UEEC US Equity☆

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this annual report on Form 10-K. This discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under ‘Risk Factors’ and elsewhere in this annual report on Form 10-K.

Results of Operations years ending December 31, 2021 and 2020

The following table sets forth a summary of certain key financial information for the years ended December 31, 2021 and 2020:

Basic and diluted $ (0.14 ) $ (0.09 )

Year ended December 31, 2021 versus year ended December 31, 2020

During the year ended December 31, 2021 and 2020, the Company had $59 and $643 of revenues, respectively. The minimal revenues are due to the continued focus of the Company’s capital and resources towards obtaining a Class III PMA.

Total operating expenses for the year ended December 31, 2021 and 2020 were $29,800,669 and $14,849,099, respectively. The increase in operating expenses is due primarily to a $14,138,292 increase in stock-based compensation expense, $69,649 write-off of inventory, $101,350 write-off of property and equipment and $682,000 of litigation settlement expense during 2021 (see Note 7 to the financial statements) which the Company did not have in 2020.

The increase in stock-based compensation is primarily related to vesting and amortization of RSUs. During the year ended December 31, 2021, the Company amended the RSU agreement with its former Chief Executive Officer and Chairman. The amendment resulted in the vesting of 21,970,000 RSUs along with the issuance of an additional 2,000,000 shares of restricted stock as a bonus. The change in vesting and issuance of the bonus shares of common stock resulted in the immediate recognition of $26,127,300 in stock-based compensation expense. The Company also recognized $43,121 of stock-based compensation due to the amortization of the RSUs that vested on January 1, 2021, issued 100,000 shares of common stock for settlement of a consulting agreement valued at $111,000, issued 125,000 shares of common stock for services valued at $102,500 and issued 560,000 shares of common stock valued at $477,175 due to vesting of RSUs.

During the year ended December 31, 2020, the Company recorded $12,420,930 of stock-based compensation related to an amendment to the restricted stock award agreement made during the year. The amendment resulted in the vesting of 7,595,000 of restricted stock unit (“RSU”) awards and the immediate recognition of $5,392,450 of expenses and also $7,028,480 of stock-based compensation due to the amortization of the RSUs that vested on January 1, 2021. The Company also issued 425,000 shares of common stock for services with a value of $301,875.

Other income (expense) for the year ended December 31, 2021 and 2020 was $(748,548) and $(862,749), respectively. The increase in other expense was due to total interest expense of $618,251 and loss on debt settlement of $434,570 offset by other income of $304,273. The increase in interest expense is primarily due to the amortization of beneficial conversion features on convertible notes payable and convertible notes payable – related party during the year ended December 31, 2021 totaling $608,710 compared to $535,766 in the year ended December 31, 2020. The loss on debt settlement is due to the Company issuing shares of common stock with a fair value of $1,205,718 for the settlement of $771,148 of various debts and accrued liabilities – related party. Other income is due to the Company receiving $304,273 as full and final payment for settlement of its December 2019 arbitration with Maxim.

Our net loss for the year ended December 31, 2021 was $30,549,183 as compared to a net loss of $15,711,400 for the prior year. The increase in the net loss is due to an increase in stock-based stock compensation of $14,138,292, $69,649 write-off of inventory, $101,350 write-off of property and equipment and an increase in litigation settlement expenses of $682,000 compared to the prior year for the reasons described above.

Financial Condition, Liquidity and Capital Resources

As of December 31, 2021, the Company had a negative working capital of $1,141,894. The Company has not yet attained a level of operations, and for the foreseeable future will not be pursuing commercial operations, which will allow it to meet its current overhead expense obligations. The report of our independent registered public accounting firm on our 2021 and 2020 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. While the Company has funded its initial operations with private placements, and unsecured loans from related parties, there can be no assurance that adequate financing will continue to be available to the Company and, if available, on terms that are favorable to the Company. Our ability to continue as a going concern is also dependent on many events outside of our direct control, including, among other things, our ability to achieve our business goals and objectives, as well as improvement in the economic climate.

Cash Flows

The Company’s cash on hand as of December 31, 2021 and 2020 was $21,799 and $46,076, respectively.

The following table summarizes selected items from our statements of cash flows for the years ended December 31, 2021 and 2020:

Net cash used in investing activities - (101,350 )

Net increase (decrease) in cash and cash equivalents $ (24,277 ) $ 29,452

Net Cash Provided by (Used in) Operating Activities

Net cash used in operating activities for the year ended December 31, 2021 was $828,079. The Company had net loss of $30,549,183 offset by non-cash stock-based compensation of $26,861,097, amortization of debt discount of $608,710, stock issued for litigation settlement of $312,000, write-off of inventory of $69,649, write-off of property and equipment of $101,350 and a loss on settlement of debt of $434,570. The Company also had a decrease in inventory of $26, change in accounts payable and accrued expenses of $693,692, a change in accounts payable and accrued expenses related party of $525,011 and a change in accrued litigation settlement of $120,000. The Company also had an increase in prepaid and other current assets of $5,000.

Net cash used in operating activities for the year ended December 31, 2020 was $1,325,862. The Company had net loss of $15,711,400 offset by stock-based compensation of $12,722,805, amortization of debt discount of $535,766, write-off of inventory of $6,979, loss on debt settlement of $316,521, a decrease in inventory of $195, an increase in accounts payable and accrued expenses of $360,465 and an increase in accrued liabilities - related party of $442,807.

Net Cash Used by Investing Activities

The Company did not have any investing activities during the year ended December 31, 2021.

Net cash used in investing activities for the year ended December 31, 2020 was $101,350, used to purchase manufacturing equipment during the year.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities for the year ended December 31, 2021 was $803,802 consisting of $245,500 in proceeds from related party loans, $479,802 in proceeds from the sale of stock and $115,000 in proceeds from the issuance of convertible notes offset by $36,500 of repayments to related parties.

Net cash provided by financing activities for the year ended December 31, 2020 was $1,456,664, comprised of $1,130,696 in proceeds from the sale of stock and receipt of $831,730 from related parties offset by repayment of $505,762 in related party loans.

Off-Balance Sheet Arrangements

As of December 31, 2021 and 2020, we had no off-balance sheet arrangements.

Related Parties

Information concerning related party transactions is included in the financial statements and related notes, appearing elsewhere in this annual report on Form 10-K.

Critical Accounting Policies

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of its HemoStyp product by applying the following steps: (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 each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

The Company receives orders for its HemoStyp products directly from its customers. Revenues are recognized based on the agreed upon sales or transaction price with the customer when control of the promised goods are transferred to the customer. The transfer of goods to the customer and satisfaction of the Company’s performance obligation will occur either at the time when products are shipped or when the products arrive and are received by the customer. No discounts were offered by the Company. The Company does not provide an estimate for returns as there is no anticipation for any returns in the normal course of business.

Stock Based Compensation

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions, stock-based compensation expense is measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measured. Share-based compensation for all stock-based awards to employees and directors is recognized as an expense over the requisite service period, which is generally the vesting period.

The Company accounts for stock compensation arrangements with non-employees in accordance with Accounting Standard Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which requires that such equity instruments are recorded at the value on the grant date.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by Item 8 can be found beginning on Page F-2 of this report.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

United Health Products, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of United Health Products, Inc. as of December 31, 2021 and 2020, and the related statement of operations, stockholders’ deficiency, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of United Health Products, Inc. as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 2 to the financial statements, the entity has suffered recurring losses from operations, has negative working capital and operations have not provided cash flows to cover operating expenses or meet current obligations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to United Health Products, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. United Health Products, Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Mac Accounting Group, LLP

We have served as United Health Products, Inc.’s auditor since 2019.

Midvale, Utah

April 1, 2022

PCAOB ID 6258

UNITED HEALTH PRODUCTS, INC.

Balance Sheets

December 31, December 31,

ASSETS

Current Assets

Prepaid and other current assets 5,000 -

Property and equipment - 101,350

Current Liabilities

Accrued liabilities - related parties 3,207 193,651

Accrued litigation settlement 120,000 -

Loans payable – related parties 219,000 -

Convertible notes payable, net of debt discount - 103,920

Convertible notes payable – related party, net of debt discount - 456,032

Commitments and Contingencies - -

Stockholders' Deficit

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 26,799 $ 217,100

See notes to financial statements.

UNITED HEALTH PRODUCTS, INC

Statements of Operations

Operating Costs and Expenses

Other income (expenses)

Income tax expense - -

Net Loss per common share:

Basic and diluted $ (0.14 ) $ (0.09 )

See notes to financial statements.

UNITED HEALTH PRODUCTS, INC

Statement of Stockholders’ Deficiency

For the Years Ended December 31, 2021 and 2020

Additional

Common Stock Paid-in Accumulated

Shares Amount Capital Deficit Total

Forgiveness of related party debt - - 32,395 - 32,395

See notes to financial statements.

UNITED HEALTH PRODUCTS, INC

Statements of Cash Flows

Cash Flows from Operating Activities:

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:

Write-off of property and equipment 101,350 -

Stock issued for litigation settlement 312,000 -

Changes in assets and liabilities:

Prepaid and other current assets (5,000 ) -

Accrued litigation settlement 120,000 -

Cash Flows from Investing Activities:

Purchase of property and equipment - (101,350 )

Net Cash Used In Investing Activities - (101,350 )

Cash Flows from Financing Activities:

Proceeds from convertible notes payable – related party - 580,000

Proceeds from convertible notes payable 115,000 -

Increase (decrease) in Cash and Cash Equivalents (24,277 ) 29,452

Cash and Cash Equivalents - Beginning of period 46,076 16,624

CASH AND CASH EQUIVALENTS - END OF PERIOD $ 21,799 $ 46,076

Supplemental cash flow information:

Cash paid for interest $ - $ -

Cash paid for income taxes $ - $ -

Schedule of Non-Cash Financing Activities:

Cancellation of common stock $ 117 $ 22

Forgiveness of related party debt $ - $ 32,395

Common stock issued to settle accrued liabilities – related party $ 561,148 $ -

Common stock issued for debt $ - $ 549,567

Debt discount related to beneficial conversion feature $ 234,912 $ 909,565

Common stock issued to settle related party advances $ 20,000 $ -

See notes to financial statements.

