What changed in this filing

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Item 9A. Controls and Procedures

2023-03-23 compared with 2022-03-23 · 216 added, 478 removed, 642 unchanged (52% of the section changed)

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of December 31, 2021.

On the basis of that evaluation, management concluded that the Company’s disclosure controls and procedures are designed to be, and are, effective at providing reasonable assurance that the information required to be disclosed in reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including its Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

UNITED-GUARDIAN, INC.

(b) Management ’

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of December 31, 2022.

On the basis of that evaluation, management concluded that our disclosure controls and procedures are designed to be, and are, effective at providing reasonable assurance that the information required to be disclosed in reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

Management ’

s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

The Company’s internal control system is designed to provide reasonable assurance to management and to the Company’s Board of Directors regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of management, including the Company’s Principal Executive Officer and Principal Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013).

Based on management’s evaluation under the framework in Internal Control—Integrated Framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2021.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

Since the Company is a non-accelerated filer, management’s report is not subject to attestation by the Company's registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002.

Our internal control system is designed to provide reasonable assurance to management and to our Board of Directors regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO 2013”).

Based on management’s evaluation under the framework in Internal Control—Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Since we are a non-accelerated filer, management’s report is not subject to attestation by our registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002.

As a result, this Annual Report contains only management’s report on internal controls.

There were no changes in the Company’s internal control over financial reporting in the fourth quarter of 2021 that materially affected, or would be reasonably likely to materially affect, the Company’s internal control over financial reporting.

(d) Limitations of the Effectiveness of Internal Controls

The effectiveness of the Company’s system of disclosure controls and procedures and internal control over financial reporting is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating the control system, the assumptions used in identifying the likelihood of future events, and the inability to eliminate fraud and misconduct completely.

As a result, there can be no assurance that the Company’s disclosure controls and procedures and internal control over financial reporting will detect all errors or fraud.

However, the Company’s control systems have been designed to provide reasonable assurance of achieving their objectives, and the Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures and internal control over financial reporting are effective at the reasonable assurance level.

UNITED-GUARDIAN, INC.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting in the fourth quarter of 2022 that materially affected, or would be reasonably likely to materially affect, our internal control over financial reporting.

Limitations of the Effectiveness of Internal Controls

The effectiveness of our system of disclosure controls and procedures and internal control over financial reporting is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating the control system, the assumptions used in identifying the likelihood of future events, and the inability to eliminate fraud and misconduct completely.

As a result, there can be no assurance that our disclosure controls and procedures and internal control over financial reporting will detect all errors or fraud.

However, our control systems have been designed to provide reasonable assurance of achieving their objectives, and our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures and internal control over financial reporting are effective at the reasonable assurance level.

Other Information.

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Not applicable.

UNITED-GUARDIAN, INC.

Directors, Executive Officers and Corporate Governance.

EXECUTIVE OFFICERS

Set forth in the table immediately below are the names and ages of each of the executive officers of the Company and their principal occupations for at least the past five years.

Name and Position

with the Company

Biographical Information

   President

   Principal Executive Officer

   General Counsel

   Chairman of the Board

President and General Counsel of the Company from July 1988 to date;

Chairman of the Board and Principal Executive Officer since September 2009;

Chief Financial Officer of the Company from November 1997 to December 2006.

   Senior Vice President

   Production Manager

Senior Vice President of the Company from April 2020 to date;

Vice President of the Company from July 2002 to April 2020;

Production Manager of the Company since 1982.

   Principal Financial Officer

   Controller;

   Secretary

Secretary of the Company from April 2020 to date;

Treasurer and Principal Financial Officer of the Company from May 2018 to date;

Controller of the Company from September 2016 to date;

Human Resources Manager of the Company from May 2017 to date.

Donna Vigilante

   Vice President

   R&D Manager

Vice President of the Company since May 2020;

Research and Development Manager of the Company since September 2017;

Research and Development chemist from November 2015 until September 2017.

Six directors are to be elected at the next annual meeting of stockholders of the Company (which has not been scheduled as of the date of this Annual Report on Form 10-K).

Directors serve until the next annual meeting of stockholders and until their successors have been elected and qualified.

Set forth in the table below are the names of all persons who are currently directors of the Company, the principal occupation or employment of each such person for at least the past five years, his present position(s) with the Company, his qualifications to serve as a director, other board memberships of public companies, and the year he was first elected a director.

UNITED-GUARDIAN, INC.

Name and Position

with the Company

Principal Occupation, Qualifications, and other Boards

Year First Elected a Director

   President

   Chief Executive Officer

   General Counsel

   Chairman of the Board

President and General Counsel of the Company since July 1988;

Chief Financial Officer of the Company from November 1997 to December 2006;

and Chairman of the Board since September 2009.

He has leadership experience, legal experience from his prior years as an attorney in private practice, business experience, and knowledge of the Company’s operations from over 38 years as General Counsel, Vice President, and then President of the Company.

He holds a bachelor’s degree in Psychology and English from the State University of New York at Albany, and a Juris Doctor degree from the George Washington University Law School.

   Director

Partner in the accounting firm of PKF O'Connor Davies, LLP, New York, NY since January 1, 2021;

partner in the accounting firm of Bonamassa, Maietta & Cartelli, LLP, Brooklyn, NY, from 1991 through December 2020;

and Controller of the Company from October 1991 to November 1997.

He has financial experience, business experience, and an extensive knowledge of the Company’s operations.

He has been a CPA and consultant preparing financial reports and tax returns for the Company and other clients for more than 35 years.

He holds a bachelor’s degree in Business Administration from Niagara University, and an MBA from Hofstra University.

   Director

Counsel to the law firm of Duane Morris LLP, New York, NY since August 2007.

He has leadership experience, legal experience, business experience, and a scientific education and background.

From 1998 to 2007 he was partner and previously “Of Counsel” to the law firm of Reed Smith, LLP, New York, NY.

For more than 20 years prior, he was employed by GAF Corporation and its subsidiary, International Specialty Products, Inc., Wayne, NJ, including having been Vice President of corporate development and general management for the last 8 of those years.

He holds a bachelor’s degree in Engineering from Stevens Institute of Technology, and a Juris Doctor degree from St.

John’s University School of Law.

   Director

Independent business consultant since 2001.

He has leadership experience, business experience, and a scientific education and background.

For more than 25 years he was employed by Kline & Company, Inc., Parsippany, NJ, an international business consulting and market research firm specializing in the chemicals industry, consumer products, life sciences, and energy, including having been President from 1990 to 2001.

He holds a bachelor's degree in Chemistry from Hofstra University, and an MBA from Seton Hall University.

Ari Papoulias

   Director

Principal of ChemRise LLC, a business advisory firm providing technology, marketing, and financial advice to firms in the chemicals industry, since 2016;

from 2006 to 2015 Global Marketing Director for Momentive Performance Materials (formerly GE Advanced materials);

from 1987 to 2006 initially Business Manager of Advanced Materials, then Business Director of Industrial Markets, and then Global Marketing Director of Performance Chemicals for International Specialty Products, Inc., Wayne, NJ.

He has leadership experience, business and financial experience, and a scientific background and education.

He holds a B.Sc.

in Chemical Engineering from the University of Massachusetts, an M.Sc.

in Chemical Engineering from the University of Florida, a Ph.D.

in Chemical Engineering from Carnegie Mellon University, and an MBA in Finance from New York University.

(1) Member of Audit Committee

(2) Member of Compensation Committee

There are no family relationships between any director and/or officer of the Company.

The information required by this item is incorporated by reference to the section entitled “Directors and Executive Officers”

to be contained in the Company’s 2023 Proxy Statement.

