Nu-Med Plus, Inc. - Quarter Report: 2018 September (Form 10-Q)

FORM 10-Q

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

For the quarterly period ended September 30, 2018

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

For the transition period from __________ to __________

Commission File Number 000-54808

NU-MED PLUS, INC.

(Exact name of registrant as specified in its charter)

Utah

45-3672530

(State or other jurisdiction of

(IRS Employer Identification No.)

incorporation or organization)

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

 (Address of principal executive offices)

 (Zip Code)

(801) 746-3570

 (Registrant’s telephone number, including area code)

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

Yes [X]   No [  ]

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

Large Accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer  ¨

Smaller reporting company x

Emerging growth company x

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

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

Yes [  ]   No [X]

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

Yes [X]   No [  ]

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

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

Not applicable.

Applicable Only to Corporate Issuers:

Class

Outstanding as of November 19, 2018

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

40,934,375 shares of $0.001 par value common stock on November 19, 2018

TABLE OF CONTENTS

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Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

NU-MED PLUS, INC.

FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2018

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Nu-Med Plus, Inc.

Financial Statements

(Unaudited)

Table of Contents

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

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Nu-Med Plus, Inc.

Notes to the Condensed Financial Statements

September 30, 2018

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Nu-Med Plus, Inc. is an emerging growth early stage medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. The Company's immediate focus is on a nitric oxide powder formulation that is 99% pure-with a one year shelf life, a "hospital" generator device with controls, plus built-in safety monitors, that delivers inhaled nitric oxide to replace expensive pressurized canisters, a compact mobile rechargeable device to deliver inhaled nitric oxide gas and a nitric oxide clinical unit, along with research into the application of nitric oxide in wound healing. The Company is incorporated in Utah.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Interim Financial Statement Presentation

The accompanying unaudited financial statements have been prepared by the Company pursuant to accounting principles generally accepted in the United States of America.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission.  The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, 2017 financial statements.  Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.

b. Reclassification of operating expenses

The Company has made a reclassification of the 2017 operating expenses that affects general and administrative expense and professional and consulting fees.  In the previously published 2017 financial statement presentations legal fees were included in general and administrative expenses.  In these accompanying unaudited financial statements those legal expenses have been reclassified to professional and consulting fees for comparative purposes, as in the 2018 financial presentation legal fees are included in the professional and consulting fee operating expenses.

c. Revenue Recognition

The Company is currently developing its products. It is anticipated that revenue will be recognized on product sales once the product has been shipped to the customers, persuasive evidence of an agreement exists, the price is fixed or determinable, and collectability is reasonably assured.

d. Estimates

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

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

e. Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  FASB Accounting Standards Codification (“ASC”) Topic 820 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

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

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

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

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is observable.

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

f. Cash and Cash Equivalents

The Company considers all deposit accounts and investment accounts with an original maturity of 90 days or less to be cash equivalents.  

g. Property and Equipment

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

h. Earnings per Share

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding during the period of the financial statement as follows:

Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. For the three months ended September 30, 2018 and September 30, 2017 there were no common stock equivalents from outstanding convertible notes included in the calculation.  For the nine months ended September 30, 2018 and September 30, 2017 there were -0- and 39,076,600 common stock equivalents from outstanding notes included in the calculation.  As of September 30, 2018 there were 32,294,231 potentially dilutive shares related to convertible notes and 3,152,950 potentially dilutive shares related to subscription payables that needed to be considered as common stock equivalents.  The common stock equivalents were excluded from the calculation of diluted earnings per share because the effect these common stock equivalents would have been anti-dilutive as of September 30, 2018.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings per share are shown, both basic and diluted, on the statement of operations.

i. Income Taxes

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

j. Equity Instruments Issued for Non-Cash Items

In accordance with ASC Topic 718, the Company records equity instruments issued for non-cash items at the grant-date fair value of the equity instruments issued.

k. Recent Accounting Pronouncements

Public Law No. 115-97, known as the Tax Cuts and Jobs Act “the “Tax Act”). Enacted on December 22, 2017, reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018.  Also, on December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act.  SAB 118 provides a measurement period of up to one year from the enactment date to complete the accounting.  Any adjustments during this measurement period will be included in net earnings from continuing operations as an adjustment to income tax expense in the reporting period when such adjustments are determined.  As the Company has net operating loss carryforwards which will offset tax liability for the coming year or years, no adjustments for the effect of the income tax rate change is reflected in our financial statements.