UNITED HEALTH PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Note 1. Description of the Business

United Health Products, Inc. (the “Company”) develops, manufactures, and markets a patented hemostatic gauze for the healthcare and wound care sectors. Our gauze product, HemoStyp®, is a neutralized, oxidized, regenerated cellulose (“NORC”) derived from cotton and designed to absorb exudate/drainage from superficial wounds and help control bleeding. We are in the process of seeking regulatory approval to sell our Hemostyp product line into the U.S. Class III and European Union CE Mark surgical market.

Note 2. Significant Accounting Policies

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred recurring net losses, negative working capital and operations have not provided cash flows. Additionally, the Company does not currently have sufficient revenue producing operations to cover its operating expenses and meet its current obligations. In view of these factors, there is substantial doubt about the Company's ability to continue as a going concern. The Company intends to finance its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital and other business requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus (COVID-19) as a pandemic. As a result, economic uncertainties have arisen which have the potential to negatively impact the Company’s ability to raise funding. Other factors that carry financial implications for the Company could occur although the potential impacts are unknown at this time.

Basis of Presentation

The Company prepares its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. Changes in the economic environment, financial markets, as well as in the healthcare industry, and any other parameters used in determining these estimates, could cause actual results to differ.

Cash and Cash Equivalents

The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.

Fair Value Measurements

Accounting principles generally accepted in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2021 and 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Income Taxes

The Company accounts for income taxes using a method that requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities which is commonly known as the asset and liability method. In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as an expense in the applicable year. The Company does not have a liability for any unrecognized tax benefits. Management’s evaluation of uncertain tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof, with due consideration given to the fact that tax periods are open to examination by tax authorities.

As of December 31, 2021 and 2020, the Company has approximately $20.0 and $17.8 million of net operating loss carry-forwards, respectively, available to affect future taxable income and has established a valuation allowance equal to the tax benefit of the net operating loss carry forwards and temporary differences as realization of the asset is not assured.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of its HemoStyp product by applying the following steps: (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 each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

The Company receives orders for its HemoStyp products directly from its customers. Revenues are recognized based on the agreed upon sales or transaction price with the customer when control of the promised goods are transferred to the customer. The transfer of goods to the customer and satisfaction of the Company’s performance obligation will occur either at the time when products are shipped or when the products arrive and are received by the customer depending on the shipping terms. No discounts are offered by the Company as part of payment terms. The Company does not provide an estimate for returns as there is no anticipation for any returns in the normal course of business.

Trade Accounts Receivable and Concentration Risk

We record accounts receivable at the invoiced amount and we do not charge interest. We review the accounts receivable by amounts due from customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. We will also maintain a sales allowance to reserve for potential credits issued to customers. We will determine the amount of the reserve based on historical credits issued.

There was no provision for doubtful accounts recorded at December 31, 2021 and 2020. The Company recorded $0 in bad debt expense for the years ended December 31, 2021 and 2020.

For the year ended December 31, 2021 one customer accounted for 100% of the Company’s net revenue.

For the year ended December 31, 2020 one customer accounted for 100% of the Company’s net revenue.

Inventory

Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Inventory on the balance sheet consists of raw materials purchased by the Company and finished goods.

Raw materials $ - $ 50,654

During the years ended December 31, 2021 and 2020, the Company determined that $69,649 and $6,979, needed to be impaired and written-off, respectively.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred. The Company incurred $166,510 and $206,572 in advertising and marketing costs during the years ended December 31, 2021 and 2020, respectively.

Shipping and Handling Costs

The Company includes shipping and handling cost as part of cost of goods sold.

Research and Development

The Company charges research and development costs to expense when incurred. The Company incurred $237,458 and $245,218 in research and development expenses during the years ended December 31, 2021 and 2020, respectively.

Stock Based Compensation

The Company accounts for share-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions, stock-based compensation expense is measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measured. Share-based compensation for all stock-based awards to employees and directors is recognized as an expense over the requisite service period, which is generally the vesting period.

The Company accounts for stock compensation arrangements with non-employees in accordance with Accounting Standard Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which requires that such equity instruments are recorded at the value on the grant date.

Per Share Information

Basic earnings per share are calculated using the weighted average number of common shares outstanding for the period presented. Diluted earnings per share is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. The dilutive effect of potential common shares is not reflected in diluted earnings per share because the Company incurred a net loss for the years ended December 31, 2021 and 2020 and the effect of including these potential common shares in the net loss per share calculations would be anti-dilutive.

The total potential common shares as of December 31, 2021 include 28,190,000 of restricted stock units. The total potential common shares as of December 31, 2020 include 59,330,000 of restricted stock units and 1,867,500 shares of common stock for convertible notes payable – related party.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:

Equipment 10 years

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.

Impairment of Long-lived Assets

The Company applies the provisions of ASC 360, Property, Plant and Equipment, where applicable to all long-lived assets. ASC 360 addresses accounting and reporting for impairment and disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 360. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.

When equipment is sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. During the years ended December 31, 2021 and 2020 the Company determined its property and equipment should be impaired and $101,350 and $0 was written off, respectively.

New Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

Under current GAAP, there are five accounting models for convertible debt instruments. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, the FASB decided to add disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital.

ASU 2020-06 will be effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of the adoption of this accounting pronouncement to its financial statements.

The Company considers all new pronouncements and management has determined that there have been no other recently adopted or issued accounting standards that had or will have a material impact on its financial statements.

Note 3. Related Party Transactions

Related party convertible notes payables

As of December 31, 2021 and 2020, convertible notes payable – related parties totaled $0 and $456,032, respectively.

During the year ended December 31, 2020, Mr. Beplate loaned the Company $251,730 which was convertible at $0.65. These loans resulted in a beneficial conversion feature of $83,156 which was recorded to interest expense – related party upon issuance. The Company made repayments to Mr. Beplate totaling $505,765, $87,750 was assigned to the Company’s legal counsel and $24,000 was forgiven during the year ended December 31, 2020, leaving a balance of $0 owed to Mr. Beplate as of December 31, 2020. These loans were made to pay for operating expenses of the Company, due on demand and carried no interest rate.

During the year ended December 31, 2020, Brian Thom, the Chief Executive Officer loaned the Company $450,000 and also converted $105,000 of accrued compensation into a convertible note. The note and loans were convertible at $0.50 per share at the discretion of the Mr. Thom, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The loans resulted in a beneficial conversion feature totaling $338,105 which was recorded as a debt discount. The debt discount was amortized through the maturity dates and $138,792 was amortized to interest expense – related party during the year ended December 31, 2020. As of December 31, 2020, the total outstanding balance of the note and loans was $555,000 and the remaining unamortized debt discount was $199,314.

During the year ended December 31, 2021, Mr. Thom converted $45,000 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Thom, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature of $45,000 which was recorded as a debt discount. The debt discount was amortized through the maturity date and a total of $244,314 for all of Mr. Thom’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $199,314 as of December 31, 2020 and the debt discount of $45,000 recorded during the current year. The remaining unamortized debt discount is $0.

The total outstanding principal balance of $600,000 which was related to $450,000 of loans to the Company and $150,000 of accrued compensation along with accrued interest of $10,135 was converted into 1,220,272 shares of common stock leaving $0 owed to Mr. Thom as of December 31, 2021.

During the year ended December 31, 2020, Louis Schiliro, the Chief Operating Officer loaned the Company $130,000 and also converted $150,000 of accrued compensation into a convertible note. The note and loans are convertible at $0.50 per share at the discretion of Mr. Schiliro, have a maturity date of March 31, 2021 and have an interest rate of 3%. During the year ended December 31, 2020, $110,000 of the convertible note payable along with $1,028 of accrued interest was assigned to the Company’s legal counsel leaving a total outstanding balance of the note and loans of $170,000. The loans and note resulted in a beneficial conversion feature totaling $174,985 which was recorded as a debt discount. The debt discount was amortized through the maturity dates and $105,331 was amortized to interest expense – related party during the year ended December 31, 2020.

During the year ended December 31, 2021, Mr. Schiliro converted $45,000 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Schiliro, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature of $45,000 which was recorded as a debt discount. The debt discount was amortized through the maturity date and a total of $114,654 for all of Mr. Schiliro’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $69,654 as of December 31, 2020 and the debt discount of $45,000 recorded during the current year. The remaining unamortized debt discount is $0.

During the year ended December 31, 2021, $175,000 of the convertible note payable along with $1,502 of accrued interest was assigned to one of the Company’s legal counsel leaving a total outstanding balance of $40,000. The remaining balance of $40,000 along with accrued interest was converted into 80,173 shares of common stock leaving $0 owed to Mr. Schiliro as of December 31, 2021.

During the year ended December 31, 2020, Kristofer Heaton, the Principal Financial Officer, converted $3,750 of accrued compensation into a convertible loan. The loan was convertible at $0.50 per share at the discretion of Mr. Heaton, had a maturity date of March 31, 2021 and carried an interest rate of 3%. This note resulted in a beneficial conversion feature totaling $3,750 which was recorded as a debt discount. The debt discount is being amortized through the maturity date and $0 was amortized to interest expense – related party during the year ended December 31, 2020.

During the year ended December 31, 2021, Mr. Heaton, converted $22,500 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Heaton, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature totaling $22,500 which was recorded as a debt discount. The debt discount is being amortized through the maturity date and a total of $26,250 for all of Mr. Heaton’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $3,750 as of December 31, 2020 and the debt discount of $22,500 recorded during the current period. The remaining unamortized debt discount is $0.