CODE OF ETHICS

We have adopted a Code of Business Conduct and Ethics that applies to all of our officers, directors, and employees serving in any capacity, including the Chief Executive Officer and/or President, Chief Financial Officer, and Principal Accounting Officer.

A copy of our Code of Business Conduct and Ethics is available on our website at http://www.u-g.com/corporate.

If applicable, we intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision of our Code of Business Conduct and Ethics applicable to the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer by posting this information on our website.

UNITED-GUARDIAN, INC.

BOARD MEETINGS

During the fiscal year ended December 31, 2021, the Board held four regular meetings via Zoom videoconference, as well as several additional meetings.

All five directors participated in all of the regular meetings the additional directors’

meetings, and the Annual Meeting of Stockholders.

AUDIT COMMITTEE

The Company has an Audit Committee (“Committee”) that is currently composed of three of the Company’s independent directors, as well as an additional outside director that has expertise in both accounting and financial reporting, who acts as an advisor to the Committee.

We have an Audit Committee (“Committee”) that is currently composed of three independent members of our Board of Directors, as well as an additional outside director that has expertise in both accounting and financial reporting, who acts as an advisor to the Committee.

The members of the Committee are elected annually by the Board of Directors.

The Committee was established for the purpose of assisting the Board of Directors in fulfilling its oversight responsibilities, including (a) overseeing the Company’s accounting and financial reporting processes, including preparation of financial statements and audits;

(b) assuring the Company’s compliance with all legal, regulatory, and ethical responsibilities;

and (d) assessing the effectiveness of the Company’s internal controls and risk management procedures.

The Committee was established for the purpose of assisting the Board of Directors in fulfilling its oversight responsibilities, including (a) overseeing our accounting and financial reporting processes, including preparation of financial statements and audits;

(b) assuring compliance with all applicable legal, regulatory, and ethical responsibilities;

and (d) assessing the effectiveness of our internal controls and risk management procedures.

The Committee currently meets five times a year and is governed by a charter that was adopted in 2006 and updated in 2020.

In addition to assessing the independence of the Audit Committee members under NASDAQ rules, the Board also considered the requirements of Section 10A(m)(3) and Rule 10a-3 under the Exchange Act in regard to having a financial “expert”

on the Audit Committee.

Due to the significant expense involved in recruiting another Board member for the sole purpose of having a financial “expert”

on the Audit Committee, the Board instead determined that S.

Ari Papoulias was “financially sophisticated”

as that term is defined by NASDAQ, and that Lawrence F.

Maietta, a Certified Public Accountant and former member of the Audit Committee, while not considered independent for purposes of membership on the Audit Committee, would be considered a financial “expert”

and therefore could act as an advisor to the Audit Committee and provide the necessary financial expertise.

COMPENSATION COMMITTEE

The Board has a compensation committee which was formed in 1999 for the purpose of recommending to the Board the compensation of corporate officers and key employees for the ensuing year.

Members of the Compensation Committee are Messrs.

Maietta, Arthur M.

Dresner, and Andrew A.

Ken Globus acts as advisor to the Committee representing management.

The Committee held one meeting via Zoom videoconference in 2021.

The Compensation Committee does not have a charter.

Neither management nor the Committee has engaged a consultant to provide advice on compensation.

The Compensation Committee does not set compensation of directors.

Instead, the full Board acts on recommendations made by the independent directors.

In its review of compensation of directors, the Board considers various factors, such as compensation of directors in other public companies of a similar size, the time spent by Board and Committee members in their service to the Company, and recent changes that may result in an increase or decrease in the responsibilities or time commitment of a Board and Committee member.

NOMINATING COMMITTEE

The Board does not have a Nominating Committee.

The full Board fulfills the role of a nominating committee.

Final selections are made by a majority of the independent directors.

Ken Globus is not independent as that term is defined by the listing standards of NASDAQ.

It is the position of the Board that it is appropriate for the Company not to have a separate nominating committee because the size, composition and collective independence of the Board enables it to adequately fulfill the functions of a standing committee.

NASDAQ does not require the Company to have a separate nominating committee but does require that Board nominees be selected by either a nominating committee composed solely of independent directors or by a majority of the independent directors.

The Board has not considered diversity in identifying nominees for director positions, but intends to do so in the future.

UNITED-GUARDIAN, INC.

ROLE OF THE BOARD IN RISK OVERSIGHT

The Board views risk management as a process designed to identify, manage, and control risks that may adversely affect the Company, so that they are appropriate considering the Company's size, operations and business objectives.

The Company's risk management policies enable the Company to manage risk within acceptable limits and provide reasonable assurance of optimum corporate performance in the area of risk/return.

The Board has ultimate responsibility for oversight of the Company's risk management processes, and discharges this responsibility through regular reports received from, and discussions with, senior management on all areas of material risk exposure to the Company.

These reports and discussions include, among other things, operational, financial, legal and regulatory, and strategic risks.

The full Board engages with the appropriate members of senior management to enable its members to understand and provide input to, and oversight of, risk identification, risk management and risk mitigation strategies.

In addition, the Company's Audit Committee is responsible for evaluating and monitoring financial risks, and meets regularly in executive session without management present to, among other things, discuss the Company's risk management culture and processes.

While the Board oversees the Company’s risk management, the Company’s senior management is responsible for day-to-day risk management processes.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD

The Board has adopted the following procedure for stockholders to send communications to the Board other than stockholder proposals for consideration at the annual meeting of stockholders which should be submitted to our Corporate Secretary.

Stockholders who wish to send communications to directors should refer to the Company’s website at:

www.u-g.com and direct those communications to Mr.

Dresner, Chairman of the Audit Committee, whose email address is posted there.

All communications sent to Mr.

Dresner, but addressed to other Board members, will be forwarded to that Board member by Mr.

CODE OF ETHICS

The Company has adopted a Code of Business Conduct and Ethics that applies to all officers, directors, and employees serving in any capacity to the Company, including the Chief Executive Officer and/or President, Chief Financial Officer, and Principal Accounting Officer.

A copy of the Company's Code of Business Conduct and Ethics is available on the Company's website at http://www.u-g.com/corporate.

The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision of its Code of Business Conduct and Ethics applicable to the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer by posting this information on the Company's website.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

None of the Company’s officers, directors, or control persons have been involved in any legal proceedings as described in Item 401(f) of Regulation S-K.

UNITED-GUARDIAN, INC.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires the Company's officers, directors and persons who own more than 10% of a class of the Company's equity securities to file reports of beneficial ownership and changes in beneficial ownership with the SEC.

Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based on (i) a review of copies of Forms 3, 4, and 5 and any amendments thereto furnished to the Company during and with respect to the fiscal year ended December 31, 2021 and (ii) any written representations signed by reporting persons that no Form 5 is required, the Company believes that all persons subject to the reporting requirements pursuant to Section 16(a) filed the required reports on a timely basis during and with respect to the fiscal year ended December 31, 2021.

Executive Compensation.

EXECUTIVE COMPENSATION

The following table sets forth for the years ended December 31, 2021 and December 31, 2020 certain information concerning the compensation paid to the Company's executive officers:

Name and position

Stock awards ($)

Option awards ($)

Non-equity incentive plan compen-sation

Non-qualified deferred compen-sation earnings

All other compen-sation (1)

   President

   Chief Executive Officer

   Chairman of the Board

Donna Vigilante

   Vice President

   R&D Manager

   Director of Technical

   Services

  Chief Financial Officer

   Controller, Treasurer,

   Secretary

   Senior Vice President

   Production Manager

In both 2021 and 2020 under the Company’s 401(k) plan for all its employees, the Company made a contribution of up to 4% of each employee’s salary, matching an employee’s elective deferral of up to 4% of salary.