In February 2018, the Financial Standards Accounting Board (“FASB”) issued Accounting Statement Update No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.”  This ASU allows a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for certain income tax effects stranded in AOCI as a result of the Tax Act.  The reclassification eliminates the stranded tax effects resulting from the Tax Act and is intended to improve the usefulness of information reported to financial statement users.  ASU No. 2018-02 is effective for reporting periods beginning on January 1, 2019; early adoption is permitted. The Company does not currently have amounts to be reclassified under this and therefore believes it will not have an impact on its financial statements and statements of operations.

In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718),” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity of financial reporting for non-employee share-based payments. Currently, the accounting requirements for non-employee and employee share-based payments are significantly different. ASU 2018-07 expands the scope of Topic 718, which currently only includes share-based payments to employees, to include share-based payments to non-employees for goods or services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, “Equity — Equity-Based Payments to Nonemployees”. The amendments to ASU 2018 - 07 are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than a company’s adoption date of ASU No. 2014-09, (Topic 606), “Revenue from Contracts with Customers”. The Company is currently evaluating ASU 2018-07 and its impact on its condensed consolidated financial statements or disclosures.

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In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. The Company is in the process of evaluating the impact of the final rule on its consolidated financial statements.

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

NOTE 3 - GOING CONCERN

The Company continues to accumulate significant operating losses and has an accumulated deficit of $5,352,452 at September 30, 2018.  The funds on hand as of September 30, 2018, will not be sufficient to enable it to execute its business plan and funding through the sale of equity capital and short term related party and other shareholder loans in order to meet the planned expenditures for development, operations, and administrative cost over the next 12 months will be required. Planned expenditures are approximately $1,200,000 for the next twelve months. If plans to obtain further financing prove to be insufficient to fund operations, continued viability could be at risk.  These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company acknowledges that the funds on hand as of September 30, 2018, will not be sufficient to enable it to execute its business plan and funding through the sale of equity capital and short term related party and other shareholder loans in order to meet the planned expenditures for development, operations, and administrative cost over the next 12 months will be required. Planned expenditures are approximately $1,200,000 for the next twelve months. The Company is currently funded through December 31, 2018. If plans to obtain further financing prove to be insufficient to fund operations, continued viability could be at risk.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment and related accumulated depreciation consisted of the following at September 30, 2018, and December 31, 2017:

Depreciation expense for the nine months ended September 30, 2018 and 2017 was $10,969 and $8,958, respectively.

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NOTE 5 - PREFERRED STOCK

On October 19, 2011, the Company filed Articles of Incorporation with the State of Utah so as to authorize 10,000,000 shares of preferred stock having a par value of $0.001 per share. No preferred shares are issued or outstanding at September 30, 2018.

NOTE 6 - COMMON STOCK

Subscription Payable:

As of September 30, 2018, the Company has a subscription payable of $789,175, for which they have the obligation to issue 3,152,950 shares of restricted common stock.  

In February 2017, the Company entered into a stock purchase agreement with a related party, significant shareholder and debt holder (the “buyer”), under which the buyer may purchase up to $700,000 in shares of common stock at $0.25 per share. We have received $693,605 under this agreement as of the close of the subscription window on February 1, 2018, and of the corresponding 2,774,420 shares subscribed there are 2,734,420 shares that have yet to be issued as of the date of this report.

In September 2017, the Company entered into another stock purchase agreement with the buyer, under which the buyer may purchase up to $400,000 in shares of common stock at $0.25 per share.  The agreement expired on August 30, 2018.  As of September 30, 2018, we have received $103,070 under this agreement for 412,280 shares, which have not been issued as of the date of this report.  (See also Note 9 for subsequent investment by this related party).

