# United Guardian Inc: Form 10-Q for the period ended Mar 31, 2026

- Company: [United Guardian Inc](/companies/ug.md) (CIK 101295)
- Form: 10-Q
- Filed: 2026-05-12
- Accepted by EDGAR: May 12, 2026, 09:00 ET
- Period: 2026-03-31
- Accession: 0001171843-26-003276
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/101295/000117184326003276/ug20260331_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/101295/000117184326003276/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $2.9m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $1.4m | us-gaap:CostOfGoodsAndServicesSold |
| Research and development | 3 months, 2026-01-01 to 2026-03-31 | $115.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | $642.4k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | $214.2k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | $818.9k | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | $0.18 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | $604.5k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2026-01-01 to 2026-03-31 | $9.9k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2026-01-01 to 2026-03-31 | $1.1m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2026-03-31 | $735.9k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-03-31 | $11.8m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $12.7m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $1.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-03-31 | $1.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-03-31 | $10.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 13,854 characters.

### FORWARD-LOOKING STATEMENTS

*You should read the following discussion and analysis in conjunction with our financial statements and related notes contained elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors discussed in this report and those discussed in other documents we file with the SEC. In light of these risks, uncertainties and assumptions, readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements represent beliefs and assumptions as of the date of this report. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Past performance does not guarantee future results.*

### EXECUTIVE LEVEL OVERVIEW

Through our Guardian Laboratories division, we specialize in manufacturing cosmetic, personal care and sexual wellness ingredients and a line of healthcare products including pharmaceuticals and medical lubricants. With a long-standing reputation for delivering high-quality specialty products, we are committed to serving diverse markets with innovative solutions.

In January 2026, we entered into a new distribution agreement with Brenntag Specialties, a global market leader in chemicals and ingredients distribution, for the distribution of our new Natrajel® line of sexual wellness ingredients in the United States, Canada, and Mexico, and the distribution of Lubrajel® and Natrajel products in France. The new agreement provides an opportunity to grow the French market, which is known for innovation in personal care products. Although there have been no sales of our new sexual wellness products yet, the sexual wellness segment is expected to grow at a higher compound annual growth rate (“CAGR”) than other segments such as skin care, personal care and cosmetics. We are ready to begin manufacturing and distribution of this new line of products once orders are received.

With a refined product portfolio and strategic partnerships, we are well-positioned for future growth, leveraging our expertise in specialty ingredients to capitalize on emerging market opportunities.

In 2025, we launched an insurance payer outreach program with the goal of having Renacidin, our most important pharmaceutical product, included on additional drug formularies. As a result of this effort, we have received approval from two major Pharmacy Benefit Managers for inclusion on their formularies beginning in 2026. We will continue our insurance payer outreach as we move through 2026 and will also introduce a new outreach program with the focus on increasing awareness among healthcare professionals to grow the market for Renacidin.

### CRITICAL ACCOUNTING POLICIES

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, the discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in conformity with US GAAP. The preparation of those financial statements required us to make estimates and assumptions that affect the carrying value of assets, liabilities, revenues, and expenses reported in those financial statements. Those estimates and assumptions can be subjective and complex, and consequently, actual results could differ from those estimates and assumptions. Our most critical accounting policies relate to revenue recognition, concentration of credit risk, investments, inventory, and income taxes. Since December 31, 2025, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.

The following discussion and analysis cover material changes in our financial condition since the year ended December 31, 2025, and a comparison of the results of operations for the three months ended March 31, 2026 and March 31, 2025. This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

All references in this quarterly report to “sales” or “Sales” shall mean Net Sales unless specified otherwise.

