1,008 per month.  In July 2019 the Company extended the lease agreement through August 31, 2020 at a rate of $1,038 per month.  Obligations under this lease are as follows:


 

 

 

 

 

2019

2020

2021

Office lease

 

 

 

 $   3,114

$   8,304

$               -


Upon the adoption of ASC 842, the calculation of our lease obligation using a discount rate of 8% resulted in an immaterial difference and therefore, no interest will be imputed on the lease obligation.


Financing Lease Obligations


In March 2017, the Company also entered into a 32-month lease for a nitric oxide analyzer, with a monthly payment of $1,014 per month.  


Obligations under the financing lease are as follows:


 

 

 

 

 

2019

2020

2021

Financing lease

 

 

 

 $    2,944

$             -

$               -


The lease is a financing lease, with the option to purchase at the end of the lease term.  The Company plans to exercise the purchase option under the lease, whereby 70% of the lease payments will be applied toward the purchase price of the equipment.  


NOTE 9 - SUBSEQUENT EVENTS


Subsequent to September 30, 2019 the Company has accepted $41,951 for the purchase of 167,804 shares of restricted common stock under the stock purchase agreement entered into on July 1, 2019.


The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no other events that require disclosure as of the date of issuance.



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


Special Note Regarding Forward-Looking Statements


Certain statements in this Report constitute “forward-looking statements.”  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.


Critical Accounting Policies and Estimates


The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. 

 

The Company’s accounting policies are more fully described in Note 2 of the audited financial statements in our recently filed Form 10-K.  As discussed in Note 2, the preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about the future events that affect the amounts reported in the financial statements and the accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  Actual differences could differ from these estimates under different assumptions or conditions.  The Company believes that the following addresses the Company’s most critical accounting policies.


We recognize revenue in accordance with ASC 606, which establishes a five-step analysis to be followed when determining the recognition of revenue.  While the Company is an early-stage company with no revenue, at the time we begin to generate revenue the Company will recognize such revenue in conformity with the guidelines set forth by ASC 606.


Our policy for our allowance for doubtful accounts is maintained to provide for losses arising from customers’ inability to make required payments.  If there is deterioration of our customers’ credit worthiness and/or there is an increase in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required.


We account for income taxes in accordance with the Tax Cuts and Jobs Act and SAB 118


BUSINESS OVERVIEW


NU-MED PLUS, INC., a Utah corporation (“NU-MED” or the “Company”) was incorporated in October 2011 in the state of Utah to develop, manufacture and market new technologies utilizing nitric oxide in the medical device



15






field, primarily through the creation of a nitric oxide generating compound formulation and delivery systems.  To date we have developed a hospital nitric oxide delivery system, a clinical nitric oxide delivery system, a mobile rechargeable device to deliver nitric oxide gas, and a nitric oxide system that can be used for research applications. NU-MED is headquartered in Salt Lake City, Utah.


Business


The mission of NU-MED is to design, develop, and market technologies in the medical device field. Our technologies will focus on market niches in high growth trend areas.  We expect that each developed technology will fill a current need in medical procedures by improving upon an existing technology or device, or by designing a device to serve a need that is clearly defined and acknowledged by medical professionals.


NU-MED is a medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. The mission of NU-MED is to design, develop, and market technologies utilizing nitric oxide in the medical device field. Our technologies will focus on market niches in high growth trend areas.  Our products are developed to target a current need in medical procedures by improving upon an existing technology or device or by designing a device to serve a currently unfilled need that is clearly defined and acknowledged by medical professionals. Our focus has been on the creation of a nitric oxide generating formulation, a hospital bedside nitric oxide delivery system, a clinical unit for use in medical clinics and rehabilitation centers and a mobile rechargeable device to deliver nitric oxide gas to offer solutions to hospitals, health systems and the medical community throughout the world.


NU-MED PLUS has focused on the development of five distinct products for the delivery of nitric oxide. NU-MED products have not been fully developed; therefore we have not made any submission for FDA approval under any medical use.


1.

Nitric oxide proprietary formulation.


2. A hospital delivery device with controls and safety monitors built in that delivers inhaled nitric oxide to a patient at therapeutic levels.  This delivery system is intended for hospitals specifically intensive care units. The goal is to have a system that delivers a metered therapeutic dose (up to 40 ppm) of nitric oxide via a ventilator. The core technology allows dilution of nitric oxide to therapeutic levels to be accomplished without the use of injectors or valves. Safeguards such as concentration monitoring, flow and gas purity would be standard.


3.  A clinical delivery unit that is designed for treatment in an office or physician’s clinic. A unit powered by a wall outlet, administration of the nitric oxide would be via cannula or non-rebreather face mask.


4. A compact, mobile/portable rechargeable device to deliver inhaled nitric oxide gas.  The portable system necessitates a design which can be deployed where a reliable source of power is not available or is difficult to access. The key feature is a rechargeable battery pack that powers the unit for the full duration of a therapeutic session. It can be recharged using existing electrical sources, a solar array or other alternative energy source. The unit is designed as a low power but fully functional nitric oxide delivery system for inhalation therapy, that can be used as a transport device during the movement of a patient or as a delivery device in those remote areas of the world that do not currently have electrical power readily available.