Common Stock Issued to Officer:

In February 14, 2018 the Company announced that the consulting agreement with the Chief Financial Officer (Mr. Merrell) was terminated effective December 31, 2017, and that a new agreement was entered into effective January 1, 2018 under which Mr. Merrell would receive 2,000,000 shares of restricted common stock, vesting at 500,000 shares per year, for his service.  The term of the agreement is for one year, renewable for one year extensions up to four years.  The Company issued all 2,000,000 shares to Mr. Merrell on August 20, 2018.  Any common shares not earned during the four-year period are to be returned or cancelled.  An expense of $150,000 was recorded for the nine-month period ended September 30, 2018, which represents the fair value of the stock vested during that reporting period.  A charge will be made each quarter as the shares are earned under the provisions of the agreement until such time as all shares have been earned.

Common Stock Issued for Cash:

In May 2018, the Company entered into three stock subscriptions agreements with two investors.  The subscriptions gave the investors the right to purchase up to 440,000 shares of restricted common stock at $0.25 per share.  The Company received $110,000 under these subscription agreements and issued the 440,000 shares of restricted stock in June to fully satisfy its obligations under the agreements.    

Common Stock Issued for Services:

In September 2018, the Company issued 650,000 shares of stock to two consultants.  Of the shares, 150,000 were issued under a consulting contract for services rendered and vested upon issue and 500,000 shares of restricted stock were issued to a consultant for services rendered and to be rendered through June 1, 2019.  Consulting expenses amounting to $309,000 have been recorded during the nine-month period ended September 30, 2018.  A prepaid expense of $330,000 is recorded and will be amortized over the term of the consulting agreement.

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NOTE 7 – CONVERTIBLE PROMISSORY NOTES

$100,000 Convertible Promissory Note

On November 12, 2012, the Company issued a $100,000 convertible promissory note to SCS, a related party and significant shareholder, as compensation for services provided and to be provided during the period April 1, 2012 through March 31, 2013.  The note is due on demand, bears annual interest at 5.5%, and is convertible into shares of common stock at a conversion price to be agreed upon immediately prior to conversion.  On September 27, 2013, the Company amended the note to include a conversion price which of $0.01 per share for all unpaid principal and interest.  As of September 30, 2018 and December 31, 2017 interest accrued, but unpaid, was $35,762 and $31,629, respectively.

$130,100 Convertible Promissory Note

Prior to 2015, the Company entered into a convertible promissory note with SCS, a related party and significant shareholder, due on demand, bearing interest at 8% per annum, unsecured and convertible at $0.01 per share, with a price protection provision to a lower conversion price.  The balance of this note was $130,100 at September 30, 2018 and December 31, 2017 with accrued interest balances of $57,774 and $49,953, respectively.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Operating Lease Obligations

The Company entered into a lease for office space in February 2017 for $950 per month.  In November 2017 the Company signed a six-month extension of the lease with a lease payment of $978 per month. In July 2018 the Company signed a one-year extension to the lease with a monthly lease payment of $1,008.  Obligations under this lease are as follows:

In 2017 the Company entered into a 24-month lease for a nitric oxide analyzer, with a monthly payment of $1,014 per month.  

Obligations under the equipment lease are as follows:

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

NOTE 9 - SUBSEQUENT EVENTS

On October 18, 2018 the company agreed to amend the stock purchase agreement entered into in September 2017 with the buyer, under which the buyer may purchase up to $400,000 in shares of common stock at $0.25 per share. (see Note 6).  The agreement had an expiration date of August 30, 2018.  Upon agreeing to extend the expiration date to August 30, 2019, the Company accepted $25,000 under that agreement, under which the buyer may purchase up to $400,000 in shares of common stock at $0.25 per share.  A total of $128,070 has been received under this agreement, there are 512,280 shares of restricted common stock that will be issued in satisfaction of the Company's obligation under those agreements.  

On October 24, 2018 the Company entered into stock subscription agreements with two individuals under which

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they may purchase up to $35,000 in shares of common stock at $0.25 per share.  The Company accepted $35,000 under those agreements on October 24, 2018, and there are 140,000 shares of restricted common stock that will be issued in satisfaction of the Company’s obligation under those agreements.  

