{"url_path":"/sec/ug/10-k/2026/item-15","section_key":"item-15","section_title":"Item 15 **","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-27","source_url":"https://www.sec.gov/Archives/edgar/data/101295/0001171843-26-001973-index.html","accession_number":"0001171843-26-001973","cik":"0000101295","ticker":"UG","issuer_name":"UNITED GUARDIAN INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/101295/0001171843-26-001973-index.html","primary_entity_key":"0000101295","primary_entity_name":"UNITED GUARDIAN INC"},"word_count":9267,"has_tables":true,"body_markdown":"**Item 15.**\n\n**Exhibits and Financial Statement Schedules.**\n\n \n\n(a)\n\nDocuments filed as part of this report.\n\n \n \n \n\n \n\n(i)\n\nFinancial Statements - see Item 8. Financial Statements and Supplementary Data.\n\n \n\n \n\n(ii)\n\nFinancial Statement Schedules – None. (Financial statement schedules have been omitted either because they are not applicable, not required, or the information required to be set forth therein is included in the financial statements or notes thereto.)\n\n \n \n\n \n\n(iii)\n\nReport of Independent Registered Public Accounting Firm.\n\n \n \n\n \n\n(iv)\n\nNotes to Financial Statements.\n\n \n \n\n(b)\n\nExhibits\n\n \n \n\n \n\nThe exhibits listed on the accompanying Exhibit Index are filed as part of this Annual Report.\n\n \n\nSIGNATURES\n\n \n\nPursuant 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.\n\n \n\n \n\nUNITED-GUARDIAN, INC.\n\n \n \n\n \n\nBy: /s/ Donna Vigilante\n\n \n\n     Donna Vigilante \n\nDate: March 25, 2026\n\n     President\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n26\n\n \n\n \n\nPursuant 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.\n\n \n\nSignature\n\n \n\nTitle\n\n \n\nDate\n\n \n \n \n \n \n\nBy: /s/ Donna Vigilante\n\nDonna Vigilante\n\n \n\nPresident (Principal Executive Officer)\n\n \n\nMarch 25, 2026\n\n \n \n \n \n \n\nBy: /s/ Andrea Young\n\nAndrea Young\n\n \n\nChief Financial Officer (Controller, Principal Financial Officer, and Principal Accounting Officer); Treasurer; Secretary\n\n \n\nMarch 25, 2026\n\n \n \n \n \n \n\nBy: /s/ Lawrence F. Maietta\n\n \n\nDirector\n\n \n\nMarch 25, 2026\n\nLawrence F. Maietta\n\n \n \n \n \n\n \n \n \n \n \n\nBy: /s/ Arthur M. Dresner\n\n \n\nDirector\n\n \n\nMarch 25, 2026\n\nArthur M. Dresner  \n\n \n \n \n \n\n \n \n \n \n \n\nBy: /s/ Andrew A. Boccone\n\n \n\nDirector\n\n \n\nMarch 25, 2026\n\nAndrew A. Boccone  \n\n \n \n \n \n\n \n \n \n \n \n\nBy: /s/ Catherine Kolinski\n\n \n\nDirector\n\n \n\nMarch 25, 2026\n\nCatherine Kolinski\n\n \n \n \n \n\n \n \n \n \n \n\nBy: /s/ S. Ari Papoulias\n\n \n\nDirector\n\n \n\nMarch 25, 2026\n\nS. Ari Papoulias\n\n \n \n \n \n\n \n \n \n \n \n\nBy: /s/ Ken Globus\n\nKen Globus\n\n \n\nChairman of the Board of Directors\n\n \n\nMarch 25, 2026\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n27\n\n \n\n \n\nEXHIBIT INDEX\n\n \n\nExhibit #\n\nDescription\n\n \n \n\n3.1\n\nCertificate 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)\n\n[3.2](http://www.sec.gov/Archives/edgar/data/101295/000117184320002542/exh_32.htm)\n\n[By-laws of the Company, as amended and adopted by the Board of Directors on March 18, 2020 (Incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K, dated April 10, 2020)](http://www.sec.gov/Archives/edgar/data/101295/000117184320002542/exh_32.htm)\n\n[14.1](http://www.sec.gov/Archives/edgar/data/101295/000117184320002021/exh_14.htm)\n\n[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)](http://www.sec.gov/Archives/edgar/data/101295/000117184320002021/exh_14.htm)\n\n[19.1](http://www.sec.gov/Archives/edgar/data/101295/000117184325001611/ex_790490.htm)\n\n[Insider Trading Policy (Incorporated by reference to Exhibit 19 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2024)](http://www.sec.gov/Archives/edgar/data/101295/000117184325001611/ex_790490.htm)\n\n21.1\n\nSubsidiaries of the Company: None\n\n[31.1*](ex_931545.htm)\n\n[Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002](ex_931545.htm)\n\n[31.2*](ex_931546.htm)\n\n[Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002](ex_931546.htm)\n\n[32*](ex_931547.htm)\n\n[Joint certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002](ex_931547.htm)\n\n[97.1](http://www.sec.gov/Archives/edgar/data/101295/000117184324001526/ex_640386.htm)\n\n[Policy Relating to Recovery of Erroneously Awarded Compensation (Incorporated by reference to Exhibit 97.1 of the Registrant’s Current Report on Form 10-K for fiscal year ended December 31, 2023)](http://www.sec.gov/Archives/edgar/data/101295/000117184324001526/ex_640386.htm)\n\n101.INS***\n\nInline XBRL Instance Document\n\n101.SCH***\n\nInline XBRL Taxonomy Extension Schema Document\n\n101.CAL***\n\nInline XBRL Taxonomy Extension Calculation Linkbase Document\n\n101.DEF***\n\nInline XBRL Taxonomy Extension Definition Linkbase Document\n\n101.LAB***\n\nInline XBRL Taxonomy Extension Label Linkbase Document\n\n101.PRE***\n\nInline XBRL Taxonomy Extension Label Presentation Document\n\n104***\n\nCover Page Interactive Data File (Embedded within the inline XBRL document and included in Exhibit 101)\n\n \n\n* Filed herewith.\n\n \n\n*** 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.\n\n \n\n28\n\n \n\n \n\n \n\nINDEX TO FINANCIAL STATEMENTS\n\n(For the years ended\n\nDecember 31, 2025 and 2024)\n\n \n\n[Report of Grassi & Co. CPAs P.C, Independent Registered Public Accounting Firm ](#report)\n\n(PCAOB ID 606)\n\n[F-2](#report)\n\n \n \n\nFinancial Statements  \n\n \n\n \n \n\n[Statements of Income](#statements)\n\n[F-3](#statements)\n\n \n \n\n[Balance Sheets](#BS)\n\n[F-4](#BS) & [F-5](#BS2)\n\n \n \n\n[Statements of Stockholders' Equity](#Equity)\n\n[F-6](#Equity)\n\n \n \n\n[Statements of Cash Flows](#CF)\n\n[F-7](#CF)\n\n \n \n\n[Notes to Financial Statements](#Notes)\n\n[F-8](#Notes) - [F-21](#notes2)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nF-1\n\n \n\n \n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\n \n\n \n\nTo the Audit Committee and Stockholders of\n\nUnited-Guardian, Inc.\n\n \n\n**Opinion on the Financial Statements**\n\n \n\nWe have audited the accompanying balance sheets of United-Guardian, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related statements of income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.\n\n \n\n**Basis for Opinion**\n\n \n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.\n\n \n\n**Critical Audit Matters**\n\n \n\nCritical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.\n\n \n\n \n\nGRASSI & CO., CPAs, P.C.\n\n \n\nWe have served as the Company’s auditors since 2023.\n\nJericho, New York\n\nMarch 25, 2026\n\n \n\nF-2\n\n \n\n  \n\n \n\n**STATEMENTS OF INCOME**\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\n \n \n \n \n \n \n \n \n \n\nNet sales\n\n \n**$**\n**10,545,468**\n \n \n**$**\n**12,181,971**\n \n\n \n \n \n \n \n \n \n \n \n\nCosts and expenses:\n\n \n \n \n \n \n \n \n \n\nCost of sales\n\n \n \n5,404,328\n \n \n \n5,721,584\n \n\nOperating expenses\n\n \n \n2,434,148\n \n \n \n2,356,819\n \n\nResearch and development\n\n \n \n463,644\n \n \n \n456,779\n \n\n**Total costs and expenses**\n\n \n** **\n**8,302,120**\n \n \n** **\n**8,535,182**\n \n\n**Income from operations**\n\n \n** **\n**2,243,348**\n \n \n** **\n**3,646,789**\n \n\nOther income:\n\n \n \n \n \n \n \n \n \n\nInvestment income\n\n \n \n365,308\n \n \n \n434,679\n \n\nNet gain on marketable securities\n\n \n \n34,359\n \n \n \n26,989\n \n\n**Total other income**\n\n \n** **\n**399,667**\n \n \n** **\n**461,668**\n \n\n \n \n \n \n \n \n \n \n \n\n**Income before provision for income taxes**\n\n \n** **\n**2,643,015**\n \n \n** **\n**4,108,457**\n \n\n \n \n \n \n \n \n \n \n \n\nProvision for income taxes\n\n \n \n537,277\n \n \n \n857,582\n \n\n**Net income**\n\n \n**$**\n**2,105,738**\n \n \n**$**\n**3,250,875**\n \n\n \n \n \n \n \n \n \n \n \n\nEarnings per common share (basic and diluted)\n\n \n$\n0.46\n \n \n$\n0.71\n \n\n \n \n \n \n \n \n \n \n \n\nWeighted average shares (basic and diluted)\n\n \n \n4,594,319\n \n \n \n4,594,319\n \n\n \n\n \n\nSee Notes to Financial Statements\n\n \n\nF-3\n\n \n\n \n\n \n\n**BALANCE SHEETS**\n\n \n\nASSETS\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nCurrent assets:\n\n \n \n \n \n \n \n \n \n\nCash and cash equivalents\n\n \n$\n1,251,097\n \n \n$\n1,875,655\n \n\nMarketable securities\n\n \n \n7,322,646\n \n \n \n7,522,625\n \n\nAccounts receivable, net of allowance for credit losses of  $17,169 in 2025 and $14,342 in 2024\n\n \n \n1,586,889\n \n \n \n1,428,455\n \n\nInventories, net\n\n \n \n1,507,763\n \n \n \n1,451,995\n \n\nPrepaid expenses and other current assets\n\n \n \n207,839\n \n \n \n207,804\n \n\nPrepaid income taxes\n\n \n \n325,163\n \n \n \n179,017\n \n\n \n \n \n \n \n \n \n \n \n\n**Total current assets**\n\n \n** **\n**12,201,397**\n \n \n** **\n**12,665,551**\n \n\n \n \n \n \n \n \n \n \n \n\nDeferred income taxes, net\n\n \n** **\n**---**\n \n \n** **\n**175,397**\n \n\n \n \n \n \n \n \n \n \n \n\nProperty, plant, and equipment:\n\n \n \n \n \n \n \n \n \n\nLand\n\n \n \n69,000\n \n \n \n69,000\n \n\nFactory equipment and fixtures\n\n \n \n4,786,309\n \n \n \n4,743,238\n \n\nBuilding and improvements\n\n \n \n3,352,276\n \n \n \n3,336,352\n \n\n**Total property, plant and equipment**\n\n \n** **\n**8,207,585**\n \n \n** **\n**8,148,590**\n \n\n \n \n \n \n \n \n \n \n \n\nLess accumulated depreciation\n\n \n \n7,300,403\n \n \n \n7,192,203\n \n\n**Total property, plant, and equipment, net**\n\n \n** **\n**907,182**\n \n \n** **\n**956,387**\n \n\n \n \n \n \n \n \n \n \n \n\n**TOTAL ASSETS**\n\n \n**$**\n**13,108,579**\n \n \n**$**\n**13,797,335**\n \n\n \n\n \n\nSee Notes to Financial Statements\n\n \n\nF-4\n\n \n\n \n\n**BALANCE SHEETS**\n\n \n\nLIABILITIES AND STOCKHOLDERS' EQUITY\n\n \n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nCurrent liabilities:\n\n \n \n \n \n \n \n \n \n\nAccounts payable\n\n \n$\n480,791\n \n \n$\n425,003\n \n\nAccrued expenses\n\n \n \n1,164,948\n \n \n \n1,467,933\n \n\nDeferred revenue\n\n \n \n12,177\n \n \n \n---\n \n\nDividends payable\n\n \n \n11,405\n \n \n \n21,533\n \n\n**Total current liabilities**\n\n \n** **\n**1,669,321**\n \n \n** **\n**1,914,469**\n \n\n**Deferred income taxes, net**\n\n \n** **\n**207,246**\n \n \n** **\n**---**\n \n\n**Total liabilities**\n\n \n** **\n**1,876,567**\n \n \n** **\n**1,914,469**\n \n\n \n \n \n \n \n \n \n \n \n\nCommitments and contingencies\n\n \n \n\n \n \n \n\n \n\n \n \n \n \n \n \n \n \n \n\nStockholders’ equity:\n\n \n \n \n \n \n \n \n \n\nCommon stock, $.10 par value; 10,000,000 shares authorized; 4,594,319 shares issued and outstanding at December 31, 2025 and 2024\n\n \n \n459,432\n \n \n \n459,432\n \n\nRetained earnings\n\n \n \n10,772,580\n \n \n \n11,423,434\n \n\n**Total stockholders**’**equity**\n\n \n** **\n**11,232,012**\n \n \n** **\n**11,882,866**\n \n\n**TOTAL LIABILITIES AND STOCKHOLDERS**’**EQUITY**\n\n \n**$**\n**13,108,579**\n \n \n**$**\n**13,797,335**\n \n\n \n\n \n\n \n\nSee Notes to Financial Statements\n\n \n\nF-5\n\n \n\n \n\n \n\n**STATEMENTS OF STOCKHOLDERS' EQUITY**\n\n \n\nYears ended December 31, 2025 and 2024\n\n \n\n \n \n\nCommon stock\n\n \n \n\nRetained\n\n \n \n \n \n \n\n \n \n\nShares\n\n \n \n\nAmount\n\n \n \n\nearnings\n\n \n \n\nTotal\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Balance, January 1, 2024**\n\n \n \n4,594,319\n \n \n$\n459,432\n \n \n$\n10,929,150\n \n \n$\n11,388,582\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet income\n\n \n \n---\n \n \n \n---\n \n \n \n3,250,875\n \n \n \n3,250,875\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nDividends declared, not paid ($0.60 per share)\n\n \n \n---\n \n \n \n---\n \n \n \n(268\n)\n \n \n(268\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nDividends declared and paid ($0.60 per share)\n\n \n \n---\n \n \n \n---\n \n \n \n(2,756,323\n)\n \n \n(2,756,323\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Balance, December 31, 2024**\n\n \n \n4,594,319\n \n \n$\n459,432\n \n \n$\n11,423,434\n \n \n$\n11,882,866\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet income\n\n \n \n---\n \n \n \n---\n \n \n \n2,105,738\n \n \n \n2,105,738\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nDividends declared, not paid ($0.60 per share)\n\n \n \n---\n \n \n \n---\n \n \n \n(163\n)\n \n \n(163\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nDividends declared and paid ($0.60 per share)\n\n \n \n---\n \n \n \n---\n \n \n \n(2,756,429\n)\n \n \n(2,756,429\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Balance, December 31, 2025**\n\n \n \n4,594,319\n \n \n$\n459,432\n \n \n$\n10,772,580\n \n \n$\n11,232,012\n \n\n \n\n \n\n \n\nSee Notes to Financial Statements\n\n \n\nF-6\n\n \n\n \n\n \n\n**STATEMENTS OF CASH FLOWS**\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nCash flows from operating activities:\n\n \n \n \n \n \n \n \n \n\nNet income\n\n \n$\n2,105,738\n \n \n$\n3,250,875\n \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n \n \n \n \n \n \n \n \n\nDepreciation and amortization\n\n \n \n108,200\n \n \n \n95,885\n \n\nNet gain on marketable securities\n\n \n \n(34,359\n\n)\n\n \n \n(26,989\n)\n\nAllowance for credit losses\n\n \n \n2,827\n \n \n \n(2,330\n)\n\nAllowance for obsolete inventory\n\n \n \n(792\n)\n \n \n(14,208\n)\n\nDeferred income taxes\n\n \n \n382,643\n \n \n \n(124,467\n)\n\n(Increase) decrease in operating assets:\n\n \n \n \n \n \n \n \n \n\nAccounts receivable\n\n \n \n(161,261\n)\n \n \n140,714\n \n\nInventories\n\n \n \n(54,976\n)\n \n \n(214,281\n)\n\nPrepaid expenses and other current assets\n\n \n \n(35\n)\n \n \n(16,096\n)\n\nPrepaid income taxes\n\n \n \n(146,146\n)\n \n \n(2,797\n)\n\nIncrease (decrease) in operating liabilities:\n\n \n \n \n \n \n \n \n \n\nAccounts payable\n\n \n \n55,788\n \n \n \n290,554\n \n\nAccrued expenses\n\n \n \n(302,985\n)\n \n \n104,889\n \n\nDeferred revenue\n\n \n \n12,177\n \n \n \n(15,498\n)\n\n \n \n \n \n \n \n \n \n \n\n**Net cash provided by operating activities**\n\n \n** **\n**1,966,819**\n \n \n** **\n**3,466,251**\n \n\n \n \n \n \n \n \n \n \n \n\nCash flows from investing activities:\n\n \n \n \n \n \n \n \n \n\nAcquisitions of property, plant and equipment\n\n \n \n(58,995\n\n)\n\n \n \n(433,077\n\n)\n\nPurchases of marketable securities\n\n \n \n(12,941,872\n)\n \n \n(8,459,318\n)\n\nProceeds from sales of marketable securities\n\n \n \n13,176,210\n \n \n \n1,815,000\n \n\n**Net cash provided by (used in) investing activities**\n\n \n** **\n**175,343**\n \n \n** **\n**(7,077,395**\n**)**\n\n \n \n \n \n \n \n \n \n \n\nCash flows from financing activities:\n\n \n \n \n \n \n \n \n \n\nDividends paid\n\n \n \n(2,766,720\n\n)\n\n \n \n(2,756,323\n)\n\n**Net cash used in financing activities**\n\n \n** **\n**(2,766,720**\n**)**\n \n** **\n**(2,756,323**\n**)**\n\n \n \n \n \n \n \n \n \n \n\nNet decrease in cash and cash equivalents\n\n \n \n(624,558\n)\n \n \n(6,367,467\n)\n\nCash and cash equivalents, beginning of year\n\n \n \n1,875,655\n \n \n \n8,243,122\n \n\nCash and cash equivalents, end of year\n\n \n$\n1,251,097\n \n \n$\n1,875,655\n \n\n \n \n \n \n \n \n \n \n \n\n**Supplemental disclosure of cash flow information**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nTaxes paid\n\n \n$\n300,780\n \n \n$\n1,050,795\n \n\n \n \n \n \n \n \n \n \n \n\n**Supplemental disclosure of non-cash items:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nDividends payable\n\n \n$\n163\n \n \n$\n268\n \n\n \n\n \n\nSee Notes to Financial Statements\n\n \n\nF-7\n\n \n\n \n\n**NOTES TO FINANCIAL STATEMENTS**\n\n \n\n \n\n**NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT** **ACCOUNTING POLICIES**\n\n \n\n**Nature of Business**\n\n \n\nUnited-Guardian, Inc. (“Registrant” or “Company”) is a Delaware corporation that, through its Guardian Laboratories division, manufactures, markets and develops specialty cosmetic, personal care and sexual wellness ingredients, and a line of healthcare products including pharmaceuticals and medical lubricants. The Company also conducts research and product development, primarily related to the development of new and unique cosmetic ingredients. The Company’s research and development department also modifies, refines, and expands the uses for existing products, with the goal of further developing the market for the Company's products. Two major product lines, Lubrajel and Renacidin Irrigation Solution (“Renacidin”), together accounted for approximately 93% of the Company’s sales for the years ended December 31, 2025 and, 2024, respectively. Lubrajel accounted for approximately 48% and 60% of the Company’s sales for the years ended December 31, 2025 and December 31, 2024, respectively, and Renacidin accounted for approximately 45% and 33% of the Company’s sales for the years ended December 31, 2025 and December 31, 2024, respectively.