In addition, in 2009 the Company began making a discretionary contribution to all employees’ 401(k) accounts based on a formula that qualifies the 401(k) plan under Internal Revenue Service (“IRS”) Safe Harbor provisions.

These amounts represent the Company's contribution for each year.

There are no other items included in these amounts.

2021 DIRECTOR COMPENSATION

The following table sets forth for the fiscal year ended December 31, 2021 certain information concerning the compensation paid to directors of the Company who are not “named executive officers”

(as such term is defined in Item 402(m)(2) of Regulation S-K):

UNITED-GUARDIAN, INC.

Fees earned or paid in

Option awards ($)

Non-Equity incentive

Nonqualified deferred compensation earnings

Ari Papoulias

Consulting fee paid to of PKF O'Connor Davies, LLP, New York, NY, of which Lawrence F.

Maietta is a partner, for work performed by Mr.

Maietta in connection with his review of the Company’s quarterly and annual financial statements and corporate tax returns.

The information required by this item is incorporated by reference to the section entitled “Directors and Executive Officers”

to be contained in the Company’s 2023 Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth the shares of the Company's Common Stock, par value $.10 per share (the only class of stock issued and outstanding), owned beneficially by each person who, as of March 1, 2022, is known by the Company to have owned beneficially more than 5% of the outstanding Common Stock.

Regarding the shares referenced in footnote (1) below, the beneficial owner has both sole voting power and sole investment power, except for those shares held by his spouse as noted.

Name and Address of

Beneficial Owner

c/o United-Guardian, Inc.

230 Marcus Blvd., Hauppauge, NY 11788

1,318,053  (1)

Betsee Parker

Box 2198, Middleburg, VA 20118

Renaissance Technologies LLC

800 Third Avenue, New York, NY 10022

One Corporate Center, Rye, NY 10580

279,027 shares held directly in his own name, and another 1,039,026 shares held beneficially as follows:

760,000 shares as joint Trustee of the Alfred Globus Testamentary Trust, as to which he has sole voting rights and shared investment power, and 279,026 shares held by his wife.

As of March 8, 2022, based on information provided to the Company by a representative of Dr.

Betsee Parker.

Based on Schedule 13G/A filed by Renaissance Technologies LLC with the SEC on February 11, 2022

As of March 3, 2022, based on information provided to the Company by Gabelli.

Of this total, 38,000 shares are owned by Gabelli Funds, LLC;

70,511 shares by Teton Advisors, Inc.;

and 148,300 shares by GAMCO Asset Management Inc.

and GAMCO Investors, Inc.

Some of the shares of Common Stock beneficially owned by Mr.

Gabelli are also beneficially owned by certain of the other related entities.

However, none of such entities individually reported beneficial ownership of shares constituting more than 5% of the outstanding shares of Common Stock of the Company.

UNITED-GUARDIAN, INC.

SECURITY OWNERSHIP OF MANAGEMENT

The following information is furnished with respect to ownership of shares of Common Stock as of March 1, 2022, by each named executive officer, each director (which includes all nominees for director) and by all directors and executive officers of the Company as a group (8 persons).

Except as otherwise indicated, the beneficial owner has sole voting and investment power.

Name of Beneficial Owner

Amount and Nature of

Beneficial Ownership

Ari Papoulias

Donna Vigilante

     All Officers and directors as a group (8 persons)

279,027 shares held directly in his own name, and another 1,039,026 shares held beneficially as follows:

760,000 shares as joint Trustee of the Alfred Globus Testamentary Trust, as to which he has sole voting rights and shared investment power, and 279,026 shares held by his wife.

Less than one percent (1%)

The information required by this item is incorporated by reference to the section entitled “Directors and Executive Officers”

to be contained in the Company’s 2023 Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence.

RELATED PARTY TRANSACTIONS

The Company has adopted a written policy for the approval of "related party" transactions.

Under the policy, related parties are defined to include executive officers and directors of the Company and their immediate family members, a stockholder owning in excess of 5% of the Company, and entities in which any of the foregoing have a substantial ownership interest or control.

The policy applies to any transactions that exceed or are expected to exceed $50,000 in a single calendar year.

The policy provides that the Audit Committee will review transactions subject to the policy and decide whether or not to approve or ratify those transactions.

In doing so, the Audit Committee will make a determination as to whether the transaction is in the best interests of the Company and its stockholders, taking into account (a) the benefits to the Company and its stockholders;

(b) the extent of the related person’s interest in the transaction;

(c) whether the transaction is on terms generally available to an unaffiliated third-party under the same or similar circumstances;

(d) the impact or potential impact on a director’s independence in the event the related party is a director, an immediate family member of a director, or an entity in which a director is a partner, shareholder or executive officer;

and (e) the terms of each transaction.

The policy also provides that director and officer compensation that is approved by the Board or the Compensation Committee is exempt from this approval process and will be considered to be pre-approved.

The Related Party Transaction Policy can be found on the Company's web site at www.u-g.com.

There were no related party transactions during the fiscal year ended December 31, 2021.

UNITED-GUARDIAN, INC.

The information required by this item is incorporated by reference to the section entitled “Directors and Executive Officers”

to be contained in the Company’s 2023 Proxy Statement.

Principal Accounting Fees and Services.

The aggregate fees that have been billed by Baker Tilly US, LLP (“Baker Tilly”), the Company’s principal accountants since March 25, 2019, for the quarterly reviews of the Company’s financial statements for the first, second and third quarters of 2020 and the audit of the Company’s financial statements for the 2020 fiscal year were $89,500.

The aggregate fees that have been, or are expected to be, billed by Baker Tilly for the quarterly reviews of the Company’s financial statements for the first, second and third quarters of 2021 and the audit of the Company’s financial statements for the 2021 fiscal year are $90,500.

The aggregate fees that have been billed by Baker Tilly US, LLP (“Baker Tilly”), our principal accountants, for the quarterly reviews of our financial statements for the first, second and third quarters of 2021 and the audit of our financial statements for the 2021 fiscal year were $90,500.

The aggregate fees that have been, or are expected to be, billed by Baker Tilly for the quarterly reviews of our financial statements for the first, second and third quarters of 2022 and the audit of our financial statements for the 2022 fiscal year are $97,000.

Audit-Related Fees

During 2021, there were no fees paid to Baker Tilly in connection with the Company's compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

No other fees were billed by Baker Tilly for the last two fiscal years that were reasonably related to the performance of the audit or review of the Company's financial statements and not reported under "Audit Fees" above.

During 2022, there were no fees paid to Baker Tilly in connection with our compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

No other fees were billed by Baker Tilly for the last two fiscal years that were reasonably related to the performance of the audit or review of our financial statements and not reported under "Audit Fees" above.

UNITED-GUARDIAN, INC.

There were no fees billed by Baker Tilly during the last two fiscal years for professional services rendered for tax compliance, tax advice, or tax planning.

1 unchanged sentence

All Other Fees

There were no other non-audit-related fees billed to the Company by Baker Tilly in 2021 or 2020.

Pre-Approval Policies and Procedures

Engagement of accounting services by the Company is not made pursuant to any pre-approval policies and procedures.

Rather, the Company believes that its accounting firm is independent because all of its engagements by the Company are approved by the Company's Audit Committee prior to any such engagement.

The Audit Committee meets periodically to review and approve the scope of the services to be provided to the Company by its Independent Registered Public Accounting Firm, as well as to review and discuss any issues that may arise during an engagement.

