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 June 30, 2020



[   ] 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:  

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

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]


Indicate by check mark whether the registrant has submitted electronically on its corporate Web site, if any, 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 [  ]   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 August 19, 2020


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

50,228,469 shares of $0.001 par value common stock on August 19, 2020




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

16

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

19

ITEM 4

CONTROLS AND PROCEDURES

19


PART II

OTHER INFORMATION

20

 

 

 

ITEM 1

LEGAL PROCEEDINGS

20

ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

20

ITEM 3

DEFAULTS UPON SENIOR SECURITIES

20

ITEM 4

MINE SAFETY DISCLOSURE

20

ITEM 5

OTHER INFORMATION

20

ITEM 6

EXHIBITS

20

 

 

 

SIGNATURES

21




1




Part I - FINANCIAL INFORMATION


Item 1. Financial Statements

NU-MED PLUS, INC.



FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2020


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, 2019, accompanying notes, and with the historical financial information of the Company.  The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020.





2




Nu-Med Plus, Inc.

Financial Statements

(Unaudited)


Table of Contents




 

 

Page No.

 

 

 

Condensed Balance Sheets at June 30, 2020 (unaudited) and December 31, 2019

 

4

 

 

 

Condensed Statements of Operations (unaudited) for the three and six months ended

June 30, 2020 and 2019

 


5

 

 

 

Statement of Stockholders’ Deficit for the three and six months ended June 30, 2020 and 2019 (unaudited)

 


6

 

 

 

Condensed Statements of Cash Flows (unaudited) for the six months ended June 30, 2020 and 2019

 


8

 

 

 

Notes to the Condensed Financial Statements

 

9

 

 

 





3




NU-MED PLUS, INC.

Condensed Balance Sheets


 

 

 

 

June 30,

December 31,

 

 

 

 

2020

(unaudited)

2019

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash

 

 $             6,106

 $            7,079

 

Prepaid expense

 

826,655

6,879

 

 

Total current assets

 

832,761

13,958

Long-term Assets

 

 

 

 

Property and equipment, net

 

17,329

23,425

 

Operating lease right-of-use of assets

 

2,148

8,396

 

      

Total long-term assets

 

19,477

31,821

 

 

Total assets

 

 $         852,238

 $          45,779

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$            58,049

$           39,820

 

Accounts payable – related party

 

22,111

14,085

 

Accrued expense

 

6,586

9,579

 

Accrued interest – related party

 

112,273

114,231

 

Operating lease liability

 

2,148

8,396

 

Convertible promissory notes – related party

 

230,100

230,100

 

 

Total current liabilities

 

431,267

416,211

Long-term liabilities

 

 

 

          Note payable

 

9,384

-

          Total liabilities

 

440,651

416,211

Commitments and contingencies

 

-

-

Stockholders' 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; 50,228,469 and 44,476,625 shares issued and outstanding, as of June 30, 2020 and December 31, 2019, respectively.

 

        50,229

        44,477

 

Additional paid-in capital

 

8,132,393

5,849,784

 

Stock subscription payable

 

21,000

465,541

 

Accumulated deficit

 

(7,792,035)

(6,730,234)

 

 

Total stockholders' deficit

 

411,587

(370,432)

 

 

Total liabilities and stockholders' deficit

 

 $          852,238

 $         45,779


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 June 30, 2020

Three months ended June 30, 2019

Six months ended June 30, 2020

Six months ended June

30, 2019

 

 

 

 

 

 

 

 

Revenue

 

 $                -   

 $              -   

$                 -

$                  -

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

General and administrative expense

 

29,582

11,335

37,985

49,852

 

Payroll expense

 

503,858

64,486

571,333

125,980

 

Rent expense

 

4,690

4,598

9,379

9,197

 

Professional and consulting fees

 

363,269

159,945

428,966

475,288

 

Depreciation expense

 

3,048

3,421

6,096

7,196

 

 

Total operating expenses

 

904,446

243,785

1,053,759

667,513

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

(904,446)

(243,785)

(1,053,759)

(667,513)

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

Interest expense

 

(4,021)

(4,399)

(8,042)

(8,866)

 

 

Total other expense

 

(4,021)

(4,399)

(8,042)

(8,866)

 

 

 

 

 

 

 

 

Income tax expense

 

            -

            -

-

-

 

 

 

 

 

 

 

 

 