\n\n \n\n**Segment Information**\n\n \n\nThe Company operates its business under one operating segment, which is also its reportable segment. The Company's chief operating decision maker (“CODM”), who is the President, reviews financial information presented at the consolidated level and decides how to allocate resources based on financial metrics, including net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM, along with the Board of Directors, use such financial metrics, including net income, to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits or allocate to other parts of the organization, such as working capital needs, mandatory and discretionary capital expenditures or other growth opportunities that may arise that are in the Company’s best interest and the best interest of the stockholders.\n\n \n\nNet income, other financial metrics and sales forecasts are used to monitor budget versus actual results. The reported segment revenue, segment profit or loss and significant segment expenses are the same as the consolidated results disclosed on the consolidated statements of income.\n\n \n\n**Impact of Global Supply Chain Instability, Inflation and Tariffs**\n\n \n\nDuring 2025, the United States (“U.S.”) changed its long-standing trade policies and announced significant new tariffs, with certain exceptions, on virtually all imported goods. These actions triggered the negotiation of new trade agreements with certain U.S. trading partners. While these negotiations resulted in the reduction of certain recently imposed tariffs, the average U.S. tariff rate remains at its highest level since the 1930s. In response to the changes in U.S. trade policies, certain U.S. trading partners imposed retaliatory tariffs on U.S. imports. Shifts in tariffs, trade agreements, import/export restrictions, trade sanctions, sector specific trade barriers, and other governmental trade actions, whether enacted by the U.S. or other countries, especially those instituted in the Company's significant markets or markets where its significant customers are located and the associated uncertainty of long-term trade policies, could impact the Company's sales volume, sales prices, and other costs. Changes in trade policies may also cause disruptions to material sourcing and availability, global supply chains and logistics and access to end markets. Additionally, changes in U.S. trade policy and associated responses from trading partners may create shifts in global market dynamics and result in continued global financial market volatility. The impact of these changes in trade policies and the resulting trade and market uncertainty could have a negative impact on the Company’s results of operations. There can be no assurance that, in the future, the U.S. or other countries or international trade bodies will not institute new tariffs or more restrictive trade policies or remedies and, as a result, the Company may face additional uncertainty and adverse impact on its business, financial condition and results of operations.\n\n \n\nF-8\n\n \n\n \n\n**Use of Estimates**\n\n \n\nIn preparing financial statements in conformity with a Generally Accepted Accounting Principles in the United States of America (“US GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates. Such estimated items include the allowance for credit losses, reserve for inventory obsolescence, accrued distribution fees, outdated material returns, possible impairment of marketable securities and the allocation of overhead.\n\n \n\n**Accounts Receivable and Reserves**\n\n \n\nIn accordance with FASB ASU 2025-05, the Company presents financial assets at the net amount expected to be collected, requiring immediate recognition of estimated credit losses expected to occur over the asset’s remaining life. This is in contrast to previous U.S. GAAP, under which credit losses were not recognized until it was probable that a loss had been incurred. The Company performed its expected credit loss calculation based on historical accounts receivable write-offs, including consideration of then-existing economic conditions.