The Committee is responsible for the prior approval of every engagement of the Company's Independent Registered Public Accounting Firm to perform audit and permissible non-audit services for the Company, such as quarterly financial reviews, tax matters, and consultation on new accounting and disclosure standards.

Before the auditors are engaged to provide those services, the President and the Chief Financial Officer will make a recommendation to the Committee regarding each of the services to be performed, including the fees to be charged for such services.

At the request of the Committee, the Independent Registered Public Accounting Firm and/or management shall periodically report to the Committee regarding the extent of services being provided by the Independent Registered Public Accounting Firm, and the fees for the services performed to date.

UNITED-GUARDIAN, INC.

There were no other non-audit-related fees billed by Baker Tilly in 2022 or 2021.

Item 15. 

Exhibits, Financial Statement Schedules.

   Documents filed as part of this report.

Financial Statements - see Item 8.

4 unchanged sentences

Notes to Financial Statements.

   Exhibits

   The exhibits listed on the accompanying Exhibit Index are filed as part of this Annual Report.

Form 10-K Summary.

The exhibits listed on the accompanying Exhibit Index are filed as part of this Annual Report.

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

UNITED-GUARDIAN, INC.

/s/ Ken Globus

March 16, 2022

March 16, 2023  

/s/ Beatriz Blanco

Beatriz Blanco   

President and Director

UNITED-GUARDIAN, INC.

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.

/s/ Ken Globus

       Ken Globus

/s/ Beatriz Blanco

President (Principal Executive Officer);

General Counsel;

Chairman of the Board of Directors

March 16, 2023

Beatriz Blanco

/s/ Andrea J.

       Andrea J.

Chief Financial Officer (Controller, Principal Financial Officer, and Principal Accounting Officer);

Chief Financial Officer (Controller, Principal Financial Officer,

March 16, 2023

and Principal Accounting Officer);

/s/ Lawrence F.

1 unchanged sentence

March 16, 2023

        Lawrence F.

/s/ Arthur M.

1 unchanged sentence

March 16, 2023

       Arthur M.

Dresner  

/s/ Andrew A.

1 unchanged sentence

March 16, 2023

        Andrew A.

Boccone  

Ari Papoulias

1 unchanged sentence

March 16, 2023

Ari Papoulias

/s/ Ken Globus

Chairman of the Board of Directors

March 16, 2023

UNITED-GUARDIAN, INC.

EXHIBIT INDEX

2 unchanged sentences

(Delaware) as filed with the Secretary of State of the State of Delaware on September 10, 1987.

Incorporated by reference to Exhibit 3(b) of the Registrant's Annual Report on Form 10-K for the fiscal year ended February 29, 1988 (the "1988 10-K").  

(a)  

Certificate of Incorporation of the Company as filed April 22, 1987.

Incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K, dated September 21, 1987 (the "1987 8-K").

(b)     

By-laws of the Company.

Incorporated by reference to Exhibit 4.2 to the 1987 8-K.

Specimen Certificate for shares of Common Stock of the Company.

Incorporated by reference to Exhibit 4(a) to the 1988 10-K.

(a)  

Qualified Retirement Income Plan for Employees of the Company, as restated April 1, 1976.

Incorporated by reference to Exhibit 11(c) of the Registrant's Registration Statement on Form S-1 (Registration No.

(Incorporated by reference to Exhibit 3(b) of the Registrant's Annual Report on Form 10-K for the fiscal year ended February 29, 1988)

Certificate of Incorporation of the Company as filed April 22, 1987 (Incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K, dated September 21, 1987)

By-laws of the Company (Incorporated by reference to Exhibit 4.2 of the Registrant's Current Report on Form 8-K, dated September 21, 1987)

Specimen Certificate for shares of Common Stock of the Company (Incorporated by reference to Exhibit 4(a) of the Registrant's Annual Report on Form 10-K for the fiscal year ended February 29, 1988)

Qualified Retirement Income Plan for Employees of the Company, as restated April 1, 1976 (Incorporated by reference to Exhibit 11(c) of the Registrant's Registration Statement on Form S-1 (Registration No.

2-63114) declared effective February 9, 1979)

Indicates a paper filing

UNITED-GUARDIAN, INC.

Exclusive Distributor Agreement between the Company and ISP Technologies Inc. dated July 5, 2000.

Incorporated by reference to Exhibit 10(d) of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.

Exclusive Distributor Agreement between the Company and ISP Technologies Inc.

dated July 5, 2000 (Incorporated by reference to Exhibit 10(d) of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000)

Letter Amendment between the Company and ISP Technologies Inc.

dated December 16, 2002 amending the Exclusive Distributor Agreement between the Registrant and ISP Technologies Inc.

dated July 5, 2000.

Incorporated by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2002.

dated July 5, 2000 (Incorporated by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2002)

Letter Amendment between the Company and ISP Technologies Inc.

dated December 20, 2005 amending the Exclusive Distributor Agreement between the Registrant and ISP Technologies Inc.

dated July 5, 2000 and amended on December 31, 2002.

Incorporated by reference to Exhibit 10(d) of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.

dated July 5, 2000 and amended on December 31, 2002 (Incorporated by reference to Exhibit 10(d) of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005)

Letter Amendment between the Company and ISP Technologies Inc.

dated May 5, 2010 amending the Exclusive Distributor Agreement between the Company and ISP Technologies Inc.

dated July 5, 2000 and amended on December 16, 2002 and December 20, 2005.

Incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2010.

dated July 5, 2000 and amended on December 16, 2002 and December 20, 2005 (Incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2010)

Manufacturing and Supply Agreement between the Company and Smiths Medical ASD, Inc.

signed November 12, 2013 and effective as of November 1, 2013.

Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K dated and filed November 18, 2013.

Code of Ethics and amendments thereto.

Incorporated by reference to Exhibit 14 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

Subsidiaries of the Company:

Certification of Ken Globus, President and Principal Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Andrea J.

Young, Principal Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of Ken Globus, President and Principal Executive Officer of the Company, and Andrea J.

Young, Principal Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

signed November 12, 2013 and effective as of November 1, 2013 (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K dated and filed November 18, 2013)

Employment agreement between Beatriz Blanco and the Company dated October 10, 2022 (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 10-Q for the fiscal quarter ended September 30, 2022)

UNITED-GUARDIAN, INC.

Memorandum of Understanding (separation agreement) between Ken Globus and the Company effective November 1, 2022 (Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 10-Q for the fiscal quarter ended September 30, 2022)

Code of Ethics and amendments thereto (Incorporated by reference to Exhibit 14 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2019)

Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002

Joint certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002

Inline XBRL Instance Document –

4 unchanged sentences

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Inline XBRL Taxonomy Extension Label Presentation Document

Cover Page Interactive Data File (Embedded within the inline XBRL document and included in Exhibit 101.1).

* Filed herewith.

** Management contract or compensatory arrangement.

*** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and otherwise is not subject to liability under these sections.

UNITED-GUARDIAN, INC.

INDEX TO FINANCIAL STATEMENTS

(For the years ended

December 31, 2021 and 2020)

(For the years ended December 31, 2022 and 2021)

Report of Baker Tilly U.S.

LLP, Independent Registered Public Accounting Firm (PCAOB ID 23 )

F-1  & F-2

Financial Statements  

Statements of Income

Balance Sheets

F-4  & F-5

Statements of Stockholders' Equity

Statements of Cash Flows

Notes to Financial Statements

F-8  - F-21

Notes to Financial Statements   

UNITED-GUARDIAN, INC.