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

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

Special Note Regarding Forward-Looking Statements

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

Critical Accounting Policies and Estimates

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

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

When we begin generating revenue we will recognize revenue in accordance with ASC 606, Revenue From Contracts with Customers, issued by the FASB and IASB on May 28, 2014, with an implementation date beginning December 15, 2017.  Under the guidelines provided by ASC 606 an entity recognizes revenue to depict the transfer of goods and services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services.  

Revenue is recognized in accordance with that core principal by applying the following steps:

Step 1 – Identify the contract(s) with a customer

Step 2 – Identify the performance obligation in the contract

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Step 3 – Determine the transaction price

Step 4 – Allocate the transaction price to the performance obligations in the contract

Step 5 – Recognize revenue when, or as, the entity satisfies a performance obligation.

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

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

BUSINESS OVERVIEW

NU-MED PLUS, INC., a Utah corporation (“NU-MED” or the “Company”) was incorporated in October 2011 in the state of Utah to develop, manufacture and market new technologies utilizing nitric oxide in the medical device field, primarily through the creation of a nitric oxide generating compound formulation and delivery systems.  To date we have developed a hospital nitric oxide delivery system, a clinical nitric oxide delivery system, a mobile rechargeable device to deliver nitric oxide gas, and a nitric oxide system that can be used for research applications. NU-MED is headquartered in Salt Lake City, Utah.

Business

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

NU-MED is a medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. Our immediate focus is on the creation of a nitric oxide formulation, a hospital and clinical inhaled nitric oxide (“NO”) generator and a mobile rechargeable device to deliver nitric oxide gas to offer solutions to hospitals, health systems and the medical community throughout the world.

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

      1.  Nitric oxide proprietary formulation.

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

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

4. A compact, mobile/portable rechargeable device to deliver inhaled nitric oxide gas.  The portable system necessitates a design which can be deployed where a reliable source of power is not available or is difficult to access. The key feature is a rechargeable battery pack that powers the unit for the full duration of a therapeutic session. It can be recharged using existing electrical sources, a solar array or other alternative energy source. The

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unit is designed as a low power but fully functional nitric oxide delivery system for inhalation therapy, that can be used as a transport device during the movement of a patient or as a delivery device in those remote areas of the world that do not currently have electrical power readily available.

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

NU-MED has one of its research units placed with a research group that is currently using the unit in an animal study.  NU-MED will receive data during the study.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2018, we had assets of $552,451 with current assets of $511,886 and liabilities of $357,967. Our current assets consisted primarily of cash in the amount of $168,262 and prepaid expenses in the amount of $343,624. We currently have no revenue and have had to rely on loans from shareholders or sale of our stock to cover expenses.  Without additional capital, we will not be able to stay in business and move our business plan forward. We anticipate, based on our preliminary budgets, that we will need $300,000 in additional financing for the next twelve months to cover our corporate overhead and need an additional $900,000 to cover ongoing product development. Since we will not have a commercial product in the next twelve months, we will have to continue to rely on outside funding to support our operations and product development and testing efforts.  Given the financial state of NU-MED, we will not be able to seek traditional bank financing and have to rely on private stock sales as well as potential loans from investors and shareholders.  At this time, we have a stock subscription agreement under which the investor has the right to purchase up to $400,000 of restricted common stock at a price of $0.25 per share.  In October 2018, agreement was reached to extend the expiration date of this agreement to August 30, 2019.  During the nine-month period ended September 30, 2018, we accepted $43,070 under this agreement and $110,000 under additional stock subscriptions agreements entered into with qualified investors.  We cannot estimate the full costs to bring our proposed product to market or the timing of such commercialization.  Given the nature of our product being in the medical field, testing is very expensive and we would need more capital prior to completing the testing phase. Any refinement or modification of the product after the prototype is developed would also require additional capital. At this time, we will have to continue to rely on outside capital and a budget that may require adjustment as we move further in the product development phase.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