The total outstanding principal balance of $26,250 along with accrued interest was converted into 52,666 shares of common stock leaving $0 owed to Mr. Heaton as of December 31, 2021.

Interest expense – related party on the above convertible notes was $392,112 ($6,894 interest expense along with $385,218 of debt discount amortization) and $336,203 ($8,925 interest expense along with $327,278 of debt discount amortization) during the years ended December 31, 2021 and 2020, respectively. Accrued interest – related party due to these convertible notes was $2,308 and $7,503 as of December 31, 2021 and 2020, respectively.

Loans payable/Advances from related parties

During the year ended December 31, 2021, Mr. Schiliro advanced the Company $34,000 to pay for operating expenses and paid $30,000 of expenses on behalf of the Company.

During the year ended December 31, 2021, the Company issued 25,000 shares of common stock to settle $20,000 of the outstanding balance. The shares of common stock had a fair market value of $26,750 and the Company recorded a loss on debt settlement of $6,750.

As of December 31, 2021 and December 31, 2020, the balance owed to Mr. Schiliro was $44,000 and $0, respectively. These amounts were converted to a loan payable and have an interest rate of 10% and are due on demand.

During the year ended December 31, 2021, Mr. Thom loaned the Company a total of $175,000 to pay for operating expenses. As of December 31, 2021, the amount of $175,000 is owed to Mr. Thom. The loans have an interest rate of 10% and are due on demand.

Interest expense – related party on the above loans payable – related party was $2,308 during the year ended December 31, 2021 leaving an accrued interest – related party balance of $2,308.

Accrued liabilities

During the year ended December 31, 2020, $188,375 was paid to Mr. Beplate, $100,000 of accrued compensation was converted to a convertible note payable and then assigned to the Company’s legal counsel and $8,395 of accrued compensation was forgiven. The note was convertible at $0.50 per share at the discretion of the note holder, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature totaling $100,000 which was recognized into interest expense. As of December 31, 2021 and 2020, $0 and $0 was owed to Mr. Beplate, respectively.

As of December 31, 2021 and December 31, 2020, $0 and $74,056 was owed to Nate Knight, who was the Company’s Chief Financial Officer until November 2020, for accrued compensation and reimbursable expenses. During the year ended December 31, 2021, the Company issued 78,500 shares of common stock to settle the total balance owed of $74,056. The shares of common stock had a fair market value of $82,425 and the Company record a loss on debt settlement of $8,368.

As of December 31, 2021 and December 31, 2020, $899 and $0 was owed to Brian Thom, the Chief Executive Officer, for accrued compensation and reimbursable expenses. During the years ended December 2021 and 2020, $45,000 and $105,000 of compensation were converted into convertible loans as mentioned above. In the year ended December 31, 2021, $135,000 of accrued compensation was settled with the issuance of 270,000 shares of common stock. The stock had a fair market value of $221,400 which resulted in a $86,400 loss on settlement of debt (see Note 6).

As of December 31, 2021 and December 31, 2020, $0 and $59,467 was owed to Louis Schiliro, the Chief Operating Officer, for accrued salary and reimbursable expenses, respectively. During the years ended December 31, 2021 and 2020, $45,000 and $150,000 of compensation were converted into a convertible loan as mentioned above and in the year ended December 31, 2020 $30,000 was paid in cash.

During the year ended December 31, 2021, the Company issued 74,335 shares of common stock to settle the total prior year balance owed of $59,467 and issued 270,000 shares of common stock to settle $135,000 of accrued compensation. The shares of common stock had a total fair market value of $300,938 and the Company recorded a loss on settlement of debt in the amount of $106,471 (see Note 6).

As of December 31, 2021 and December 31, 2020, $0 and $52,625 was owed to Mr. Heaton, for accrued compensation and services provided. During the years ended December 31, 2021 and 2020, $22,500 and $3,750 of compensation were converted into a convertible note as described above.

During the year ended December 31, 2021, 320,250 shares of common shares of stock were issued to settle $105,000 of accrued compensation and $52,625 of prior accruals. The shares of common stock had a total fair market value of $262,605 and the Company recorded a loss on settlement of debt in the amount of $104,980 (see Note 6).

Equity transactions

On July 21, 2020, the Board of Directors approved amendments to RSU Agreements put in place on March 25, 2019 (“2019 RSU Agreement”). The approved amendments increased the amount of RSU’s granted to Mr. Beplate from 33,000,000 to 33,800,000, increased the amount of RSU’s granted to Mr. Schiliro from 8,000,000 to 10,000,000, increased the amount of RSU’s granted to Mr. Heaton from 50,000 to 500,000, increased the amount of RSU’s granted to the office administrator, who is a person affiliated with the Company’s former CEO from 250,000 to 500,000 and increased the amount of RSU’s granted to the Technical Product Supervisor, who is the son of the former office administrator from 250,000 to 500,000.

The July 21 amendment also changed the vesting terms so that 15% of RSUs vested on July 15, 2020, an additional 15% of RSU units upon FDA approval of a PMA Class III awarded to the Company, an additional 20% of RSU units on January 1, 2021 and the balance of all unvested RSU units on the earliest date that (a) the Company achieves $20 million in gross cumulative sales commencing as of January 1, 2020, (b) a Covered Transaction is consummated or (c) a Trigger Event occurs. Each Grantee has the option to delay the Vesting Date of all or part of his RSUs until no later than an event described in (b) or (c) above, by serving written notice to the Company prior to such Vesting Date.

The change in vesting terms resulted in a total of 6,795,000 of the RSU’s vesting on July 15, 2020 with 5,070,00 being issued to Mr. Beplate, 1,500,000 being issued to Mr. Schiliro, 75,000 being issued to Mr. Heaton, 75,000 being issued to the former office administrator, who is a person affiliated with the Company’s former CEO and 75,000 being issued to the Technical Product Supervisor, who is the son of the former office administrator. The change in vesting terms also resulted in a total of 50,000 of the RSU’s vesting on July 20, 2020 with 50,000 being issued to the Marketing and Advertising Supervisor, who is the daughter of the former office administrator. The vesting of the 6,845,000 RSU’s resulted in stock-based compensation expense of $4,859,950 which was the fair value of the stock on the vesting date.

The former office administrator resigned during the year ended December 31, 2020 and forfeited 425,000 of the remaining unvested RSU’s with a value of $301,750 ($70,567 of which had been recognized and reversed).

In November 2020, the Company granted Mr. Thom 11,500,000 RSU’s which subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones.

In December 2020, the Company entered into a second restricted stock unit agreement with Mr. Heaton. The second agreement issued an additional 1,000,000 RSU’s, 500,000 of which were granted on the award date and 500,000 of which would be granted on May 15, 2021 provided his professional services agreement was in effect on that date. The 500,000 RSU’s were granted during 2021 per the agreement. The RSU’s, subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones.

During the year ended December 31, 2020, the Company issued a total of 125,000 shares of restricted common stock to Mr. Thom, prior to becoming Chief Executive Officer, for services rendered. The shares had a fair market value of $100,625.

Per the vesting schedules of certain of the Company’s amended RSU Agreements, on January 1, 2021, 6,760,000 shares of common stock were issued to Mr. Beplate, 2,000,000 shares of common stock were issued to Mr. Schiliro and 100,000 shares of common stock were issued to Mr. Heaton.

On January 6, 2021, the Board of Directors approved the second amendment to the RSU Agreement between the Company and Mr. Beplate in conjunction with Mr. Beplate’s retirement from his day-to-day management role with the Company. The amendment accelerated the vesting and immediately settled his remaining RSU’s by issuing 21,970,000 shares of common stock. Further, as a bonus in recognition of Mr. Beplate’s service to the Company and in recruitment of new executive management, the Company issued to Mr. Beplate an additional 2,000,000 shares of common stock. The Company recorded $26,127,300 of stock-based compensation expense during the year ended December 31, 2021 related to the accelerated vesting of these RSU’s and issuance of common stock.

During the year ended December 31, 2021, 200,000 of Mr. Heaton’s RSU’s mentioned above vested due to achievement of certain Company objectives. The Company recorded stock-based compensation expense $220,000 related to the vesting of these RSU’s which was the grant date fair value.

During the year ended December 31, 2021, the Company issued 30,000 shares of common stock to Mr. Thom, 30,000 shares of common stock to Mr. Schiliro and 25,000 shares of common stock to Mr. Heaton for services rendered. The 85,000 shares of common stock had a total fair market value of $69,700.

Note 4. Convertible Notes

Convertible notes 2020

During the year ended December 31, 2020, certain service providers and a medical advisor converted $205,000 of accrued compensation into convertible notes. The notes were convertible at $0.50 per share at the discretion of the note holders, had a maturity date of March 31, 2021 and carried an interest rate of 3%. As of December 31, 2020, the convertible loans had a principal balance of $205,000 and the balance on the loans net of the debt discount was $103,920

During the year ended December 31, 2020, the Company’s legal counsel was assigned $298,778 worth of loans after paying various outstanding balances on behalf of the Company. In addition, the Company’s legal counsel converted $45,000 of accrued fees into a convertible note payable. The note was convertible at $0.50 per share at the discretion of the note holder, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature totaling $45,000 which was recorded as a debt discount, to be amortized through its maturity date. The Company’s legal counsel converted all of the convertible loans into 557,056 shares of common stock in accordance with the original conversion features of the notes, therefore no gain or loss on debt settlement was recognized and the total debt discount of $45,000 was recognized into interest expense. As of December 31, 2020, no amounts were owing to the Company’s legal counsel related to these transactions.

Interest expense was $1,537 and $0 during the year ended December 31, 2020 and the entire amount was accrued.