REPORT OF INDEPENDENT REGISTERED

10 unchanged sentences

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

UNITED-GUARDIAN, INC.

We conducted our audits in accordance with the standards of the PCAOB.

18 unchanged sentences

Years ended December 31,

$ 13,929,629  

$ 10,986,081  

Costs and expenses:

Cost of sales

5,747,931  

4,872,335  

Operating expenses

2,035,970  

2,026,368  

Research and development

478,642  

451,208  

Total costs and expenses

8,262,543  

7,349,911  

Income from operations

5,667,086  

3,636,170  

Other income:

Other (loss) income:

Investment income

233,857  

226,245  

Net (loss) gain on marketable securities

( 23,018 )  

298,585  

Total other income

210,839  

524,830  

Net loss on marketable securities

Total other (loss) income

Income before provision for income taxes

5,877,925  

4,161,000  

Provision for income taxes

1,219,383  

856,022  

$ 4,658,542  

$ 3,304,978  

Earnings per common share (basic and diluted)

$ 1.01  

$ 0.72  

Weighted average shares (basic and diluted)

4,594,319  

See Notes to Financial Statements

22 unchanged sentences

11,583,390  

Deferred income taxes, net

110,544  

Property, plant, and equipment:

41 unchanged sentences

83,222  

151,684  

Commitments and contingencies

20 unchanged sentences

Amount  

Retained earnings

Balance, January 1, 2021

18 unchanged sentences

Dividends declared and paid ($ 0.68 per share)

( 5,190,033 )  

( 3,123,492 )

Balance, December 31, 2022

10 unchanged sentences

Depreciation and amortization

Gain on sale of asset

Net loss (gain) on marketable securities

Loss (gain) on sale of asset

Net loss on marketable securities

Allowance for doubtful accounts

Reserve for inventory obsolescence

Deferred income taxes

(Increase) decrease in operating assets:

Decrease (increase) in operating assets:

Accounts receivable

1 unchanged sentence

Prepaid income taxes

Increase (decrease) in operating liabilities:

(Decrease) increase in operating liabilities:

Accounts payable

2 unchanged sentences

Income taxes payable

Dividends payable

Net cash provided by operating activities

1 unchanged sentence

Acquisitions of property, plant and equipment

Proceeds from sale of asset

Purchases of marketable securities

Proceeds from sales of marketable securities

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

1 unchanged sentence

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

7 unchanged sentences

NOTES TO FINANCIAL STATEMENTS

NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT 

ACCOUNTING POLICIES

Nature of Business

7 unchanged sentences

Lubrajel accounted for approximately 59 % and 64 % of the Company’s sales for the years ended December 31, 2022 and December 31, 2021, respectively, and Renacidin accounted for approximately 33 % and 29 % of the Company’s sales for the years ended December 31, 2022 and December 31, 2021, respectively.

Impact of the Coronavirus Pandemic

While the coronavirus pandemic (“pandemic”) continues to impact certain areas of the Company’s operations, the substantial impact the pandemic had on Company sales in 2020 significantly lessened in 2021.

While the Company believes that sales of its cosmetic ingredients are still being negatively impacted, the sales situation has improved substantially, and the current impact is coming more from increased shipping costs and higher raw material costs, which may have some future impact on the Company’s profit margins in upcoming quarters.

It has also been more difficult to ship the Company’s products due to a shortage of truck drivers and trucks, which has meant some delays on having orders picked up, even though the Company’s products are available to ship.

The shortage of truck drivers and trucks is expected to continue in 2022.

The Company is minimizing the impact on customers by making them aware of the longer lead times that may be needed due to the trucking issue.

Sales of the Company’s non-pharmaceutical medical products (“medical products”) had also been negatively impacted by the pandemic in 2020, but those impacts lessened as well in 2021.

Sales of the Company’s pharmaceutical products were not impacted by the pandemic in 2020 or in 2021.

The pandemic has not significantly affected the ability of the Company to obtain raw materials, but it has made some of those materials more expensive, which could impact the Company’s gross profit margins in the future.

The Company has been able to maintain production throughout the pandemic.

There continues to be uncertainty in regard to the future impact of the pandemic on the Company’s operations or financial results.

While the impact on the Company’s’

sales lessened considerably in 2021, the Company is still unable to provide an accurate estimate or projection as to what the future impact of the pandemic will be on the Company’s future operations or financial results.

The Company does not expect the carrying value of its assets or its liquidity to be impaired by the coronavirus pandemic.

UNITED-GUARDIAN, INC.

Impact of the Coronavirus Pandemic, Global Supply Chain Instability and Inflation

While the coronavirus pandemic continues to impact certain areas of the Company’s operations, the current impact on the Company’s financial performance is coming primarily from 1 ) higher raw material costs and increased shipping costs, which had an impact on the Company’s gross profit margins during 2022 and 2 ) a decrease in cosmetic ingredient sales in China due to China’s zero -COVID mandate that was in effect for a substantial part of 2022.

The pandemic did not affect the Company’s ability to obtain raw materials but due to supply chain instability, the Company experienced longer lead times and higher prices for many of its raw materials.

The increased raw material prices had an impact on the Company’s gross profit margins in 2022 and may continue to have an impact on gross profit margins in upcoming quarters.

In response to the rising raw material prices the Company has instituted price increases on many of its products, which will help to reduce the impact on the Company’s gross margins in the future.

As a result of the lingering effects of the coronavirus pandemic as described above, combined with global supply chain instability, there continues to be uncertainty in regard to its future potential impact on the Company’s operations or financial results.

The Company believes that it is still unable to provide an accurate estimate or projection as to what the future impact of the pandemic will be on its future operations or financial results.

While it is unknown whether inflation will continue to increase or will begin to decrease during 2023, continued inflation is likely to result in further increases in raw material costs, shipping costs, and internal labor costs, which could impact the Company’s results of operations.

Use of Estimates

2 unchanged sentences

Such estimated items include the allowance for bad debts, reserve for inventory obsolescence, accrued distribution fees, outdated material returns, possible impairment of marketable securities and the allocation of overhead.

UNITED-GUARDIAN, INC.

Accounts Receivable and Reserves

8 unchanged sentences

These deductions are recorded in the same period in which the revenue is recognized.

Such deductions, primarily related to the sale of the Company’s pharmaceutical products, include chargebacks from the United States Department of Veterans Affairs (‘VA”), rebates in connection with the Company’s current participation in Medicare programs and its past participation in Medicaid programs, distribution fees, discounts, and outdated product returns.

Such deductions, primarily related to the sale of the Company’s pharmaceutical products, include chargebacks from the United States Department of Veterans Affairs (“VA”), rebates in connection with the Company’s current participation in Medicare programs, distribution fees, discounts, and outdated product returns.

These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on sales for a reporting period.

During 2022 and 2021, the Company participated in various government drug rebate programs related to the sale of Renacidin®, its most important pharmaceutical product.

These programs include the Veterans Affairs Federal Supply Schedule (FSS), and the Medicare Part D Coverage Gap Discount Program (CGDP).

These programs include the Veterans Affairs Federal Supply Schedule (“FSS”), and the Medicare Part D Coverage Gap Discount Program (“CGDP”).

These programs require the Company to sell its product at a discounted price.

In addition, during 2020, the Company also participated in the Medicaid Drug Rebate Program (MDRP), which required the Company to pay a significant rebate to the various states where Renacidin was provided to Medicaid patients, as well as the Section 340B Drug Pricing Program ( 340B ), which required the Company to sell their product at a deeply discounted price.

Due to the overly burdensome nature of the Medicaid rebates, and the deeply discounted pricing associated with the 340B Program, the Company terminated its participation in the MDRP and the 340B Programs, effective December 31, 2020.