5. A unit that is one of the world’s first nitric oxide dilution systems designed for research. A patent pending technology utilizes pure 100% nitric oxide from a pressurized tank source and dilutes it with air or other non-reactive diluent gas to provide a 1 to 500 ppm source of high purity nitric oxide for investigational applications.




16






LIQUIDITY AND CAPITAL RESOURCES


At September 30, 2019, we had assets of $83,667 with current assets of $45,788 and liabilities of $387,079. Our current assets consisted of cash in the amount of $41,838 and prepaid expenses in the amount of $3,950.  We currently have no revenue and have had to rely on loans from shareholders or sale of our stock to cover expenses. Without additional capital, we will not be able to stay in business and move our business plan forward.  We anticipate, based on our preliminary budgets, that we will need $300,000 in additional financing for the next twelve months to cover our corporate overhead and need an additional $900,000 to cover ongoing product development. Since we will not have a commercial product in the next twelve months, we will have to continue to rely on outside funding to support our operations and product development and testing efforts.  Given the financial state of NU-MED, we will not be able to seek traditional bank financing and have to rely on private stock sales as well as potential loans from investors and shareholders.  We cannot estimate the full costs to bring our proposed product to market or the timing of such commercialization.  Given the nature of our product being in the medical field, testing is very expensive and we would need more capital prior to completing the testing phase.  Any refinement or modification of the product after the prototype is developed would also require additional capital.  At this time, we will have to continue to rely on outside capital and a budget that may require adjustment as we move further in the product development phase.


RESULTS OF OPERATIONS


FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019


For the three months ended September 30, 2019 and 2018, we had no revenue.  Operating expenses were $146,213 for the three-month period ended September 30, 2019 compared to $522,069 for the three-month period ended September 30, 2018. The decrease relates primarily to consulting fees of $57,781 and $414,618 relating to stock issued for services during the three months ended September 30, 2019 and 2018, respectively.  Other expense for both periods results from interest charges accrued on the convertible notes.


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019


For the nine months ended September 30, 2019 and 2018, we had no revenues and operating expenses of $813,726 and $833,345, respectively.  For the nine months ended September 30, 2019 we had other expenses of $13,229.  For the nine months ended September 30, 2018, we had other expense of $14,544.  The major expense in both of the nine-month reporting periods is for consulting expenses incurred in the development of our products.  We will be dependent on outside capital to support operations for the foreseeable future and at this time do not have any commitments for additional capital.  We do not anticipate any revenue for the foreseeable future as our products are in the development stage.


OFF-BALANCE SHEET ARRANGEMENTS


The Company does not have any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.


Forward-looking Statements


Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Quarterly Report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that



17






management’s expectations will necessarily come to pass. Factors that may affect forward-looking statements include a wide range of factors that could materially affect future developments and performance, including the following:


Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.


This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


Not applicable.


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15 or 15d-15e) under the Exchange Act as of the end of the period covered by this report.  Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.


Based on that evaluation, as of September 30, 2019, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  


Changes in internal control over financial reporting


There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.




18






PART II - OTHER INFORMATION


ITEM 1.  Legal Proceedings


None.


ITEM 1A.  Risk Factors


Not applicable.


ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds


Recent Sales of Unregistered Securities


During the nine months ended September 30, 2019, we received cash proceeds of $246,930 under a subscription agreement entered into in September 2017, under which agreement the Buyer may purchase shares of common stock at $0.25 per share.  As of September 30, 2019, no shares have been issued for the funds received.  In January 2019, 40,000 shares of restricted common stock were issued under an agreement entered into during 2018, for which cash was received during 2018 and 200,000 shares of restricted common stock were issued under a share purchase agreement entered into in January 2019.  


In July 2019, the Company entered into a stock purchase agreement with a related party, significant shareholder and debt holder, under which the buyer may purchase up to $250,000 in shares of common stock at $0.25 per share.  The agreement expired on December 31, 2020.  We received cash proceeds of $28,086 under this agreement during the nine-month period ended September 30, 2019 for 112,344 shares of restricted common stock.  At the date of this report no stock has been issued against this agreement.


Other Securities Transactions


None.

 

Use of Proceeds of Registered Securities


None.


Purchases of Equity Securities by Us and Affiliated Purchasers


During the nine months ended September 30, 2019, we have not purchased any equity securities nor have any officers or directors of the Company.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


Not applicable.


ITEM 4.  Mine Safety Disclosure


Not applicable.


ITEM 5.  Other Information.


None.




19






ITEM 6.  Exhibits


a) Index of Exhibits:


Exhibit Table #

Title of Document

Location


31.1

Rule 13a-14(a)/15d-14a(a) Certification – CEO

This filing


31.2

Rule 13a-14(a)/15d-14a(a) Certification –CFO

This filing


32

Section 1350 Certification – CEO & CFO

This filing


101.INS

 XBRL Instance**


101.XSD 

XBRL Schema**


101.CAL

 XBRL Calculation**


101.DEF

 XBRL Definition**


101.LAB

XBRL Label**


101.PRE

XBRL Presentation**

SIGNATURES


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


NU-MED PLUS, INC.,

(Registrant)



November 14, 2019

By: /s/ Jeffrey L. Robins

Jeffrey L. Robins, CEO, Principal Executive Officer


November 14, 2019

By: /s/Keith L. Merrell

Keith L. Merrell, CFO/Principal Accounting

       Officer






20