\n\n \n\nThe carrying amount of accounts receivable is reduced by an allowance for credit losses that reflects the Company’s best estimate of the amounts that will not be collected as of the balance sheet date. This allowance is based on the credit losses expected to arise over the life of the asset and is based on the Current Expected Credit Losses (“CECL”). At December 31, 2025 and 2024, the allowance for credit losses related to accounts receivable amounted to $17,169 and $14,342, respectively.\n\n \n\n**Revenue Recognition**\n\n \n\nThe Company records revenue in accordance with ASC Topic 606 “Revenue from Contracts with Customers.” Under this guidance, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company’s principal source of revenue is product sales.\n\n \n\nThe Company’s sales, as reported, are subject to a variety of deductions, some of which are estimated. 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, 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.\n\n \n\nDuring 2025 and 2024, the Company participated in various government drug rebate programs related to the sale of Renacidin, our most important pharmaceutical product. These programs include the Veterans Affairs Federal Supply Schedule (“FSS”), and the Medicare Manufacturer Discount Program (“MDP”) (formerly the Medicare Part D Coverage Gap Discount Program (“CGDP”)). These programs require us to sell our product at a discounted price, typically given in the form of a rebate. Our 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.\n\n \n\nOn January 1, 2025, the Centers for Medicare & Medicaid Services (“CMS”) implemented a new Medicare Part D Manufacturer Discount Program (“Discount Program”), which replaced the prior CGDP. The new Discount Program eliminates the coverage gap benefit phase, introduces pharmaceutical manufacturer discounts in the initial and catastrophic coverage phases, and lowers the cap on enrollee out-of-pocket costs. Under the new Discount Program, additional rebates are expected to be owed by pharmaceutical manufacturers due to the restructuring of the benefit periods and removal of the cap that was in place that limited the drug manufacturer’s liability. The overall financial impact of this new program will vary depending on the products being reimbursed but is expected to increase Medicare Part D rebates for drug manufacturers. On January 31, 2024, the Company was notified by CMS that it qualified as a “specified small manufacturer” and would be entitled to a multi-year phase-in period during which it would pay a lower percentage discount on drugs dispensed to beneficiaries. Based on the “specified small manufacturer” designation, it appears, that based on our current level of sales through the Medicare Part D Program, the Company would have reduced rebate liabilities in years 2025 and 2026, with rebates gradually increasing each year until they reach their full value in 2031. By the end of the phase in period in 2031, these rebate liabilities are expected to significantly exceed the liabilities we have recorded under the CGDP in previous years.\n\n \n\nF-9\n\n \n\n \n\nAs 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. The Company’s cosmetic products are shipped EXW from the Company’s facility in Hauppauge, NY, and the risk of loss and responsibility for the shipment passes to the customer upon shipment. Sales of the Company’s non-pharmaceutical medical products are deemed final upon shipment, and there is no obligation on the part of the Company to repurchase or allow the return of these goods unless they are defective. Sales of the Company’s pharmaceutical products are final upon shipment unless (a) they are found to be defective; (b) the product is damaged in shipping; (c) the product cannot be sold because it is too close to its expiration date; or (d) the product has expired (but it is not more than one year after the expiration date). This return policy conforms to standard pharmaceutical industry practice. The Company estimates an allowance for outdated material returns based on previous years’ historical returns of its pharmaceutical products.