### RESULTS OF OPERATIONS

### Net Sales

Net sales for the first quarter of 2026 increased by $391,095 (approximately 16%) as compared with the first quarter of 2025. The increase in sales for the first quarter of 2026 were principally due to a significant increase in sales of our pharmaceutical products coupled with a strong increase in sales of our Lubrajel line of cosmetic ingredients. The changes in our sales by product line are as follows:

(a) **Pharmaceutical Products**: Because there are fees, rebates, and allowances associated with sales of the Company’s two pharmaceutical products, Renacidin and Clorpactin® WCS-90, discussion of pharmaceutical sales includes references to both *gross sales* (before fees, rebates and allowances) and *net sales* (after fees, rebates, and allowances). *Net* sales of our two pharmaceutical products, Renacidin and Clorpactin WCS-90, together increased from $1,168,458 in the first quarter of 2025 to $1,445,324 in the first quarter of 2026, (approximately 24%). Gross sales of both products increased from $1,367,979 in the first quarter of 2025 to $1,694,182 in the first quarter of 2026 (approximately 24%).

The increase in sales was primarily due to a continued increase in gross sales of Renacidin, which increased from $1,232,396 in the first quarter of 2025 to $1,522,326 (approximately 24%) in the first quarter of 2026. The increase in gross sales of Renacidin was combined with an increase in sales of Clorpactin, which increased from $135,583 in the first quarter of 2025 to $171,856 in the first quarter of 2026, an increase of approximately 27%.

Commensurate with the increase in gross sales of our pharmaceutical products, we experienced an increase in pharmaceutical-related sales allowances of $49,337 (approximately 25%), compared with the same period in 2025. The increase in sales allowances was primarily due to an increase in VA chargebacks and distribution fees.

(b) **Cosmetic Ingredients**: Sales of our cosmetic ingredients increased by $144,909 (approximately 21%) in the first quarter of 2026 compared with the same period in 2025. The increase was primarily attributable to an increase in purchases of cosmetic ingredients by ASI, whose purchases increased by $203,099 (approximately 45%) compared with the same period in 2025. This increase was primarily due to ASI resuming regular purchases of the Company’s products after experiencing an overstock situation during 2025. This increase was offset by a decrease in sales to three other distributors of $54,963 (approximately 23%), and a decrease in sales to two direct cosmetic ingredient customers located in the United States of $3,227.

We continue to experience global competition from Asian and European companies that manufacture and sell products that are competitive with our products. These competitive products are usually sold at a lower price than our products; however, they may not compare favorably to the level of performance and quality of our products. We work closely with our network of distributors to price our products as competitively as possible and, when appropriate, to offer additional volume discounts and more aggressive pricing to maintain and increase sales and expand our customer base. We expect that this competitive environment will continue in 2026 and we plan to enhance our competitive position by strengthening our core capabilities and investing in new product development, especially in the area of naturally-derived products. We will continue to provide high-quality products, technical expertise, and the reliability our customers have come to expect from us.

(c) **Medical Lubricants**: Sales of the Company’s medical lubricants decreased by $30,680 (approximately 5%) for the first quarter of 2026 when compared with the same period in 2025. The decrease was due to customer ordering patterns.

### Cost of Sales

Cost of sales as a percentage of net sales for the first quarter of 2026 increased to 50%, compared with 45% for the first quarter of 2025. This increase was due to the larger ratio of our pharmaceutical products sales in the first quarter of 2026 compared to 2025. The pharmaceutical products carry higher tolling unit costs relative to our cosmetic and medical products produced in house at lower unit costs.

### Operating Expenses

Operating expenses, consisting of selling, general, and administrative expenses, increased by $34,228 (approximately 5%) for the first quarter of 2026 compared with the first quarter of 2025. The increase was mainly due to increases in sales & marketing expenses and payroll and payroll related expenses.

### Research and Development Expenses

R&D expenses increased by $627 (less than 1%) for the first quarter of 2026 compared with the first quarter of 2025.

### Investment Income

Investment income decreased by $14,873 (approximately 18%) for the first quarter of 2026 compared with the first quarter of 2025. The decrease was primarily due to a decrease in interest income from U.S. Treasury Bills during the first quarter of 2026 compared with the same period in 2025. This was the result of lower interest rates compared with the same period in 2025.