The Company’s sales, as reported, are net of these rebates, some of which are estimated and are recorded in the same period that the revenue is recognized.

UNITED-GUARDIAN, INC.

As a result of the overly burdensome nature of the Medicaid rebates, the Company concluded in October 2020 that it was no longer profitable for the Company to continue participating in the Medicaid or the 340B programs.

As a result, on October 30, 2020, the Company informed the Centers for Medicare & Medicaid Services (CMS) and the Health Resources and Services Administration (HRSA) of its intention to terminate its Medicaid Drug Rebate Agreement and its 340B Drug Pricing Agreement, effective as of December 31, 2020.

The Company will, however, continue to participate in the other government discount and rebate programs, specifically the Veterans Affairs FSS Program and the Medicare Part D Coverage Gap Program (CGDP).

As long as a valid purchase order has been received and future collection of the sale amount is reasonably assured, the Company recognizes revenue from sales of its products when those products are shipped, which is when the Company’s performance obligation is satisfied.

10 unchanged sentences

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

UNITED-GUARDIAN, INC.

Any allowances for returns are taken as a reduction of sales within the same period the revenue is recognized.

1 unchanged sentence

At December 31, 2022 and 2021, the Company had an allowance of $ 369,154 and $ 313,904 , respectively, for possible outdated material returns, which is included in accrued expenses.

The Company has not experienced significant fluctuations between estimated allowances and actual activity.

The timing between recognition of revenue for product sales and the receipt of payment is not significant.

3 unchanged sentences

however, due to the uncertainty of the customers taking the discounts, the discounts are recorded when they are taken.

At December 31, 2021, the Company recorded an advance payment from one of its customers in the amount of $ 190,164 , which is included within the deferred revenue on the balance sheet.

The related performance obligation associated with this payment had not been satisfied as of the balance sheet date and is expected to be fulfilled within the first two quarters of 2022.

At December 31, 2021, the Company recorded an advance payment from one of its customers in the amount of $ 190,164 , which was recorded as deferred revenue on the balance sheet.

The related performance obligation associated with this payment was satisfied in the first quarter of 2022.

No such advanced payment exists at December 31, 2022.

The Company has distribution agreements with certain distributors of its pharmaceutical products that entitles those distributors to distribution and services-related fees.

The Company records distribution fees, and estimates of distribution fees, as offsets to revenue.

UNITED-GUARDIAN, INC.

Disaggregated net sales by product class is as follows:

Disaggregated net sales by product class are as follows:

Years ended December 31,

5 unchanged sentences

4,735,324  

Medical products

Medical lubricants

2,470,163  

6 unchanged sentences

$ 13,929,629  

The Company’s cosmetic ingredients are currently marketed worldwide by five marketing partners, of which United States (“U.S.”)-based ASI purchases the largest volume.

For the years ended December 31, 2021 and 2020, approximately 20 % of the Company’s sales were to (a) its foreign-based marketing partners (which does not include ASI), which marketed and distributed the Company’s cosmetic ingredients to customers outside the U.S, and (b) a few foreign customers for the Company’s medical products.

The Company’s cosmetic ingredients are currently marketed worldwide by five distributors, of which the United States (“U.S.”)-based ASI purchases the largest volume.

For the years ended December 31, 2022 and 2021, approximately 25 % and 20 %, respectively, of the Company’s sales were to (a) its foreign-based distributors (which does not include ASI), which marketed and distributed the Company’s cosmetic ingredients to customers outside the U.S, and (b) a few foreign customers for the Company’s medical lubricants sold directly by the Company.

Disaggregated sales by geographic region are as follows:

Years ended December 31,

United States*

9 unchanged sentences

A certain percentage of those products are subsequently shipped by ASI to its foreign customers.

Based on sales information provided to the Company by ASI, 74 % of ASI’s sales in 2021 were to customers in foreign countries, compared to 68 % in 2020.

Based on sales information provided to the Company by ASI, 66 % of ASI’s sales in 2022 were to customers in foreign countries, compared with 74 % in 2021.

ASI’s largest foreign market in both 2022 and 2021 was China, which accounted for approximately 38 % of ASI’s sales in 2022 and 42 % of sales in 2021.

UNITED-GUARDIAN, INC.

Cash and Cash Equivalents

6 unchanged sentences

In 2022, the Company declared a total of $ 3,124,137 in dividends, of which $ 3,123,492 was paid.

The balance of $ 1,547 is payable to stockholders whose old Guardian shares have not yet been exchanged to United-Guardian, Inc.

The balance of $ 645 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc.

shares and are pending escheatment.

UNITED-GUARDIAN, INC.

On May 20, 2020, the Company’s Board of Directors declared a semi-annual cash dividend of $ 0.42 per share, which was paid on June 17, 2020 to all stockholders of record as of June 3, 2020.

On November 18, 2020, the Company’s Board of Directors declared a semi-annual cash dividend of $ 0.36 per share which was paid on December 8, 2020, to all stockholders of record as of December 1, 2020.

On May 18, 2021, the Company’s Board of Directors declared a semi-annual cash dividend of $ 0.48 per share, which was paid on June 7, 2021 to all stockholders of record as of May 31, 2021.

On November 16, 2021, the Company’s Board of Directors declared a semi-annual cash dividend of $ 0.65 per share which was paid on December 7, 2021 to all stockholders of record as of November 29, 2021.

In 2021, the Company declared a total of $ 5,191,580 in dividends, of which $ 5,190,033 was paid.

The balance of $ 1,138 is payable to stockholders whose old Guardian shares have not yet been exchanged to United-Guardian, Inc.

The balance of $ 1,547 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc.

shares and are pending escheatment.

9 unchanged sentences

Inventory costs include material, labor and factory overhead.

UNITED-GUARDIAN, INC.

Property, Plant and Equipment

6 unchanged sentences

Estimated useful lives are as follows: 

Factory equipment and fixtures (years)

Building (years)

Factory equipment and fixtures  

5 - 7 years  

           Building

40 years  

Building improvements  

Lesser of useful life or 20 years

UNITED-GUARDIAN, INC.

Impairment of Long-Lived Assets

12 unchanged sentences

As a result of its monitoring of the outstanding credit allowed for each customer, as well as the fact that the majority of the Company’s sales are to customers whose satisfactory credit and payment record has been established over a long period of time, the Company believes that its accounts receivable credit risk has been reduced.

For the year ended December 31, 2021, four of the Company’s distributors and marketing partners accounted for approximately 75 % of the Company’s gross sales during the year and approximately 80 % of its outstanding accounts receivable at December 31, 2021.

For the year ended December 31, 2020, the same four distributors and marketing partners accounted for a total of approximately 72 % of the Company’s gross sales during the year and 67 % of its outstanding accounts receivable at December 31, 2020.

For the year ended December 31, 2022, four of the Company’s pharmaceutical wholesalers and cosmetic ingredient distributors accounted for approximately 72 % of the Company’s gross sales during the year and approximately 81 % of its outstanding accounts receivable at December 31, 2022.

For the year ended December 31, 2021, the same four pharmaceutical wholesalers and cosmetic ingredient distributors accounted for a total of approximately 75 % of the Company’s gross sales during the year and 80 % of its outstanding accounts receivable at December 31, 2021.

UNITED-GUARDIAN, INC.

Vendor Concentration

1 unchanged sentence

However, there are some raw materials used by the Company that are not readily available or require long lead times.

The Company experienced a temporary supply issue related to one of its raw materials that was caused by a temporary disruption at the vendor’s manufacturing facility.