For the three months ended September 30, 2018 and September 30, 2017, we had no revenues and operating expenses of $522,069 and $137,749, respectively.  For the three months ended September 30, 2018 and September 30, 2017 we had other expenses of $4,779 and $5,228, respectively.  For the three months ended September 30, 2018 and September 30, 2017, we had net losses of $526,848 and $142,977, respectively.  Consulting expenses increased by $366,523 to $411,346 in the three months ended September 30, 2018 compared to $48,532 for the three months ended September 30, 2017 as we accelerated the work by our FDA consultant to put into place the documentation required for the FDA submission process and initiated our investor relations program.  Lab supplies were $6,308 lower for the three months ended September 30, 2018 compared to the three months ended September 30, 2017, as the majority of the parts needed for the hospital unit were purchased in 2017.We will be dependent on outside capital to support operations for the foreseeable future and at this time do not have any commitments for additional capital beyond the $400,000 stock subscription earlier mentioned.  We do not anticipate any revenue for the foreseeable future as our products are still in the development stage.

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FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

For the nine months ended September 30, 2018 and September 30, 2017, we had no revenues and operating expenses of $833,345 and $318,778, respectively.  The increased operating expenses primarily resulted from a $422,684 increase in consulting expense, growing to $516,058 for the nine-month period ended September 30, 2018 compared to $93,374 for the nine-month period ended September 30, 2017. For the nine months ended September 30, 2018 we had other expenses of $14,544.  For the nine months ended September 30, 2017 we had other income of $4,048,399, primarily resulting from a $6,716,358 gain on extinguishment of debt, offset by a loss on derivative of $2,632,571.  For the nine months ended September 30, 2018 we had a net loss of $847,889.  For the nine months ended September 30, 2017, we had net income of $3,729,621 due to the gain on extinguishment earlier discussed.  We will be dependent on outside capital to support operations for the foreseeable future and at this time do not have any commitments for additional capital beyond the $400,000 stock subscription earlier mentioned.  We do not anticipate any revenue for the foreseeable future as our products are still in the development stage.

SUMMARY OF BALANCE SHEET INFORMATION

The table below represents a summary of our condensed consolidated balance sheets at September 30, 2018 and December 31, 2017:

September 30, 2018

December 31, 2017

Cash and cash equivalents

$  168,262

$ 351,043

Total current assets

    511,886

   360,210

Total assets

    552,451

   406,719

Total liabilities

    357,967

   338,477

Accumulated deficit

(5,352,452)

              (4,504,563)

Total stockholders’ equity

    194,484

     68,242

Cash and cash equivalents decreased by $182,781 at September 30, 2018 compared to December 31, 2017.  The decrease in cash is due to the payment of operating expenses and the increased costs of consultants as we work to finalize the design and building of our products, offset by cash received under stock subscription agreements.

Total liabilities increased by $19,490 at September 30, 2018 compared to December 31, 2017 primarily due to increases in accounts payable and accrued expenses, of which accrued interest on notes is the largest component.

Off-Balance Sheet Arrangements.

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

Forward-looking Statements

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

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

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15€ or 15d-15e) under the Exchange Act as of the end of the period covered by this report.  Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, not matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based on that evaluation, as of September 30, 2018, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  

Changes in internal control over financial reporting

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

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

None.

ITEM 1A.  Risk Factors

Not applicable

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

Recent Sales of Unregistered Securities

None.

Other Securities Transactions

None.

Use of Proceeds of Registered Securities

None.

Purchases of Equity Securities by Us and Affiliated Purchasers

During the nine months ended September 30, 2018, we have not purchased any equity securities nor have any officers or directors of the Company.

Item 3.  Defaults Upon Senior Securities

Not applicable.

ITEM 4.  Mine Safety Disclosure

Not applicable.

ITEM 5.  Other Information

None.

ITEM 6.  Exhibits

a) Index of Exhibits:

Exhibit Table #

Title of Document

Location

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SIGNATURES

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

NU-MED PLUS, INC.,

(Registrant)

November 19, 2018

By:  /s/ Jeffrey L. Robins

Jeffrey L. Robins, CEO, Principal Executive Officer

November 19, 2018

By: /s/Keith L. Merrell

Keith L. Merrell, CFO/Principal Accounting

       Officer

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