### Net Gain on Marketable Securities

The net gain on marketable securities increased from $12,350 for the quarter ended March 31, 2025, to $17,742 for the quarter ended March 31, 2026. The increase was primarily due to the recognition on a gain from the sale of equity mutual funds in the first quarter of 2026, compared to a loss on those sales in the same period in 2025. Our management team and Board of Directors continue to closely monitor our investment portfolio and have made and will continue to make any changes they believe may be necessary or appropriate to minimize the future impact on our financial position that the volatility of the global financial markets may have.

### Settlement Income

Included in net income is monetary consideration agreed upon with the contract manufacturer (“CM”) of our pharmaceutical product Renacidin. The settlement relates to the unexpected shutdown of the CM’s facility during the latter part of 2023 and beginning of 2024. During this time, we were unable to fill complete orders of Renacidin. On October 27, 2023, we notified the CM of our intention to file a claim for damages in connection with the CM’s breach of our supply contract with the CM, and we requested compensation for the loss of sales during the shutdown period. The settlement, which was agreed upon by both parties, calls for the CM to supply us with a specified volume of product at no cost. The majority of the product covered by this agreement was received at our facility in March of 2026 and was valued at $303,133. During the second quarter of 2026, we expect to receive the remaining product covered by the settlement, which is valued at approximately $35,000.

### Provision for Income Taxes

The Company's effective income tax rate was approximately 21% for the first quarter of 2026 and 2025 and is expected to remain at 21% for the current fiscal year.

### LIQUIDITY AND CAPITAL RESOURCES

Working capital decreased by $187,320 to $10,344,756 at March 31, 2026, down from $10,532,076 at December 31, 2025. The current ratio increased to 8.1 to 1 at March 31, 2026, up from 7.3 to 1 at December 31, 2025. The decrease in working capital was primarily due to a decrease in cash and cash equivalents. The increase in the current ratio was primarily due to a decrease in accounts payable.

The Company believes that its working capital is, and will continue to be, sufficient to support its operating requirements for at least the next twelve months. The Company’s long-term liquidity position will be dependent on its ability to generate sufficient cash flow from profitable operations.

The Company has no off balance-sheet transactions that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

The Company generated cash from operations of $604,536 and $322,080 for the three months ended March 31, 2026 and 2025, respectively. The increase was due primarily to an increase in net income.

Cash provided by investing activities for the three months ended March 31, 2026 and 2025 was $30,113 and $679,370, respectively. The decrease was due primarily to an increase in purchases of marketable securities in the first quarter of 2026 compared to the same period in 2025 due to decreased cash requirements.

Net cash used in financing activities was $1,149,892 and $1,607,893 for the quarters ended March 31, 2026 and 2025, respectively. The decrease in cash used in financing activities was primarily due to the payment of lower dividends in the first quarter of 2026 compared to the same period in 2025. We declared dividends of $0.25 per share in the first quarter of 2026, compared to $0.35 per share in the first quarter of 2025.

We expect to continue to use our cash to make dividend payments, purchase marketable securities, and take advantage of growth opportunities that may arise that are in the best interest of the Company and its shareholders.

### CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The information to be reported under this item is not required of smaller reporting companies.

## Controls and procedures

As filed, 2,055 characters.

(a) DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, including its Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon the evaluation performed by the Company’s management, including its Principal Executive Officer and Principal Financial Officer, it was determined that, as of the end of the period covered by this quarterly report, the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the 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 the Company’s management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding disclosures.

(b) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company's Principal Executive Officer and Principal Financial Officer have determined that, during the period covered by this quarterly report, there were no changes in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. They have also concluded that there were no significant changes in the Company’s internal controls after the date of the evaluation.

Filed May 12, 2026.
Source: SEC EDGAR, the filing index for accession 0001171843-26-003276. Last ingested by Listed: Oct 24, 2026, 14:54 ET. No prices; not investment advice.