As a result, the Company located and is in the process of qualifying a second vendor for that material.

The company does not expect this issue to impact manufacturing of the product in which this raw material is used.

The Company has, however, experienced longer lead times due to shipping delays related to the pandemic.

During 2022, the Company periodically experienced longer lead times due to shipping delays and supply chain issues related to the pandemic.

The Company has six major raw material vendors that collectively accounted for approximately 90 % and 94 % of the raw material purchases by the Company in 2022 and 2021, respectively.

UNITED-GUARDIAN, INC.

Income taxes are accounted for under the asset and liability method.

17 unchanged sentences

For the years ended December 31, 2022 and 2021, the Company incurred approximately $ 19,000 and $ 31,000 , respectively, in advertising expense, which primarily relates to the internet marketing of Renacidin, one of the Company’s pharmaceutical products.

UNITED-GUARDIAN, INC.

Earnings Per Share Information

2 unchanged sentences

New Accounting Standards

On January 1, 2021, the Company adopted Accounting Standards Update (ASU) 2019 - 12, “Simplifying the Accounting for Income Taxes.”

This standard modified ASU 740 and simplifies the accounting for income taxes.

The Company determined that these modifications did not have an impact on its financial statements.

UNITED-GUARDIAN, INC.

In June 2016, the FASB issued ASU- 2016 - 13 “Financial Instruments –

3 unchanged sentences

It is effective for fiscal years beginning after December 15, 2022.

The Company is currently evaluating if this pronouncement will have a potential impact on its financial statements.

NOTE B - MARKETABLE SECURITIES

The Company does not expect that the implementation of this standard will have a material effect on its’

financial statements.

NOTE B –

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include currency on hand, demand deposits with banks or financial institutions, and short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present minimal risk of changes in value because of changes in interest rates.

The following table summarizes the Company’s cash and cash equivalents:

Years ended December 31,  

Demand Deposits

$ 333,275  

$ 531,213  

Treasury Bills (original 2-month maturity)

497,177  

Total cash and cash equivalents

$ 830,452  

$ 531,213  

NOTE C - MARKETABLE SECURITIES

Marketable securities include investments in fixed income and equity mutual funds with maturities greater than 3 months, which are reported at their fair values.

The disaggregated net gains and losses on the marketable securities recognized in the income statement for the years ended December 31, 2022 and 2021 are as follows:

Years ended December 31,  

Net (loss) gain recognized during the year on marketable securities

Years ended December 31,   

Net losses recognized during the year on marketable securities

$ ( 1,046,245 )

Net losses (gains) realized during the year on marketable securities sold during the period

364,074  

Net gains realized during the year on marketable securities sold during the period

Net unrealized loss recognized during the reporting year on marketable securities still held at the reporting date

1 unchanged sentence

$ ( 134,935 )

UNITED-GUARDIAN, INC.

The fair values of the Company’s marketable securities are determined in accordance with US GAAP, with fair value being defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

7 unchanged sentences

The following tables summarize the Company’s investments:

UNITED-GUARDIAN, INC.

December 31, 2022

Unrealized  

Fair Value  

(Loss)Gain  

Equity Securities

2 unchanged sentences

$ 4,924,497  

$ 58,913  

$ ( 524,730 )

Equity and other mutual funds

3 unchanged sentences

Total equity securities

Total marketable securities

6,166,392  

5,653,516  

Total marketable securities

$ 6,166,392  

$ 5,653,516  

$ ( 512,876 )

December 31, 2021

Unrealized  

 Cost  

Fair Value  

16 unchanged sentences

$ 169,295  

Investment income is recognized when earned and consists principally of dividend income from equity and fixed income mutual funds.

Investment income is recognized when earned and consists principally of dividend income from equity and fixed income mutual funds and interest income on United States Treasury Bills.

Realized gains and losses on sales of investments are determined on a specific identification basis.

Proceeds from the sale and redemption of marketable securities amounted to $ 4,152,660 for the year ended December 31, 2021, which included realized gains of $ 111,917 .

Proceeds from the sale and redemption of marketable securities amounted to $ 2,867,671 for the year ended December 31, 2022, which included realized losses of $ 364,074 .

Proceeds from the sale and redemption of marketable securities for the year ended December 31, 2021 amounted to $ 4,152,660 , which included realized gains of $ 111,917 .

NOTE C –

UNITED-GUARDIAN, INC.

NOTE D –

INVENTORIES  

14 unchanged sentences

Cost is determined using the average cost method, which approximates cost determined by the first -in, first -out method.

Finished product inventories at December 31, 2021 and December 31, 2020 are net of a reserve of $ 35,000 .

As of the date of this report, the COVID- 19 pandemic has not adversely affected the valuation of the Company’s finished products, work in process or raw material inventories.

UNITED-GUARDIAN, INC.

NOTE D –

Finished product inventories at December 31, 2022 and December 31, 2021 are net of a reserve of $ 64,000 and $ 35,000 , respectively.

NOTE E –

The provision for income taxes consists of the following:

9 unchanged sentences

$ 1,219,383  

The following is a reconciliation of the Company’s effective income tax rate to the Federal statutory rate (dollar amounts have been rounded to the nearest thousand):

The following is a reconciliation of the Company’s effective income tax rate to the Federal statutory rate:         

Years ended December 31,

2 unchanged sentences

$ 1,234,364  

State taxes, net of federal benefit

Research & development credits

( 0.3 )  

Non-taxable dividends

( 0.2 )  

( 0.1 )  

Provision for income taxes

1 unchanged sentence

$ 1,219,383  

UNITED-GUARDIAN, INC.

The tax effects of temporary differences which comprise the deferred tax assets and liabilities are as follows:

December 31, .

Deferred tax assets

2 unchanged sentences

$ 4,253  

13,440  

Accounts payable

86,288  

92,756  

Unrealized loss on marketable securities

107,704  

Accrued expenses

10 unchanged sentences

Total deferred tax liabilities

Net deferred tax liability

$ ( 151,684 )

UNITED-GUARDIAN, INC.

NOTE E - BENEFIT PLANS

Net deferred tax asset (liability)

$ 110,544  

NOTE F - BENEFIT PLANS

Defined Contribution Plan

3 unchanged sentences

The Company also makes discretionary contributions to each employee's account based on a "pay-to-pay" safe-harbor formula that qualifies the 401 (k) Plan under current IRS regulations.

For the years ended December 31, 2021 and 2020, the Company’s Board of Directors authorized discretionary contributions in the amount of $ 109,000 and $ 130,000 , respectively, to be allocated among all eligible employees.

For the years ended December 31, 2022 and 2021, respectively, the Company’s Board of Directors authorized discretionary contributions in the amount of $ 109,000 to be allocated among all eligible employees.

Employees become vested in the discretionary contributions as follows:

20 % after two years of employment, and 20 % for each year of employment thereafter until the employee becomes fully vested after six years of employment.

The discretionary contribution for 2021 will be paid in January 2022 and is included in accrued expenses at December 31, 2021.

NOTE F - GEOGRAPHIC and OTHER INFORMATION

The discretionary contribution for 2022 will be paid in February 2023.

The amount paid in February 2023 has been reduced by an amount paid to Ken Globus upon his retirement from the Company during 2022.

The remaining contribution payable is included in accrued expenses at December 31, 2022.

NOTE G - GEOGRAPHIC and OTHER INFORMATION

Through its Guardian Laboratories division, the Company conducts research, product development, manufacturing, and marketing of cosmetic ingredients, personal and health care products, pharmaceuticals, non-pharmaceutical medical products, and proprietary specialty industrial products.