Convertible notes 2021

During the year ended December 31, 2021, the service providers and medical advisor converted $90,000 of accrued compensation into convertible notes. The notes were convertible at $0.50 per share at the discretion of the note holders, had a maturity date of March 31, 2021 and carried an interest rate of 3%. These notes resulted in a beneficial conversion feature of $90,000 which was recorded as a debt discount. The debt discount was amortized through the maturity dates and a total of $191,080 was amortized to interest expense during the year ended December 31, 2021, which included the unamortized debt discount of $101,080 as of December 31, 2020 and the $90,000 recorded during the year. The remaining unamortized debt discount is $0.

The total outstanding principal balance of $295,000 ($205,000 principal balance from 2020 and $90,000 principal balance from 2021) along with accrued interest of $3,569 was converted into 597,139 shares of common stock leaving $0 owed to the service providers and medical advisor as of December 31, 2021.

During the year ended December 31, 2021, one of the Company’s legal counsel was assigned $175,000 worth of convertible notes payable and $1,502 of accrued interest after paying outstanding balances owed to Mr. Schiliro (see Note 3). The Company’s legal counsel converted the entire balance of $176,502 into 350,000 shares of common.

During the year ended December 31, 2021, the Company issued a total of $115,000 in convertible notes to two unaffiliated individuals to pay for operating expenses. The notes were convertible at $0.85 per share provided that in the event the Company issues any shares of common stock before the maturity date at a price that is lower than $0.85 per share, the conversion price shall be reduced to equal such lower issue price per share. The notes had a maturity date of June 30, 2021 and carried an interest rate of 3%. These notes resulted in a beneficial conversion feature of $32,412 which was recorded as a debt discount. The debt discount was amortized through the maturity dates of the notes. A total amount of $32,412 was amortized to interest expense related to these two notes during the year ended December 31, 2021.

During the year ended December 31, 2021, the $115,000 principal balance and $397 of accrued interest was converted into 137,996 shares of common stock leaving a balance of $0 owed on the two convertible notes.

Note 5. Property and Equipment

As of December 31, 2021 and December 31, 2020, the balance of property and equipment consisted of the following:

December 31, December 31,

Equipment (not placed in service) $ - $ 101,350

Accumulated depreciation - -

During the year ended December 31, 2021, the equipment was fully impaired and $101,350 was written-off. The equipment had not yet been placed in service and therefore depreciation expense for the years ended December 31, 2021 and 2020 was $0 and $0, respectively.

During the years ended December 31, 2021 and 2020, the Company acquired property and equipment of $0 and $101,350, respectively.

Note 6. Issuances of Securities

Share issuances 2020

During the year ended December 31, 2020, the Company had the following common stock issuances:

Share issuances 2021

During the year ended December 31, 2021, the Company had the following common stock issuances:

Triton Purchase Agreement

On June 25, 2021, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with Triton to sell Triton up to $6,000,000 of common stock. Subject to the terms and conditions of the Purchase Agreement, Triton agreed to purchase from the Company $4,000,000 in value of common shares at closing, based on a purchase price determined by dividing $200,000,000 by the number of outstanding shares of Common Stock, as reported by the Company on its most recently filed Form 10-K or 10-Q. Among customary closing conditions in the Purchase Agreement, closings under the Purchase Agreement may occur after a registration statement covering the resale of the shares which Triton has agreed to purchase from the Company is filed by the Company and declared effective by the SEC, if and when the Company issues a purchase notice to Triton for the number of shares in the purchase notice. Under the terms of the Purchase Agreement, Triton has the right to reduce the amount requested in the purchase notice or not close if the marketplace of the Company’s shares is below a certain threshold at the time of closing.

In addition, the Purchase Agreement grants Triton the option to purchase up to $2,000,000 worth of additional shares of common stock at the same purchase price at any time prior to the second anniversary of the closing of the transaction.

On June 29, 2021, we filed a registration statement on Form S-3 covering the above shares. The Company’s S-3 registration statement was declared effective by the SEC on September 29, 2021.

The market value of the Company’s shares has remained below the level under which Triton is not obligated to complete a purchase of shares. Until such time as the market price for the Company’s shares rises above the threshold price defined in the Purchase Agreement, the Company will not have access to this funding.

Restricted stock units

As discussed in Note 3, during the year ended December 31, 2020 the Board of Directors approved amendments to the 2019 RSU Agreement.

The amendment resulted in 9,960,000 of the RSU’s vesting on January 1, 2021. The fair value of the 9,960,000 RSU’s was $7,071,600. The compensation expense was being amortized on a straight-line basis from the date of the amendment through January 1, 2021 which is the vesting date. Stock-based compensation of $43,121 was recognized as expense during the year ended December 31, 2021.

On January 6, 2021, the Board of Directors approved the second amendment to the Restricted Stock Unit Agreement between the Company and Mr. Beplate, former Chief Executive Officer and current Chairman of the Board, in conjunction with Mr. Beplate’s retirement from his day-to-day management role with the Company. The amendment accelerated the vesting and immediately settled his remaining RSU’s by issuing 21,970,000 shares of common stock. Per ASC 718-20-35, the change in vesting conditions resulted in a modification of the stock-based compensation awards. The modification is considered a Type III modification as described in ASC 718-20-55 and resulted in recording $23,947,300 of stock-based compensation expense which was the fair value of the shares on the date of the modification.

As discussed in Note 3, during the year ended December 31, 2020, Mr. Thom was granted 11,500,000 RSU’s and Mr. Heaton was granted 500,000 RSU’s. The vesting conditions are contingent upon the achievement of certain Company objectives and milestones which the management is unable to determine when they will be achieved.

In April 2021, the Company entered into an RSU agreement with a service provider granting 750,000 RSU’s on the date of the agreement and will grant an additional 750,000 RSU’s, upon the receipt by the Company of an FDA Class III PMA. The 750,000 RSU’s had a grant date fair value of $664,875. The RSUs, subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones which management is unable to determine when they will be achieved therefore no compensation expense was recognized during the year ended December 31, 2021.

During the year ended December 31, 2021, the Company terminated the services of one of its legal counsels who had an RSU agreement in place. Per the RSU agreement, all of the unvested RSU’s owed to the legal counsel vested immediately upon termination of services. This resulted in 325,000 shares of common stock being issued and $230,750 of stock-based compensation being recorded which was the fair value of the shares on the original grant date of the RSU agreement.

During the year ended December 31, 2021, the Company recorded the grant of 100,000 RSU’s to one of its legal counsels and 35,000 of the RSU’s vested. The vested RSU’s had a grant date fair value of $26,425 which was recorded as stock-based compensation expense.

As discussed in Note 3, Mr. Heaton was granted 500,000 RSU’s in December of 2020 and an additional 500,000 RSU’s in May of 2021. The vesting conditions are contingent upon the achievement of certain Company objectives and milestones. During the year ended December 31, 2021, certain objectives were achieved which resulted in the vesting of 200,000 of RSU’s granted to Mr. Heaton. The 200,000 RSU’s had a grant date fair value of $220,000 which was recorded as stock-based compensation expense.

Management is unable to determine if and when FDA approval of a PMA Class III will be awarded to the Company or when a change of control will occur, if at all, and as of December 31, 2021, there was a total of $27,017,200 unrecognized compensation cost related to the restricted stock unit awards.

Activity related to our restricted stock units during the year ended December 31, 2020 was as follows:

Number of Units Weighted AverageGrant Date Fair Value

Activity related to our restricted stock units during the year ended December 31, 2021 was as follows:

Number of Units Weighted AverageGrant Date Fair Value

Note 7. Litigation

A Complaint was filed with the United States District Court, Southern District of New York by Steven Safran as Plaintiff against the Company and Douglas Beplate, its CEO, as Defendant. This case was transferred to the United States District Court in Las Vegas, Nevada. Mr. Safran sought damages and monies allegedly owed pursuant to an employment agreement of approximately $734,000 and allegedly unpaid loans of $245,824 provided to Defendants. The Company denied the Plaintiff’s allegations. On July 21, 2021, Mr. Safran and the Defendants entered into a Settlement Agreement and General Release whereby the Company agreed to pay $250,000 in cash and issue 300,000 shares of common stock to Mr. Safran. The 300,000 shares have a fair market value of $312,000. As of December 31, 2021, the 300,000 shares of common stock have been issued and $250,000 in cash has been paid.

In March 2021, the Company received payment of $304,273 from Maxim Group LLC, representing the full settlement payment in accordance with a Settlement Agreement in a previously disclosed arbitration between the Company and Maxim that was reached in December 2019.

Philip Forman, who served as Chairman, a director, Chief Executive Officer and Chief Medical Advisor of the Company at various times between 2011 and October 2015, filed a lawsuit against the Company and our then-Chief Executive Officer, Douglas Beplate, in the United States District Court of the District of Nevada. The plaintiff has claimed, among other things: that the June 25, 2015 Amendment to his November 10, 2014 Employment Agreement with the Company, which terminated the Employment Agreement on October 1, 2015, is not enforceable due to lack of consideration; that a July 22, 2015 Stock Purchase Agreement pursuant to which the plaintiff sold Company shares issued to him under the Amendment to a third a party is unenforceable (despite the fact that all payment for the shares under the Stock Purchase Agreement was made); that the plaintiff’s 2014 Employment Agreement remains valid and that he is entitled to cash and stock compensation under that Employment Agreement (without giving regard to the Amendment); that if the Amendment is enforceable, he is entitled to the shares issued under the Amendment (without mention that those shares were sold to a third party under the Stock Purchase Agreement described above); and that the Company and Mr. Beplate defrauded the plaintiff relating to the foregoing. The plaintiff is seeking declaratory judgment regarding the parties’ relative rights under the Employment Agreement, the Amendment and the Stock Purchase Agreement; money damages of no less than $2,795,000; and punitive damages of $8,280,000. The Company filed a motion to dismiss the plaintiff’s claims which was denied on March 19, 2020. On May 5, 2021, the plaintiff provided a deposition as instructed by the Court, subsequent to which the Company filed a motion for dismissal of this proceeding. On February 14, 2022, the Court issued an Order which declared the Amendment to be unenforceable and thus the terms of the original Employment Agreement to remain in effect. The Order also noted that the Company is not a party to the Stock Purchase Agreement, and the Employment Agreement does not constitute a prior agreement that could have been superseded by the Stock Purchase Agreement. The parties are currently engaged in settlement discussions.