\n\n \n\nThe 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.\n\n \n\nAny allowances for returns are taken as a reduction of sales within the same period the revenue is recognized. Such allowances are determined based on historical experience under ASC Topic 606-10-32-8. At December 31, 2025 and 2024, the Company had an allowance of $194,947 and $276,732, respectively, for possible outdated material returns, which is included in accrued expenses. There is no asset value associated with these outdated material returns, as these products are destroyed.\n\n \n\nThe timing between recognition of revenue for product sales and the receipt of payment is not significant. The Company’s standard credit terms, which vary depending on the customer, range between 30 and 60 days. The Company recognizes an allowance for credit losses on its accounts receivable in accordance with ASU 2016-13, which is based on the credit losses expected to arise over the life of the asset and is based on Current Expected Credit Loss (“CECL”). Prompt-pay discounts are offered to some customers; however, due to the uncertainty of the customers taking the discounts, the discounts are recorded when they are taken.\n\n \n\nAt December 31, 2025, the Company recorded advance payments from one of its customers in the amount of $12,177, which was recorded as deferred revenue on the balance sheet. The related performance obligations associated with these payments were satisfied in the first quarter of 2026. No such advanced payments existed at December 31, 2024.\n\n \n\nThe Company has distribution agreements with certain distributors of its pharmaceutical products that entitle those distributors to distribution and services-related fees. The Company records distribution fees, and estimates of distribution fees, as offsets to revenue.\n\n \n\nDisaggregated net sales by product class are as follows:\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nCosmetic ingredients\n\n \n$\n3,006,522\n \n \n$\n5,438,262\n \n\nPharmaceuticals\n\n \n \n5,427,842\n \n \n \n4,715,145\n \n\nMedical lubricants\n\n \n \n2,111,104\n \n \n \n2,028,564\n \n\nTotal Net Sales\n\n \n$\n10,545,468\n \n \n$\n12,181,971\n \n\n \n\nF-10\n\n \n\n \n\nThe Company’s cosmetic ingredients are currently marketed worldwide by five distributors, of which the United States (“U.S.”)-based ASI purchases the largest volume. For the years ended December 31, 2025 and 2024, approximately 23% and 16%, respectively, of the Company’s sales were to (a) its foreign-based distributors (which does not include ASI), which marketed and distributed the Company’s cosmetic ingredients to customers outside the U.S, and (b) a few foreign customers for the Company’s medical lubricants, which were sold directly to those customers by the Company.\n\n \n\nDisaggregated sales by geographic region are as follows:\n\n \n\n \n \nYears ended December 31,\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nUnited States*\n\n \n$\n8,141,533\n \n \n$\n10,175,926\n \n\nOther countries\n\n \n \n2,403,935\n \n \n \n2,006,045\n \n\nNet Sales\n\n \n$\n10,545,468\n \n \n$\n12,181,971\n \n\n \n\n* Although a significant percentage of ASI’s purchases from the Company are sold to foreign customers, all sales to ASI are considered U.S. sales for financial reporting purposes, since all shipments to ASI are shipped to ASI’s warehouses in the U.S. 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, 77% of ASI’s sales in 2025 were to customers in foreign countries, compared with 79% in 2024. ASI’s largest foreign market in both 2025 and 2024 was China, which accounted for approximately 41% of ASI’s sales in 2025 and 43% of sales in 2024.