Net loss

 

$  (908,467)

$ (248,184)

$(1,061,801)

$ (676,379)

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share

 

$        (0.02)

$       (0.00)

$       ( 0.02)

$       ( 0.01)

 

Weighted average common shares

outstanding – basic and diluted

 

47,336,288

45,336,283

47,352,260

45,129,067









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 Six Months Ended June 30, 2020

(Unaudited)

 

Preferred Stock

Common Stock

Additional Paid-In Capital

Stock Subscription Payable

Accumulated Deficit

Total

 

Shares

Amount

Shares

Amount

Balance, January 1, 2020

-

$          -

44,476,625

$  44,477

$ 5,849,784

$   465,541

$  (6,730,234)

 $  (370,432)

Cash received for  subscription payable

-

-

-

-

-

106,439

-

106,439

Stock-based compensation

-

-

-

-

50,000

-

-

50,000

Net loss for the three months  ended March 31, 2020

-

-

-

-

-

-

(153,334)

(153,334)

Balance, March 31, 2020

-

$          -

44,476,625

$44,477

$5,899,784

$571,980

$ (6,883,568)

$  (367,327)

Cash received for  subscription payable

-

-

-

-

-

125,731

-

125,731

Common stock issued for subscription payable

-

-

2,706,844

2,707

674,004

(676,711)

-

-

Stock issued for accrued interest on convertible note

-

-

1,000,000

1,000

9,000

-

-

10,000

Stock issued for prepaid services

-

-

1,400,000

1,400

939,100

-

-

940,500

Stock-based compensation

-

-

645,000

645

610,505

-

-

611,150

Net loss for the three months  ended June 30, 2020

-

-

-

-

-

-

(908,467)

(908,467)

Balance, June 30, 2020

-

$          -

50,228,469

$50,229

$8,132,393

$21,000

$ (7,792,035)

$ 411,587




6







NU-MED PLUS, INC.

Statements of Stockholders’ Equity (Deficit)

For the Three and Six Months Ended June 30, 2019

(Unaudited)

 

Preferred Stock

Common Stock

Additional Paid-In Capital

Stock Subscription Payable

Accumulated Deficit

Total

 

Shares

Amount

Shares

Amount

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)















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




7







Nu-Med Plus, Inc.

Condensed Statements of Cash Flows

(Unaudited)

 

 

 

Six months ended

June 30, 2020

Six months ended

June 30,

2019

Cash flows from operating activities:

 

 

 

Net loss

$(1,061,801)

$ (676,379)

 

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

 

 

 

 

Depreciation and amortization

6,096

7,196

 

 

Amortization of prepaid consulting

119,749

-

 

 

Amortization of right of use asset

6,248

6,047

 

 

Stock issued for services performed

661,150

100,000

 

 

Changes in operating assets and liabilities:

 

 

 

 

     (Increase) decrease in prepaid expenses

975

213,224

 

 

     Increase (decrease) in operating lease liability

(6,248)

(6,047)

 

 

     Increase (decrease) in accounts payable

18,229

(2,204)

 

 

     Increase (decrease) in accounts payable-related party

8,026

-

 

 

     Increase (decrease) in accrued expense

5,049

(9,051)

 

 

Net cash used in operating activities

(242,527)

(367,214)

Cash flows from investing activities:

 

 

 

 

Net cash used in investing activities

-

-

Cash flows from financing activities

 

 

 

Proceeds from stock subscriptions

232,170

170,598

 

Proceeds from notes payable

9,384

-

 

Proceeds from issuance of common stock

 

50,000

 

Payments on financing lease

-

(5,211)

 

 

Net cash provided by financing activities

241,554

215,387

 

 

Net increase (decrease) in cash

(973)

(151,827)

Cash at beginning of period

7,079

167,513

Cash at end of period

$     6,106

$    15,686

Supplemental schedule of cash flow information

 

 

 

Cash paid for interest

$             -

$        878

 

 

 

 

Non-Cash Investing and Financing Activities

 

 

 

Common stock issued for subscription payable

$ 676,711

$   10,000

 

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

$             -

$     8,063

 

Conversion of accrued interest for common stock

$   10,000

$             -

 

Common stock issued for prepaid consulting

$ 940,500

$             -

 

 

 

 


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



8







Nu-Med Plus, Inc.