In 2018 an action was commenced in the United States District Court Southern District of New York entitled JEC Consulting Associates, LLC. Liquidator of Lead Dog Capital LP against United Health Products t/k/a United EcoEnergy Corp and Douglas K. Beplate under Docket Number 18-cv-1139 (ER). The third party action sought to remove a restrictive legend from a particular stock certificate for Three Million Fifty Thousand (3,050,000) shares and declare the shares to be free trading. The third party plaintiff alleges that the Company and Mr. Beplate refused to have the restrictive legend on the stock certificate removed under Rule 144 and sought compensatory and punitive damages. The Federal court issued an order that the Securities Exchange Commission should review the claim before the District Court renders a final ruling. Discovery appears to be substantially complete and settlement discussions between the third party plaintiff and the Company have been initiated.

Due to uncertainties inherent in litigation, we cannot predict the outcome of the above legal proceedings.

The Company has commenced the following legal proceedings:

On February 7, 2020, the Company filed the Original Petition for Fraud and Breach of Contract in the Texas District Court for the 215th Judicial District of Harris County against defendants Patterson Companies Inc., Patterson Management, L.P., Patterson Veterinary, Inc. and Patterson Logistics Services, Inc., and Animal Health International, Inc. On March 5, 2020, the defendants removed the case to U.S. District Court for Southern District of Texas. The defendants filed their answer in federal court on March 12, 2020. The original August 25, 2020 pretrial deadlines were extended. On January 18, 2022, the Company’s claims were dismissed, with prejudice, by the court. On February 9, 2022, the Company and Patterson reached an agreement on settlement of Patterson’s counterclaim. The Company agreed to pay $120,000 which has been accrued as of December 31, 2021.

The defendants filed a Motion for Summary Judgment which was denied by the court on March 11, 2021.

In August 2020, United Health Products filed suit against its former auditors, Haynie & Company, in Utah State Court, asserting claims related to professional negligence and breach of fiduciary duty. Haynie & Company has denied the allegations. Discovery is largely complete and the parties have each submitted a report by their respective expert witness to the Court.

Note 8. Income Tax

The Company accounts for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the years ended December 31, 2021 and 2020. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at December 31, 2021 or 2020.

The Company’s federal income tax returns for the years ended December 31, 2018 through December 31, 2021 remain subject to examination by the Internal Revenue Service as of December 31, 2021.

During 2021 and 2020, the Company incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved.

Net deferred tax assets consist of the following components as of December 31, 2021 and 2020

Deferred tax assets:

Accrued related party payroll (14,000 ) (6,200 )

Net deferred tax asset $ - $ -

Related party accrued payroll (14,000 ) (6,200 )

Property and equipment write-off 21,300 -

Income tax expense $ - $ -

As of December 31, 2021 and 2020, the Company has taxable net loss carryovers of approximately $20.0 and $17.8 million, respectively, that may be offset against future taxable income.

Note 9. Other Income

As described in Note 7 above, during the year ended December 31, 2021, the Company received payment of $304,273 from Maxim Group LLC, as full and final settlement of its previously disclosed arbitration between the Company and Maxim that was settled in December 2019. The $304,273 was recorded as other income in the Statement of Operations.

Note 10. Subsequent Events

The Company has evaluated events from December 31, 2021, through the date whereupon the financial statements were issued and has determined that there are no material events that need to be disclosed, except as follows:

The issued a total of 162,662 shares of common stock for the following:

The Company received a total of $165,000 in advances from its CEO and $20,000 from a former officer.

The Company entered into a $100,000 promissory note. The note accrues interest at 1% and requires monthly payments of $9,136 until the balance is paid in full.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company needs to implement disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports are recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure.

As of December 31, 2021, the Chief Executive Officer and Chief Financial Officer carried out an assessment, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). As of the date of this assessment, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2021.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the interim or annual financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

The Chief Executive Officer and Principal Financial Officer assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In performing its assessment of the effectiveness of the Company’s internal control over financial reporting, management applied the criteria described in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (‘‘COSO - 2013’’).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified during management’s assessment were the following:

• Inadequate corporate governance

• Inadequate internal control structure and control environment

• Lack of information technology controls

• Lack of segregation of duties

These material weaknesses could result in a material misstatement of significant accounts or disclosures that would result in a material misstatement to the Company’s interim or annual financial statements that would not be prevented or detected.

Because of the material weaknesses, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2021, based on the criteria in Internal Control-Integrated Framework issued by COSO -2013.

Changes in Internal Control over Financial Reporting

There were no reported changes in internal control over financial reporting for the year ended December 31, 2021.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officers

Our directors and executive officers as of the filing date of this Annual Report on Form 10-K are as follows:

Name Age Position with Company

Directors and Executive Officers

Brian Thom 56 Chief Executive Officer, and Director

Kristofer Heaton 43 Vice President of Finance and Principal Financial Officer

Robert Denser 50 Director

Our directors hold office for one-year terms and until their successors have been elected and qualified. Our officers are appointed annually and serve at the discretion of the Board.

Brian Thom was appointed as Chief Executive Officer effective December 1, 2020 and joined our Board as a Director on January 1, 2021. Mr. Thom has served as a consultant to the Company since April 2020 overseeing finance and business development activities and has served as external financial advisor to the Company since 2018. He brings over 20 years of corporate finance experience and a successful track record of helping fast growing companies across a broad range of industries to raise capital and create shareholder value. Over the course of his career he spent a decade with JPMorgan’s global Mergers and Acquisitions group and five years leading the Americas Corporate Finance group with Société Générale, a multi-national European investment bank, among other entrepreneurial pursuits.

Kristofer Heaton was brought on as the Vice President of Finance and Principal Financial Officer in December 2020. Mr. Heaton is a CPA designation and began his career in commercial banking with a bank in Salt Lake City in 2004. In 2006, he moved to public accounting and gained experience in various industries while working for various firms. Mr. Heaton founded his own accounting firm in 2015 which specializes in audits of public companies and has provided non-audit accounting and administrative services to the Company since 2017.

Robert J. Denser has served as a Director of the Company since November 2014. Over the past 10 years his main focus has been to assist federal and state agencies, first responders, EMS agencies and hospitals with their planning and procurement of the necessary medical equipment needed to be adequately prepared for any type of natural or man-made disaster. This includes working with the Medical Directors and their teams from the State of California and Los Angeles County with the development and fulfillment of a $60 million project that will give hospitals the caches of medical equipment needed to properly respond to the surge of patients that will result from a disaster. For the past five years Mr. Denser has been a member of ETL Response, LLC and has been in the role of Director of Sales and Finance. In this role he coordinates all ETL projects as needed. ETL Response. Mr. Denser’s background experience also includes direct access to key decision makers within the VA hospital system, as well as federal and private disaster response agencies, like FEMA and the Red Cross, that are on the front lines of any disaster.

Directors’ and Officers’ Liability Insurance

We are currently seeking to obtain directors’ and officers’ liability insurance against any liability for acts or omissions in their capacities as directors or officers, subject to certain exclusions. Such insurance also would insure us against losses which we may incur in indemnifying our officers and directors. In addition, we may enter into indemnification agreements with key officers and directors and such persons shall also have indemnification rights under applicable laws, and our certificate of incorporation and bylaws.

Corporate Governance

Our business, property and affairs are managed by, or under the direction of, our Board, in accordance with the General Corporation Law of the State of Nevada and our By-Laws. Members of the Board are kept informed of our business through discussions with the Chief Executive Officer and other key members of management, by reviewing materials provided to them by management.

We continue to review our corporate governance policies and practices by comparing our policies and practices with those suggested by various groups or authorities active in evaluating or setting best practices for corporate governance of public companies. Based on this review, we have adopted, and will continue to adopt, changes that the Board believes are the appropriate corporate governance policies and practices for our Company. We have adopted changes and will continue to adopt changes, as appropriate, to comply with the Sarbanes-Oxley Act of 2002 and subsequent rule changes made by the SEC and any applicable securities exchange.

Director Qualifications and Diversity

The Board seeks independent directors who represent a diversity of backgrounds and experiences that will enhance the quality of the board’s deliberations and decisions. Candidates shall have substantial experience with one or more publicly traded companies or shall have achieved a high level of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience in the medical device and health care industries.

In evaluating Director candidates, our Board also looks for certain personal attributes, such as integrity, ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role in corporate governance, availability for meetings and consultation on Company matters, and the willingness to assume and carry out fiduciary responsibilities. Qualified candidates for membership on the Board will be considered without regard to race, color, religion, sex, ancestry, national origin or disability.

Risk Oversight

Enterprise risks are identified and prioritized by management and each prioritized risk is assigned to the full board for oversight. These risks include, without limitation, the following:

Board Leadership Structure

In accordance with the Company’s By-Laws, the Chairman of the Board presides at all meetings of the Board. The position of Chairman of the Board of the Company was held by Douglas Beplate until his resignation as a director effective on February 28, 2022. Mr. Thom holds the position of Chief Executive Officer and currently is serving as Chairman [Pro Tem]. The Company has no fixed policy with respect to the separation of the offices of the Chairman of the Board and Chief Executive Officer.

Code of Ethics

We have adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the Exchange Act. This Code of Ethics applies to our directors and senior officers, such as the principal executive officer, principal financial officer and persons performing similar functions. Our Code of Ethics is available as Exhibit 14 to our Annual Report on Form 10-K filed April 16, 2010.