3 unchanged sentences

Many of the cosmetic ingredients manufactured by the Company, particularly its Lubrajel line of water-based moisturizing and lubricating gels, are currently used by many of the major multinational personal care products companies.

UNITED-GUARDIAN, INC.

The Company operates in one business segment.

The Company’s products are separated into four distinct product categories:

cosmetic ingredients, pharmaceuticals, medical products, and industrial products.

cosmetic ingredients, pharmaceuticals, medical lubricants, and industrial products.

Each product category is marketed differently.

The cosmetic ingredients are marketed through a global network of marketing partners and distributors.

These marketing partners purchase product outright from the Company and provide the marketing functions for these products on behalf of the Company.

The cosmetic ingredients are marketed through a global network of distributors.

These distributors purchase product outright from the Company and provide the marketing functions for these products on behalf of the Company.

They in turn receive their compensation for those efforts by re-selling those products at a markup to their customers.

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The current marketing period with ASI ends on December 31, 2023.

The Company’s other marketing partners are not under any contractual obligation to market the Company’s cosmetic ingredients, and the Company has the ability to cancel those marketing arrangements at any time upon reasonable notice.

The Company’s other distributors are not under any contractual obligation to market the Company’s cosmetic ingredients, and the Company has the ability to cancel those marketing arrangements at any time upon reasonable notice.

All sales of the Company’s cosmetic ingredients are final other than product later determined to be defective, and the Company does not make any sales on consignment.

UNITED-GUARDIAN, INC.

No prior regulatory approval is needed by the Company to sell any products other than its pharmaceutical products.

The end users of its products may or may not need regulatory approvals, depending on the intended claims and uses of those products.

The pharmaceutical products are two urological products that are sold to end users primarily through distribution agreements with the major drug wholesalers.

The pharmaceutical products include a urological product and a topical bioticide that are sold to end users primarily through distribution agreements with the major drug wholesalers.

For these products, the Company does the marketing, and the drug wholesalers supply the product to the end users, such as hospitals and pharmacies.

The Company’s marketing effort for Renacidin, its most important drug product, centers around a separate Renacidin website, along with internet advertising using Google ads.

The Company’s marketing effort for Renacidin, its most important drug product, centers around a separate Renacidin website.

There is currently no active marketing effort for Clorpactin.

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Clorpactin pre-dated the need for a formal New Drug Application (“NDA”), and the current sterile liquid form of Renacidin is marketed under an NDA that was approved by the FDA in 1990.

The medical products are not pharmaceutical products.

The medical lubricants are not pharmaceutical products.

They consist primarily of water-based lubricating gels, which are marketed by the Company directly to manufacturers that incorporate them into urologic catheters and other medical devices and products that they sell.

These products are distinguished from the pharmaceutical products in that, unlike the pharmaceutical products, the Company is not required to obtain regulatory approval prior to marketing them.

Approvals are the responsibility of the company that markets the products in which the Company’s products are used, which are typically classified as medical devices.

Approvals are the responsibility of the companies that market the products in which the Company’s products are used, which are typically classified as medical devices.

However, the Company is responsible for manufacturing these products in accordance with current Good Manufacturing Practices for medical devices, and its manufacturing facility is subject to regular FDA oversight.

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However, the manufacturers of the finished products may have to obtain such regulatory approvals before marketing these products.

The Company plans on discontinuing the sales of its industrial products in the second quarter of 2023.

The following tables present the significant concentrations of the Company’s sales.

Although a significant percentage of Customer A’s purchases from the Company are sold to foreign customers, in table “b”

below all sales to Customer A are included in “United States”

below all sales to Customer A are included in “The United States”

sales revenue because all shipments to Customer A are delivered to Customer A's warehouses in the U.S.

In addition, there are four customers for the Company’s medical products that take delivery of their shipments in the U.S.

UNITED-GUARDIAN, INC.

In addition, there are four customers for the Company’s medical lubricants that take delivery of their shipments in the U.S.

but potentially ship some of that product to manufacturing facilities outside the U.S.

Since the Company makes those shipments to U.S.

locations, sales to those customers are also included in the “United States”

locations, sales to those customers are also included in the “The United States”

revenue number in the table below.

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5,748,244  

Medical Products

Medical Lubricants

2,471,555  

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$ 13,929,629  

UNITED-GUARDIAN, INC.

Geographic Information

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$ 14,947,167  

NOTE G - ACCRUED EXPENSES

NOTE H - ACCRUED EXPENSES

Accrued expenses at December 31, 2022 and 2021 consist of:

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94,326  

109,000  

Annual report expenses

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61,500  

Reserve for outdated material

Reserve for outdated material returns

369,154  

8 unchanged sentences

$ 1,627,390  

NOTE H - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES

As of December 31, 2021, the Company had a number of unconverted Guardian shares that would convert to approximately 1,369 shares of United-Guardian, Inc.

UNITED-GUARDIAN, INC.

NOTE I - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND 

NON-CASH INVESTING AND FINANCING ACTIVITIES

As of December 31, 2022, the Company had a number of unconverted Guardian Chemical shares that would convert to approximately 447 shares of United-Guardian, Inc.

common stock if all of the remaining holders of those Guardian shares converted their Guardian stock to United-Guardian stock.

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The Company is currently accruing dividends on the 447 shares that have not yet been exchanged or designated for escheatment as of December 31, 2022, and the Company will continue to do so as dividends are declared.

During the third quarter of 2020, the Company paid approximately $ 124,041 to its transfer agent, which represented accrued dividends on unconverted Guardian shares.

This payment was made to facilitate the conversion of those shares to United-Guardian, Inc.

shares, and the subsequent escheatment of those shares to the appropriate state jurisdictions.

UNITED-GUARDIAN, INC.

NOTE I - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2021, the Company paid PKF O’Connor Davies $ 19,500 for accounting and tax services.

During the year ended December 31, 2020, the Company paid Bonamassa, Maietta, and Cartelli, LLP (now part of PKF O’Connor Davies), $ 16,250 for accounting and tax services.

NOTE J - RELATED PARTY TRANSACTIONS

During the years ended December 31, 2022 and 2021, the Company paid PKF O’Connor Davies $ 14,500 and $ 19,500 , respectively, for accounting and tax services.

Lawrence Maietta, a partner at PKF O’Connor Davies, is a director of the Company.

NOTE J –

SUBSEQUENT EVENTS

On January 25, 2022, the Company announced that its Board of Directors had launched a formal review process to explore strategic alternatives.

The purpose of the review is to ensure that value is being maximized for shareholders, and that the Company has sufficient scale and financial resources to take advantage of potential growth opportunities available.

These alternatives could include, among others, an outright sale of the Company, possible joint ventures, strategic partnerships or alliances, or other possible transactions.

In furtherance of this goal, the Company retained Capstone Partners, a Denver- and Boston-based financial advisory and investment banking company to assist it with this endeavor.

The Company paid a non-refundable fee of $ 75,000 to Capstone in connection with the work they would be performing on behalf of the Company.

The Company also retained the Denver-based law firm of Brownstein Hyatt Farber Schreck, LLP to assist with the legal aspects of any possible transactions that might result from the efforts of Capstone.

For the year ended December 31, 2022, the Company paid Ken Globus, the Company’s previous President and CEO, $ 20,000 for consulting services subsequent to his departure from the Company.

The Company’s consulting agreement with Ken Globus expires on May 31, 2023.

Ken Globus is a director of the Company and currently serves as Chairman of the Board of Directors.

In addition, in November 2022, Ken Globus purchased a used vehicle from the Company for $ 37,039 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures