Company Overview

UHP develops, manufactures, and markets a patented hemostatic gauze product called CelluSTAT® for the healthcare and wound care sectors. CelluSTAT is designed to absorb drainage from wounds and help control bleeding. The company is currently seeking regulatory approval from the FDA to sell its hemostatic gauze in the U.S. surgical market.

Regulatory Developments

UHP submitted a Premarket Approval (PMA) application to the FDA in March 2024 for its CelluSTAT Hemostatic Gauze products. In June 2024, the FDA responded with a list of about 40 comments and requests for more information. UHP submitted a plan to address the FDA’s concerns in August 2024.

In October 2024, UHP met virtually with the FDA to discuss its plan. UHP presented data from a 2019 clinical trial showing that CelluSTAT performed better than the standard treatment in stopping bleeding. However, the FDA requested more data to confirm the safety and effectiveness of CelluSTAT in certain surgical procedures.

To address this, UHP proposed a new 27-patient study on the use of CelluSTAT in surgeries involving internal organs. The FDA’s review of UHP’s PMA application is currently on hold while UHP conducts this additional study. There is no guarantee the PMA will ultimately be approved.

CelluSTAT Gauze Products

CelluSTAT is a natural hemostatic material made from chemically treated cotton cellulose. It is registered with the FDA for use in superficial wounds and has been shown to be effective at controlling bleeding without damaging surrounding tissue. When applied to a wound, CelluSTAT expands slightly and turns into a gel that helps stop bleeding.

Potential Target Markets

If UHP receives FDA approval for the surgical use of CelluSTAT, its potential customer base could include hospitals, surgery centers, first responders, dialysis centers, dental offices, and veterinary hospitals. However, the company has paused commercial activities to focus on the PMA application.

Primary Strategy

UHP’s main goal is to obtain FDA approval to sell CelluSTAT in the lucrative Class III surgical market, where there is less competition for approved hemostatic products. The company believes CelluSTAT could gain significant market share in this space based on its testing and clinical trial results.

In anticipation of potential FDA approval, UHP is evaluating options to rapidly grow revenue and profits, including a sale or merger with an industry leader or commercial partnerships with established companies. The company has been in talks with several medical technology firms about potential collaborations.

Manufacturing and Packaging

UHP’s CelluSTAT products are manufactured to the company’s specifications by an FDA-certified contract manufacturer. The gauze is then cut to size, packaged, and sterilized in the United States.

Patents and Trademarks

UHP’s hemostatic gauze technology is protected by patents that expire in 2029. The company also holds trademarks and trademark applications for various CelluSTAT-related product names.

Financial Results

For the three months ended March 31, 2025, UHP reported $0 in revenue, the same as the prior year period. This is due to the company’s focus on the PMA application rather than commercial activities.

Operating expenses increased significantly to $1.49 million in Q1 2025, up from $425,094 in Q1 2024. This was primarily driven by a $1.12 million increase in stock-based compensation. Other expenses also rose due to higher interest costs.

As a result, UHP’s net loss widened to $1.53 million in the first quarter of 2025, compared to a $452,000 loss a year earlier.

Financial Condition and Liquidity

As of March 31, 2025, UHP had a negative working capital position of $1.77 million and its auditor has expressed substantial doubt about the company’s ability to continue as a going concern.

UHP has been funding its operations through private stock sales and loans from related parties as it focuses resources on the PMA application. In 2024, the company entered into a $10 million common stock purchase agreement with an investor, of which it has received $3.2 million so far.

However, the company may need to raise additional capital through equity or debt financing, which could be dilutive to shareholders. Rising interest rates and increased borrowing levels also pose a risk.

Cash Flows

UHP used $274,000 in cash for operating activities in Q1 2025, down from $406,000 a year earlier. This was due to the net loss, partially offset by non-cash stock-based compensation and changes in working capital.

The company did not have any investing activities in the first quarters of 2025 or 2024. Financing activities provided $110,000 in Q1 2025 from convertible note proceeds and a related party advance, compared to $391,000 a year earlier from stock sales.

Overall, UHP’s cash balance declined from $169,000 at the end of 2024 to just $4,900 as of March 31, 2025, highlighting its need for additional funding.

Analysis and Outlook

UHP’s financial results reflect the challenges it faces as a pre-revenue, development-stage company focused on regulatory approval rather than commercialization. The significant increase in operating expenses, particularly stock-based compensation, has weighed heavily on the bottom line.

The company’s liquidity position is also a major concern, with a negative working capital balance and dwindling cash reserves. Continued reliance on dilutive financing raises questions about UHP’s long-term viability as an independent entity.

The key to UHP’s future success will be securing FDA approval for its CelluSTAT product in the lucrative surgical market. The additional clinical trial requested by the FDA adds time and cost, but positive results could pave the way for PMA approval and open up significant commercial opportunities.

However, there are no guarantees the PMA will be granted, and even if approved, UHP may need to partner with or sell to a larger medical device company to effectively commercialize and distribute CelluSTAT. The company’s discussions with potential industry partners suggest it is exploring these strategic options.

Overall, UHP faces an uphill battle to achieve profitability and long-term sustainability as an independent company. Successful navigation of the regulatory process and securing the right commercial partnerships will be critical to unlocking the value of its CelluSTAT technology for shareholders.