Committees

As of the filing date of this Form 10-K, the Board of Directors has no committees. Robert. Denser may be deemed an independent directors of the Company as that term is defined under the Exchange Act of 1934, as amended. Mr. Denser is not deemed to be a financial expert. The term “Financial Expert” is defined under the Sarbanes-Oxley Act of 2002, as amended, as a person who has the following attributes: an understanding of generally accepted accounting principles and financial statements; has the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the company’s financial statements, or experience actively supervising one or more persons engaged in such activities; an understanding of internal controls and procedures for financial reporting; and an understanding of audit committee functions.

Communications with the Board of Directors

Stockholders may communicate with the Board of Directors by sending a letter to United Health Products, Inc. Board of Directors, c/o our securities counsel, Ruskin Moscou Faltischek, PC, East Tower 15th Floor, 1425 RXR Plaza, Uniondale, New York 11556. Our securities counsel will receive the correspondence and forward it to the Chairman or to any individual director or directors to whom the communication is directed, unless the communication is unduly hostile, threatening or illegal, does not reasonably relate to the Company or its business, or is similarly inappropriate. The Chairman of the Board has the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications.

Medical Advisory Board

As the Company continues to pursue its FDA application to have HemoStyp approved for Class III surgical uses in the United States and abroad, it has formed a Medical Advisory Board which consists of the following persons as of the date of this filing:

Gerard Abate, MD Former Executive Director, Medical Affairs for Fortune 500 company Quest Diagnostics, where he directed 80+ Medical Affairs group that includes 8 clinical franchise medical directors, (oncology, genetics, women’s health, cardiovascular-metabolism, neurology, infectious disease/inflammation), HEOR team, publications group, MSLs, genetic counselors and project management.

Michael Erik Jessen MDProfessor and Chairman, and Frank M. Ryburn, Jr. Distinguished Chair in Cardiothoracic Surgery and Transplantation, Department of Cardiovascular and Thoracic Surgery, University of Texas Southwestern Medical Center.

Richard Massoth, DDS, MSD received his specialty training in Endodontics and his Master of Science in Dentistry from Boston University in 1982. He has been an Adjunct Professor at the UCLA School of Dentistry and has been in clinical practice for 36 years. Dr. Massoth has been a published author and a symposium speaker on “Endodontic Microsurgery” and “The Use of Cone Beam CT Scans in Endodontic Diagnosis.”

David Ramey, DVM brings thirty-five years of clinical experience as a full-time veterinarian, specializing in the care of performance and pleasure horses. He has written and published thirteen books, five book chapters, and over seventy papers in professional journals. Dr. Ramey is a frequent speaker on various veterinary topics at universities, conventions, and continuing education seminars around the United States, as well as Canada, Australia, and the UK.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the overall compensation earned over the fiscal years ended December 31, 2021 and 2020 by (1) each person who served as the principal executive officer of the Company during fiscal year 2021; (2) our most highly compensated (up to a maximum of two) executive officers as of December 31, 2021 with compensation during fiscal year ended 2021 of $100,000 or more; and (3) those individuals, if any, who would have otherwise been included in section (2) above but for the fact that they were not serving as an executive as of December 31, 2021.

_____________

For a description of the material terms of each named executive officers’ compensation arrangements, including the terms of any contract, agreement, plan or other arrangement that provides for any payment to a named executive officer in connection with his or her resignation, retirement or other termination, or a change in control of the company see section below entitled “Compensation Arrangements.”

No outstanding common share purchase option or other equity-based award granted to or held by any named executive officer were repriced or otherwise materially modified, including extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the bases upon which returns are determined, nor was there any waiver or modification of any specified performance target, goal or condition to payout, other than as described below.

Stock Awards – Restricted Stock Units

On July 21, 2020, the Board of Directors approved amendments to RSU Agreements put in place on March 25, 2019 (“2019 RSU Agreement”). The approved amendments increased the amount of RSU’s granted to Company’s former CEO Mr. Beplate from 33,000,000 to 33,800,000, increased the amount of RSU’s granted to the Company’s former COO Mr. Schiliro from 8,000,000 to 10,000,000, increased the amount of RSU’s granted to Mr. Heaton from 50,000 to 500,000, increased the amount of RSU’s granted to the office administrator, who is a person affiliated with the Company’s former CEO from 250,000 to 500,000 and increased the amount of RSU’s granted to the Technical Product Supervisor, who is the son of the former office administrator from 250,000 to 500,000.

The July 21 amendment also changed the vesting terms so that 15% of RSUs vested on July 15, 2020, an additional 15% of RSU units upon FDA approval of a PMA Class III awarded to the Company, an additional 20% of RSU units on January 1, 2021 and the balance of all unvested RSU units on the earliest date that (a) the Company achieves $20 million in gross cumulative sales commencing as of January 1, 2020, (b) a Covered Transaction is consummated or (c) a Trigger Event occurs. Each Grantee has the option to delay the Vesting Date of all or part of his RSUs until no later than an event described in (b) or (c) above, by serving written notice to the Company prior to such Vesting Date.

The change in vesting terms resulted in a total of 6,795,000 of the RSU’s vesting on July 15, 2020 with 5,070,00 being issued to Mr. Beplate, 1,500,000 being issued to Mr. Schiliro, 75,000 being issued to Mr. Heaton, 75,000 being issued to the former office administrator, who is a person affiliated with the Company’s former CEO and 75,000 being issued to the Technical Product Supervisor, who is the son of the former office administrator. The change in vesting terms also resulted in a total of 50,000 of the RSU’s vesting on July 20, 2020 with 50,000 being issued to the Marketing and Advertising Supervisor, who is the daughter of the former office administrator. The vesting of the 6,845,000 RSU’s resulted in stock-based compensation expense of $4,859,950 which was the fair value of the stock on the vesting date.

The former office administrator resigned during the year ended December 31, 2020 and forfeited 425,000 of the remaining unvested RSU’s with a value of $301,750 ($70,567 of which had been recognized and reversed).

In November 2020, the Company granted Mr. Thom 11,500,000 RSU’s which subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones.

In December 2020, the Company entered into a second restricted stock unit agreement with Mr. Heaton. The second agreement issued an additional 1,000,000 RSU’s, 500,000 of which were granted on the award date and 500,000 of which would be granted on May 15, 2021 provided his professional services agreement was in effect on that date. The 500,000 RSU’s were granted during 2021 per the agreement. The RSU’s, subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones.

During the year ended December 31, 2020, the Company issued a total of 125,000 shares of restricted common stock to Mr. Thom, prior to becoming Chief Executive Officer on December 1, 2020, for services rendered. The shares had a fair market value of $100,625.

Per the vesting schedules of certain of the Company’s amended RSU Agreements, on January 1, 2021, 6,760,000 shares of common stock were issued to Mr. Beplate, 2,000,000 shares of common stock were issued to Mr. Schiliro and 100,000 shares of common stock were issued to Mr. Heaton.

Compensation Agreements

Messrs. Thom and Heaton are being compensated at the monthly rate of $15,000 and $12,500 respectively, pursuant to services agreements entered with each of them. Mr. Schiliro was being compensated at the monthly rate of $15,000 pursuant to services agreement in his capacity as Chief Operating Officer until his resignation from that position effective on February 28, 2022. Mr. Schiliro remains in a non-officer position with the Company at the same rate of compensation.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table sets forth all outstanding equity awards held by our named executive officers as of December 31, 2021.

Option Awards Stock Awards

CEO

Former COO (2)

Kristofer Heaton, — — $ — —

_____________

DIRECTOR COMPENSATION

The following table sets forth certain information concerning the compensation paid to our directors not named as an executive officer in this Item 11 above for services rendered to us during the fiscal year ended December 31, 2021.

Name FeesEarned orPaid inCash($) StockAwards OptionAwards Total

Robert Denser $ — $ — $ — $ —

Cash Fees and Options

Currently the Company has no audit, compensation, corporate governance, nominating or other committee of the Board of Directors, although it intends to establish an audit, compensation and corporate governance committee in the future as part of the process to achieve a full exchange listing. No cash fees have been paid to board members for serving on the board.

Travel Expenses

All directors are entitled to be reimbursed for their reasonable out of pocket expenses associated with attending director and shareholder meetings in person.

Review of Risks Arising from Compensation Policies and Practices

We have reviewed our compensation policies and practices for all employees and concluded that any risks arising from our policies and practices are not reasonably likely to have a material adverse effect on the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

As of March 22, 2022, the Company had 228,829,891 shares of Common Stock outstanding. The only persons of record who presently hold or are known to own (or believed by the Company to own) beneficially more than 5% of the outstanding shares of such class of stock are listed below. The following table also sets forth certain information as to holdings of the Company’s Common Stock of all officers and directors individually, and all officers and directors as a group.

Name and Address of Beneficial Owner (1) Number of CommonShares Percentage

Officers and Directors

All directors and officers as a group (three persons) 3,393,212 1.5 %

5% Beneficial Owners:

___________

* Represents less than 1%

(2) Excludes 137,307 shares owned by his spouse.

Stock Bonuses

None during the fiscal years ending December 31, 2021 and 2020.

Securities Authorized for Issuance under Equity Compensation Plans.

On August 8, 2013, the Board of Directors approved the 2013 Employee Benefit and Consulting Services Compensation Plan (the “2013 Plan”) which had 15,000,000 shares that may be issued under said Plan. The 2013 Plan provides for the direct issuance of shares of common stock and the granting of non-statutory stock options on terms established by the Board of Directors or committee thereof. While the Plan provides for incentive stock options, no incentive stock options may be granted under the Plan since no stockholder approval was obtained on or before August 8, 2014. In September 2013, the Company issued 6,000,000 shares of stock under the 2013 Plan to the Company’s former CEO Douglas Beplate pursuant to his consulting agreement then in effect. No other shares or options have been granted under the 2013 Plan. There are currently 9,000,000 of shares available for issuance under this 2013 Plan.