Notes to the Condensed Financial Statements

June 30, 2020


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


The recent COVID 19 Pandemic (“the Pandemic”) has had a dramatic effect on our business as well as the business of our contract developers.  The wide ranging effects on the World Wide business market has led to a closure or partial closure of firms we are relying on in our product development. As a result their work on our project has been slowed.  While we cannot predict when the influence of the Pandemic will end, we trust businesses will be able to open and expand activities to their former levels and increase following a return to normal operations.  


a. Basis of Presentation


The accompanying unaudited condensed consolidated financial statements include the accounts of Nu-Med Plus, Inc. (the “Company”). These financial statements are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. Therefore, these statements should be read in conjunction with the most recent annual consolidated financial statements of Nu-Med Plus, Inc. for the year ended December 31, 2019 included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 30, 2020. In particular, the Company’s significant accounting principles were presented as Note 1 to the Consolidated Financial Statements in that report. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020.


b. Revenue Recognition


The Financial Accounting Standards Board (“FSB”) 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.


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.


c. 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.




9







d. 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 we currently have on deposit is within the limits for which the FDIC insures.


e. 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.


f. 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 cash, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments.  Additionally, we measure certain financial instruments at fair value on a recurring basis.


g. 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.  The company included 84,000 and 4,035,340 shares subscribed but unissued in its calculation of basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019, respectively.


 

For the three months ended June 30, 2020

For the three months ended June 30, 2019

For the six months ended June 30, 2020

For the six months ended June 30, 2019

 

 

 

 

 

Net loss (numerator)

$            (908,467)

$             (248,184)

$            (1,061,801)

$             (676,379)

Shares (denominator)

47,336,288

45,336,283

47,352,260

45,129,067

Net loss per share amount – basic and diluted

$                  (0.02)

$                   (0.00)

$                     (0.02)

$                   (0.01)


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 June 30, 2020 and 2019 there were 35,175,000 and 33,620,000 respectively, potential dilutive shares that needed to be considered as common share equivalents.



10







As of June 30, 2020 and 2019 the dilutive shares were excluded from the calculation for diluted earnings per share as there was a net loss and their inclusion in the calculation would be anti-dilutive.


h. Concentrations and Credit Risk - The Company has relied on a small group of investors to fund its operations.  If this group becomes unable or unwilling to provide additional funding, the Company may be unable to remain in business or to execute on its business plan.


i. 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.


j. 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 fair the fair value of the consideration given.  Compensation cost is recognized over the requisite service period.


The Company, in accordance with ASC 505, Compensation – Stock Compensation, 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.


k.  Leases


The Company accounts for all leases in accordance with ASC 842, Leases, recognizing both assets and liabilities on the balance sheet for the right to use those assets for the lease term and obligations to make the lease payments created by those leases that have terms of greater than twelve months.


l. Recent Accounting Pronouncements


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, which currently only includes share-based payments to employees, 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. This ASU supersedes Subtopic 505-50, “Equity — Equity-Based Payments to Nonemployees”. The amendments to ASU 2018 - 07 are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, but no earlier than a company’s adoption date of ASU No. 2014-09, (Topic 606), “Revenue from Contracts with Customers”. The Company adopted ASU 2018-07 effective January 1, 2020.  The adoption of ASU 2018-07 did not have a material effect on its condensed financial statements.




11







In December 2019, the FASB issued ASU 2019-12, “Income Taxes Topic 740-Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which intended to simplify various aspects related to accounting for income taxes/.  ASU 2019-12 removes certain exceptions to the general principles of Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740.  The effective date will be the first quarter of fiscal year 2021 and early adoption is permitted.  Adoption of Topic 740 is not expected to have a material effect on its condensed 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 consolidated 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 2 - GOING CONCERN


The Company acknowledges that the funds on hand as of June 30, 2020, 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 August 31, 2020. 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.


NOTE 3 – PROPERTY AND EQUIPMENT


Property and equipment and related accumulated depreciation consisted of the following at June 30, 2020, and December 31, 2019:


 

June 30, 2020

 

December 31, 2019

 

 

 

 

 

 

Computer and office equipment

$                   90,368

 

$                      90,368

 

Accumulated depreciation

(73,039)

 

(66,943)

 

 

 

 

 

 

     Total Fixed Assets

$                    17,329

 

$                      23,425

 


Depreciation expense for the six months ended June 30, 2020 and 2019 was $6,096 and $7,196, respectively.


NOTE 4 - 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 June 30, 2020.


NOTE 5 - COMMON STOCK

 

Stock Subscription Payable:


At June 30, 2020 and December 31, 2019, the Company had $21,000 and $465,541, respectively, in stock subscriptions payable for which it is obligated to issue 84,000 and 1,862,164 shares of restricted common stock, respectively, pursuant to separate subscription agreements.



12







April 2020 Subscription Agreement

In April 2020, 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, 2021.  The Company received $103,106 under this agreement in the six months ended June 30, 2020.  At the date of this report 328,424 shares of common stock have been issued, leaving a balance of 84,000 shares to be issued.  As of June 30, 2020 a total of 1,187,576 shares of common stock for $296,894 are available for purchase under this agreement.


July 2019 Subscription Agreement

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.  The Company received $250,000 under this agreement and in June 2020 issued 1,000,000 in settlement of its obligations under this agreement.


September 2017 Subscription Agreement

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 expired on August 30, 2018.  The Company received $153,070 under this agreement during 2018 and $246,930 during 2019. As of December 31, 2019, the Company had stock subscription payables related to this agreement of $344,605 or 1,378,420 shares of common stock.  In the six months ended June 30, 2020, the Company issued the 1,378,420 shares of common stock in settlement of its obligation under this agreement.


Common Stock Issued for Cash

During the six months ending June 30, 2019, the Company issued 200,000 shares of restricted common stock for $50,000 to an unrelated investor.  


Common Stock Issued for conversion of liabilities

During the six months ended June 30, 2020, the Company issued 1,000,000 shares of restricted common stock in exchange for the conversion of $10,000 of accrued interest on notes payable.


Common Stock Issued to Officer:

In February 14, 2018 the Company announced that the consulting agreement with the Chief Financial Officer (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 his service.  The term of the agreement is for one year, which term automatically renews for one-year extensions up to four years unless terminated by either party with 30 days written notice.  The Company issued all 2,000,000 shares to Mr. Merrell on August 20, 2018.  Any common shares not earned during the four-year period are to be returned or cancelled.  A charge will be made each quarter as the shares are earned under the provisions of the agreement until such time as all shares have been earned.  A charge of $100,000 and $100,000 was recorded for the six months ended June 30, 2020 and 2019, respectively.  In June 2020 Mr. Merrell was issued an additional 500,000 shares which vested at issuance, resulting in a $435,000 stock-based compensation charge recorded in the six-month period ended June 30, 2020.


Common Stock Issued for Services:

During the six months ended June 30, 2020 the Company issued 1,545,000 shares of restricted common stock to consultants for services performed and/or to be performed.  The issuances were valued at $1,601,650 and of that amount, $940,500 was recorded as prepaid assets. The Company incurred stock-based compensation of $245,899 during the six-months ended June 30, 2020. As of June 30, 2020, the remaining prepaid balance of $820,751 remains to be amortized as the services are performed.




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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 $432,750 was expensed during the year ended December 31, 2018.  The remaining balance of $206,250 was expensed during the year ended December 31, 2019.


NOTE 6 – PROMISSORY NOTES


$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 and to be provided during the period April 1, 2012 through March 31, 2013.  The note is due on demand, bears annual interest at 5.5%, and is 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 which of $0.01 per share for all unpaid principal and interest.  As of June 30, 2020 and December 31, 2019 interest accrued, but unpaid, was $63,733 and $60,953, respectively.


$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, with a price protection provision to a lower conversion price.  The balance of this note was $130,100 at June 30, 2020 and December 31, 2019 with accrued interest balances of $47,747 and $52,557, respectively.  During the six-month period ended June 30, 2020, the Company received a request to convert $10,000 of interest accrued and unpaid to shares of restricted common stock.  Under the conversion terms of the agreement 1,000,000 shares of restricted stock were issued.


$9,384 Promissory Note

The Company applied for and received a $9,384 loan under the Paycheck Protection Program administered by the Small Business Administration.  The note bears an annual interest rate of 1% and has a maturity date of May 8, 2022.  The terms of the loan provide that an application for forgiveness of the loan amount may be requested if the funds were used for payroll, medical insurance, rent and utilities.  As all of the funds were used in the allowable categories, the Company will file an application for forgiveness as soon as the bank makes available the form for such request.


NOTE 7 - 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.  