On October 30, 2019, the Board of Directors approved the 2019 Employee Benefit and Consulting Services Compensation Plan (the “2019 Plan”) which has 2,000,000 shares that may be issued under said Plan. The 2019 Plan provides for the direct issuance of shares of common stock and the granting of non-statutory stock options or incentive stock options on terms established by the Board of Directors or committee thereof. The Plan has not been approved by the Company’s stockholders. The Company approved the issuance of 1,525,000 shares in November 2019 to certain persons who were then consultants, officers and directors. The Company has not issued any options under this 2019 Plan.

Separate from the 2013 Plan and 2019 Plan, the Board of Directors has approved individual Restricted Stock Unit Agreements with certain consultants, officers and directors (including now former officers and directors) which represent an unvested aggregate amount of 59,330,000 and 28,190,000 as of December 31, 2020 and 2021, respectively, which upon vesting will result in the issuance of common shares. These include RSUs issued to officers and directors (including now former officers and directors) as follows:

In March 2019, Mr. Beplate was granted 33,000,000 RSUs, Mr. Schiliro was granted 8,000,000 RSUs and Mr. Heaton was granted 50,000 RSUs. In July 2020, Mr. Beplate was granted an additional 800,000 RSUs, Mr. Schiliro was granted an additional 2,000,000 RSUs, Mr. Heaton was granted an additional 950,000 RSUs. In December 2020, Mr. Thom was granted 11,500,000 RSUs.

In July 2020, 15% of the RSU’s vested with 5,070,00 being issued to Mr. Beplate, 1,500,000 being issued to Mr. Schiliro and 75,000 being issued to Mr. Heaton.

On January 1, 2021, 20% of the RSU’s granted to Mr. Beplate which totaled 6,760,000 vested, 20% of the RSU’s granted to Mr. Schiliro which totaled 2,000,000 vested and 20% of the RSU’s granted to Mr. Heaton which totaled 100,000 vested.

In January 2021, the Board of Directors approved the second amendment to the Restricted Stock Unit Agreement between the Company and Douglas Beplate in conjunction with Mr. Beplate’s retirement from his day-to-day management role with the Company. The amendment accelerated the vesting and immediately settled his remaining Restricted Stock Units (“RSUs”) in a total of 28,730,000 restricted shares. Further, as a bonus in recognition of Mr. Beplate’s service to the Company and in recruitment of new executive management, the Company agreed to issue to Mr. Beplate an additional 2,000,000 million restricted shares of common stock.

In September 2021, 200,000 of the RSU’s granted to Mr. Heaton vested due to certain objectives being achieved.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related party convertible notes payables

As of December 31, 2021 and 2020, convertible notes payable – related parties totaled $0 and $456,032, respectively.

During the year ended December 31, 2020, Mr. Beplate loaned the Company $251,730 which was convertible into shares of Company common stock at $0.65/share. These loans resulted in a beneficial conversion feature of $83,156 which was recorded to interest expense – related party upon issuance. The Company made repayments to Mr. Beplate totaling $505,765, $87,750 was assigned to one of the Company’s legal counsel and $24,000 was forgiven during the year ended December 31, 2020, leaving a balance of $0 owed to Mr. Beplate as of December 31, 2020. These loans were made to pay for operating expenses of the Company, due on demand and carried no interest rate.

During the year ended December 31, 2020, Brian Thom, the Chief Executive Officer loaned the Company $450,000 and also converted $105,000 of accrued compensation into a convertible note. The note and loans were convertible at $0.50 per share at the discretion of the Mr. Thom, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The loans resulted in a beneficial conversion feature totaling $338,105 which was recorded as a debt discount. The debt discount was amortized through the maturity dates and $138,792 was amortized to interest expense – related party during the year ended December 31, 2020. As of December 31, 2020, the total outstanding balance of the note and loans was $555,000 and the remaining unamortized debt discount was $199,314.

During the year ended December 31, 2021, Mr. Thom converted $45,000 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Thom, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature of $45,000 which was recorded as a debt discount. The debt discount was amortized through the maturity date and a total of $244,314 for all of Mr. Thom’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $199,314 as of December 31, 2020 and the debt discount of $45,000 recorded during the current year. The remaining unamortized debt discount is $0.

The total outstanding principal balance of $600,000 which was related to $450,000 of loans to the Company and $150,000 of accrued compensation along with accrued interest of $10,135 was converted into 1,220,272 shares of common stock leaving $0 owed to Mr. Thom as of December 31, 2021.

During the year ended December 31, 2020, Louis Schiliro, the Company’s former Chief Operating Officer and director, loaned the Company $130,000 and also converted $150,000 of accrued compensation into a convertible note. The note and loans are convertible at $0.50 per share at the discretion of Mr. Schiliro, have a maturity date of March 31, 2021 and have an interest rate of 3%. During the year ended December 31, 2020, $110,000 of the convertible note payable along with $1,028 of accrued interest was assigned to one of the Company’s legal counsel leaving a total outstanding balance of the note and loans of $170,000. The loans and note resulted in a beneficial conversion feature totaling $174,985 which was recorded as a debt discount. The debt discount was amortized through the maturity dates and $105,331 was amortized to interest expense – related party during the year ended December 31, 2020.

During the year ended December 31, 2021, Mr. Schiliro converted $45,000 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Schiliro, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature of $45,000 which was recorded as a debt discount. The debt discount was amortized through the maturity date and a total of $114,654 for all of Mr. Schiliro’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $69,654 as of December 31, 2020 and the debt discount of $45,000 recorded during the current year. The remaining unamortized debt discount is $0.

During the year ended December 31, 2021, $175,000 of the convertible note payable along with $1,502 of accrued interest was assigned to one of the Company’s legal counsel leaving a total outstanding balance of $40,000. The remaining balance of $40,000 along with accrued interest was converted into 80,173 shares of common stock leaving $0 owed to Mr. Schiliro as of December 31, 2021.

During the year ended December 31, 2020, Kristofer Heaton, the Principal Financial Officer, converted $3,750 of accrued compensation into a convertible loan. The loan was convertible at $0.50 per share at the discretion of Mr. Heaton, had a maturity date of March 31, 2021 and carried an interest rate of 3%. This note resulted in a beneficial conversion feature totaling $3,750 which was recorded as a debt discount. The debt discount is being amortized through the maturity date and $0 was amortized to interest expense – related party during the year ended December 31, 2020.

During the year ended December 31, 2021, Mr. Heaton, converted $22,500 of accrued compensation into a convertible note. The note was convertible at $0.50 per share at the discretion of Mr. Heaton, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature totaling $22,500 which was recorded as a debt discount. The debt discount is being amortized through the maturity date and a total of $26,250 for all of Mr. Heaton’s notes was amortized to interest expense – related party during the year ended December 31, 2021, which included the unamortized debt discount of $3,750 as of December 31, 2020 and the debt discount of $22,500 recorded during the current period. The remaining unamortized debt discount is $0.

The total outstanding principal balance of $26,250 along with accrued interest was converted into 52,666 shares of common stock leaving $0 owed to Mr. Heaton as of December 31, 2021.

Interest expense – related party on the above convertible notes was $392,112 ($6,894 interest expense along with $385,218 of debt discount amortization) and $336,203 ($8,925 interest expense along with $327,278 of debt discount amortization) during the years ended December 31, 2021 and 2020, respectively. Accrued interest – related party due to these convertible notes was $2,308 and $7,503 as of December 31, 2021 and 2020, respectively.

Loans payable/Advances from related parties

During the year ended December 31, 2021, Mr. Schiliro advanced the Company $34,000 to pay for operating expenses and paid $30,000 of expenses on behalf of the Company.

During the year ended December 31, 2021, the Company issued 25,000 shares of common stock to settle $20,000 of the outstanding balance. The shares of common stock had a fair market value of $26,750 and the Company recorded a loss on debt settlement of $6,750.

As of December 31, 2021 and December 31, 2020, the balance owed to Mr. Schiliro was $44,000 and $0, respectively. These amounts were converted to a loan payable and have an interest rate of 10% and are due on December 31, 2022 and prepayable without penalty at the Company’s option with 10 days’ notice.

During the year ended December 31, 2021, Mr. Thom loaned the Company a total of $175,000 to pay for operating expenses. As of December 31, 2021, the amount of $175,000 is owed to Mr. Thom. The loans have an interest rate of 10% and are due on December 31, 2022 and prepayable without penalty at the Company’s option with 10 days’ notice.

Interest expense – related party on the above loans payable – related party was $2,308 during the year ended December 31, 2021 leaving an accrued interest – related party balance of $2,308.

Accrued liabilities

During the year ended December 31, 2020, $188,375 was paid to Mr. Beplate, $100,000 of accrued compensation was converted to a convertible note payable and then assigned to the Company’s legal counsel and $8,395 of accrued compensation was forgiven. The note was convertible at $0.50 per share at the discretion of the note holder, had a maturity date of March 31, 2021 and carried an interest rate of 3%. The note resulted in a beneficial conversion feature totaling $100,000 which was recognized into interest expense. As of December 31, 2021 and 2020, $0 and $0 was owed to Mr. Beplate, respectively.

As of December 31, 2021 and December 31, 2020, $0 and $74,056 was owed to Nate Knight, who was the Company’s Chief Financial Officer until November 2020, for accrued compensation and reimbursable expenses. During the year ended December 31, 2021, the Company issued 78,500 shares of common stock to settle the total balance owed of $74,056. The shares of common stock had a fair market value of $82,425 and the Company record a loss on debt settlement of $8,368.