Amortization of $6,248 was recorded as rent expense in the six month period ended June 30, 2020, leaving an operating right-of-use asset at June 30, 2020 of $2,148 and an operating lease liability of $2,148.  Amortization of $6,047 was recorded as rent expense for the six month period ended June 30, 2019


Obligations under this lease are as follows:

 

 

 

 

 

2020

2021

2022

Office lease

 

 

 

 $    2,076

$               -   

$                   -   


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.


Consulting Agreement


In June 2020, the Company entered into consulting agreements with Roger Gill and Peter Kristensen.  Both of the agreements begin June 22, 2020 and run for a period of twelve months, terminating June 30, 2021.  Under the terms of the agreements Mr. Gill will receive 500,000 shares of restricted common stock and Mr. Kristensen will receive 100,000 shares of restricted stock for their services.  The fair-value of the stock was $565,500 and was recorded as a prepaid. During the six months, the company amortized $10,845 of the prepaid expense.  As of June 30, 2020, the remaining $554,655 was remaining in prepaid expenses, to be amortized over the term of the agreements.


On March 15, 2020 the Company entered into a service agreement with Hanover International, Inc. to provide advisory services to the Company.  The contract is a one year contract, but may be cancelled with thirty days notice any time after the 91st day of the agreement.  Hanover will receive a fee of $3,500 per month, from which fee it pays all of its expenses.  In addition, Hanover will receive 750,000 shares of restricted common stock, earned in quarterly tranches of 187,500 shares, deemed earned and issuable after services are provided for each quarter. As of June 30, 2020 all of the shares to which the Company is obligated under this agreement have been issued, with the unearned portion included in prepaid expenses.  The shares were issued at $0.50 per share for a total value of $375,000.  The amount is found in prepaid expenses, with $108,904 of the total being expensed in the six-month period ended June 30, 2020.  The remaining prepaid amount will be amortized over the remaining life of the agreement.


Note 8 - SUBSEQUENT EVENTS


The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no 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




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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 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 hope 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-



17







reactive diluent gas to provide a 1 to 500 ppm source of high purity nitric oxide for investigational applications.


LIQUIDITY AND CAPITAL RESOURCES


At June 30, 2020, we had assets of $852,238 with current assets of $832,761 and liabilities of $431,267. Our current assets consisted primarily of cash in the amount of $6,106 and prepaid expenses in the amount of $826,655.  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.  At this time, we have a stock subscription agreement under which the investor has the right to purchase up to $400,000 of restricted common stock at a price of $0.25 per share.  During the six-month period ended June 30, 2020 we accepted $103,106 under this agreement, leaving a balance of $296,894 available for funding.  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


Three Months Ended June 30, 2020


For the three months ended June 30, 2020 and June 30, 2019, we had no revenues and operating expenses of $904,446 and $243,785, respectively.  The increase in operating expenses results from an increase in the use of consultants as we near finalization of the design and production of our first nitric oxide dispensing units and engage with investment banking groups to raise additional funds.  Shares of common stock were also issued in the six months ended June 30, 2020, resulting in a stock-based compensation charge  for stock issued issued to employees and for consulting services of $561,150.  For the three months ended June 30, 2020 we had other expenses of $4,021.  For the three months ended June 30, 2019, we had other expense of $4,399.  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 beyond the $400,000 stock subscription earlier mentioned.  We do not anticipate any revenue for the foreseeable future as our products are still in the development stage.


Six Months Ended June 30, 2020


For the six months ended June 30, 2020 and 2019 we had no revenues and incurred operating expenses of $1,053,759 and $667,513, respectively.  The $386,216 increase is primarily the result of the stock issued as share based compensation and for consulting services, as detailed above.  For the six months ended June 30, 2020 and 2019, we had other expense of $8,042 and $8,866, respectively.


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.




18







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 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-15c 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 June 30, 2020, 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



19







that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.


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


None.


Other Securities Transactions


None.

 

Use of Proceeds of Registered Securities


None.


Purchases of Equity Securities by Us and Affiliated Purchasers


During the six months ended June 30, 2020, 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.


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



20








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)



August 19, 2020

By:  /s/ Jeffrey L. Robins

 

Jeffrey L. Robins, CEO, Principal Executive Officer


August 19, 2020

By: /s/Keith L. Merrell

Keith L. Merrell, CFO/Principal Accounting Officer






21