As of December 31, 2021 and December 31, 2020, $899 and $0 was owed to Brian Thom, the Chief Executive Officer, for accrued compensation and reimbursable expenses. During the years ended December 2021 and 2020, $45,000 and $105,000 of compensation were converted into convertible loans as mentioned above. In the year ended December 31, 2021, $135,000 of accrued compensation was settled with the issuance of 270,000 shares of common stock. The stock had a fair market value of $221,400 which resulted in a $86,400 loss on settlement of debt (see Note 6).

As of December 31, 2021 and December 31, 2020, $0 and $59,467 was owed to Louis Schiliro, the former Chief Operating Officer, for accrued salary and reimbursable expenses, respectively. During the years ended December 31, 2021 and 2020, $45,000 and $150,000 of compensation were converted into a convertible loan as mentioned above and in the year ended December 31, 2020 $30,000 was paid in cash.

During the year ended December 31, 2021, the Company issued 74,335 shares of common stock to settle the total prior year balance owed of $59,467 and issued 270,000 shares of common stock to settle $135,000 of accrued compensation. The shares of common stock had a total fair market value of $300,938 and the Company recorded a loss on settlement of debt in the amount of $106,471 (see Note 6).

As of December 31, 2021 and December 31, 2020, $0 and $52,625 was owed to Mr. Heaton, for accrued compensation and services provided. During the years ended December 31, 2021 and 2020, $22,500 and $3,750 of compensation were converted into a convertible note as described above.

During the year ended December 31, 2021, 320,250 shares of common shares of stock were issued to settle $105,000 of accrued compensation and $52,625 of prior accruals. The shares of common stock had a total fair market value of $262,605 and the Company recorded a loss on settlement of debt in the amount of $104,980 (see Note 6).

Equity transactions

On July 21, 2020, the Board of Directors approved amendments to RSU Agreements put in place on March 25, 2019 (“2019 RSU Agreement”). The approved amendments increased the amount of RSU’s granted to Mr. Beplate from 33,000,000 to 33,800,000, increased the amount of RSU’s granted to Mr. Schiliro from 8,000,000 to 10,000,000, increased the amount of RSU’s granted to Mr. Heaton from 50,000 to 500,000, increased the amount of RSU’s granted to the office administrator, who is a person affiliated with the Company’s former CEO and Chairman from 250,000 to 500,000 and increased the amount of RSU’s granted to the Technical Product Supervisor, who is the son of the former office administrator from 250,000 to 500,000.

The July 21 amendment also changed the vesting terms so that 15% of RSUs vested on July 15, 2020, an additional 15% of RSU units upon FDA approval of a PMA Class III awarded to the Company, an additional 20% of RSU units on January 1, 2021 and the balance of all unvested RSU units on the earliest date that (a) the Company achieves $20 million in gross cumulative sales commencing as of January 1, 2020, (b) a Covered Transaction is consummated or (c) a Trigger Event occurs. Each Grantee has the option to delay the Vesting Date of all or part of his RSUs until no later than an event described in (b) or (c) above, by serving written notice to the Company prior to such Vesting Date.

The change in vesting terms resulted in a total of 6,795,000 of the RSU’s vesting on July 15, 2020 with 5,070,00 being issued to Mr. Beplate, 1,500,000 being issued to Mr. Schiliro, 75,000 being issued to Mr. Heaton, 75,000 being issued to the former office administrator, who is a person affiliated with the Company’s former CEO and 75,000 being issued to the Technical Product Supervisor, who is the son of the former office administrator. The change in vesting terms also resulted in a total of 50,000 of the RSU’s vesting on July 20, 2020 with 50,000 being issued to the Marketing and Advertising Supervisor, who is the daughter of the former office administrator. The vesting of the 6,845,000 RSU’s resulted in stock-based compensation expense of $4,859,950 which was the fair value of the stock on the vesting date.

The former office administrator resigned during the year ended December 31, 2020 and forfeited 425,000 of the remaining unvested RSU’s with a value of $301,750 ($70,567 of which had been recognized and reversed).

In November 2020, the Company granted Mr. Thom 11,500,000 RSU’s which, subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones.

In December 2020, the Company entered into a second restricted stock unit agreement with Mr. Heaton. The second agreement issued an additional 1,000,000 RSU’s, 500,000 of which were granted on the award date and 500,000 of which were granted on May 15, 2021. The RSU’s, subject to certain conditions, shall vest upon the achievement of certain Company objectives and milestones.

During the year ended December 31, 2020, the Company issued a total of 125,000 shares of restricted common stock to Mr. Thom, prior to becoming Chief Executive Officer, for services rendered. The shares had a fair market value of $100,625.

Per the vesting schedules of certain of the Company’s amended RSU Agreements, on January 1, 2021, 6,760,000 shares of common stock were issued to Mr. Beplate, 2,000,000 shares of common stock were issued to Mr. Schiliro and 100,000 shares of common stock were issued to Mr. Heaton.

On January 6, 2021, the Board of Directors approved the second amendment to the RSU Agreement between the Company and Mr. Beplate in conjunction with Mr. Beplate’s retirement from his day-to-day management role with the Company. The amendment accelerated the vesting and immediately settled his remaining RSU’s by issuing 21,970,000 shares of common stock. Further, as a bonus in recognition of Mr. Beplate’s service to the Company and in recruitment of new executive management, the Company issued to Mr. Beplate an additional 2,000,000 shares of common stock. The Company recorded $26,127,300 of stock-based compensation expense during the year ended December 31, 2021 related to the accelerated vesting of these RSU’s and issuance of common stock.

During the year ended December 31, 2021, 200,000 of Mr. Heaton’s RSU’s mentioned above vested due to achievement of certain Company objectives. The Company recorded stock-based compensation expense $220,000 related to the vesting of these RSU’s which was the grant date fair value.

During the year ended December 31, 2021, the Company issued 30,000 shares of common stock to Mr. Thom, 30,000 shares of common stock to Mr. Schiliro and 25,000 shares of common stock to Mr. Heaton for services rendered. The 85,000 shares of common stock had a total fair market value of $69,700.

Director Independence

Robert Denser is deemed by management to be an independent director of the Company as that term is defined under Section 10 of the Securities Exchange Act of 1934, as amended.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees for professional audit services rendered by MAC Accounting Group, LLP (“MAC”) for the audit of the Company’s annual financial statements for the fiscal year ended December 31, 2021 and 2020, and fees billed for other services provided by MAC in the fiscal year ended December 31, 2021 and 2020.

Audit-related fees $ - $ -

Tax fees $ - $ -

All other fees $ 8,250 $ -

_________

Audit Fees consist of the aggregate fees billed for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included in our Forms 10-Q and for any other services that were normally provided in connection with our statutory and regulatory filings or engagements.

Audit Related Fees consist of the aggregate fees billed for professional services rendered for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and were not otherwise included in Audit Fees.

Tax Fees consist of the aggregate fees billed for professional services rendered for tax compliance, tax advice and tax planning. Included in such Tax Fees are fees for preparation of our tax returns and consultancy and advice on other tax planning matters.

All Other Fees consist of the aggregate fees billed for products and services provided and not otherwise included in Audit Fees, Audit Related Fees or Tax Fees. Included in such Other Fees are fees for services rendered in connection with any private and public offerings or registration statements conducted during such periods.

Audit Committee Pre-Approval Policy

The Company does not have an audit committee. Audit committee functions are conducted by the Board of Directors. We understand the need for the accounting firm to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair their objectivity, our Board has restricted the non-audit services that they may provide to us.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(1) Financial Statements

(2) Financial Statement Schedules

Schedules have been omitted because of the absence of conditions under which they are required or because the required information is included in the financial statements or notes thereto.

(3) Exhibits

(a) Exhibits

The following exhibits are filed with this report, or incorporated by reference as noted:

3.1 Articles of Incorporation of the Company dated February 28, 1997. (1)

3.2 Amendment to Articles of Incorporation. (1)

3.3 By-laws of the Company. (2)

3.4 August 2015 Amendment to Articles of Incorporation. (3)

10.1 Services Agreement with Louis Schiliro (5)

10.2 Restricted Stock Unit Agreement – Louis Schiliro (7)

10.3 Restricted Stock Unit Agreement – Douglas Beplate (7)

10.4 Services Agreement with Brian Thom (8)

10.5 Restricted Stock Unit Agreement - Brian Thom (8)

10.6 Services Agreement with Kristofer Heaton (9)

10.7 Restricted Stock Unit Agreement - Kristofer Heaton (9)

21 Subsidiaries of the Registrant – none

31.1 Certification of Principal Executive Officer*

31.2 Certification of Principal Financial Officer*

32.1 Section 1350 Certificate by Principal Executive Officer*

32.2 Section 1350 Certificate by Principal Financial Officer*

99.1 2019 Employee Benefit and Consulting Services Compensation Plan (10)

101.SCH Document, XBRL Taxonomy Extension (*)

101.CAL Calculation Linkbase, XBRL Taxonomy Extension Definition (*)

101.DEF Linkbase, XBRL Taxonomy Extension Labels (*)

101.LAB Linkbase, XBRL Taxonomy Extension (*)

101.PRE Presentation Linkbase (*)

___________

* Filed herewith.

(4) Incorporated by reference to Form 8-K dated November 23, 2014.

(6) Incorporated by reference to the Form 8-K dated January 16, 2015.

(8) Incorporated by reference to the Form 8-K dated December 2, 2020

(9) Incorporated by reference to the Form 8-K dated January 11, 2021

(10) Incorporated by reference to Form S-8 dated October 31, 2019

SIGNATURES

Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNITED HEALTH PRODUCTS, INC.

Dated: April 1, 2022 By: /s/ Brian Thom

Brian Thom

Chief Executive Officer, Principal Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signatures Title Date

By: /s/ Brian Thom Chief Executive Officer, Principal April 1, 2022

Brian Thom Executive Officer and Director

By: /s/ Kristofer Heaton Principal Financial Officer April 1, 2022

Kristofer Heaton

By: /s/ Robert Denser Director April 1, 2022

Robert Denser