\n\n \n\n**Cash and Cash Equivalents**\n\n \n\nFor financial statement purposes, the Company considers as cash equivalents all highly liquid investments with an original maturity of three months or less at the time of purchase. The Company deposits cash and cash equivalents with financially strong, FDIC-insured financial institutions, and it believes that any amounts above FDIC insurance limitations are at minimal risk. The amounts held in excess of FDIC limits at any point in time are considered temporary and are primarily due to the timing of maturities of United States Treasury Bills and Certificates of Deposit. Cash and cash equivalents held in these accounts are currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a maximum of $250,000. At December 31, 2025 and 2024, approximately $1,300 and $234,000 respectively, exceeded the FDIC limit. The Company also invests in certain money market mutual funds that are protected as securities by the Securities Investor Protection Corporation (“SIPC”). At December 31, 2025 and 2024, cash held in these money market mutual funds of approximately $502,000 and $563,000, respectively, exceeded the SIPC limit.\n\n \n\n**Dividends**\n\n \n\nOn January 27, 2025 the Company’s Board of Directors declared a cash dividend of $0.35 per share, which was paid on February 18, 2025 to all holders of record as of February 10, 2025. During the first half of 2025, the Company declared a total of $1,608,012 in dividends, of which $1,607,893 was paid. The balance of $119 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc. shares and are pending escheatment. On July 11, 2025, the Company’s Board of Directors declared a cash dividend of $0.25 per share, which was paid on August 1, 2025, to all holders of record as of July 25, 2025. Dividends totaling $1,148,536 were paid on August 1, 2025, and the balance of $44 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc. shares and are pending escheatment.\n\n \n\nIn addition, for the year ended December 31, 2025, the Company made payments of $10,290 in dividends in arrears to shareholders who had either converted their Guardian Chemical shares to United-Guardian, Inc. shares or whose shares had been escheated.\n\n \n\nOn July 10, 2024, the Company’s Board of Directors declared a cash dividend of $0.35 per share, which was paid on July 31, 2024, to all holders of record as of July 23, 2024. Dividends totaling $1,607,855 were paid and the balance of $156 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc. shares and are pending escheatment. On January 30, 2024, the Company’s Board of Directors declared a cash dividend of $0.25 per share, which was paid on February 20, 2024, to all holders of record as of February 12, 2024. Dividends totaling $1,148,468 were paid. The balance of $112 is payable to stockholders whose old Guardian Chemical shares have not yet been exchanged to United-Guardian, Inc. shares and are pending escheatment.\n\n \n\nF-11\n\n \n\n \n\n**Marketable Securities**\n\n \n\nThe Company’s marketable securities include investments in equity mutual funds, United States Treasury Bills (“U.S. Treasury Bills”) and Certificates of Deposit with maturities longer than 3 months. The Company’s marketable equity securities are reported at fair value with the related unrealized and realized gains and losses included in net income. U.S Treasury Bills and Certificates of Deposit are recorded at amortized cost. Realized gains or losses on mutual funds are determined on a specific identification basis. The Company evaluates its investments periodically for possible other-than-temporary impairment by reviewing factors such as the length of time and extent to which fair value had been below cost basis, the financial condition of the issuer and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery of market value. The Company would record an impairment charge to the extent that the cost of the available-for-sale securities exceeds the estimated fair value of the securities and the decline in value is determined to be other-than-temporary. During 2025 and 2024, the Company did not record an impairment charge regarding its investment in marketable securities because management believes, based on its evaluation of the circumstances, that the decline in fair value below the cost of certain of the Company’s marketable securities is temporary.\n\n \n\n**Inventories**\n\n \n\nInventories are valued at the lower of cost and net realizable value. Net realizable value is equal to the selling price less the estimated costs of selling and/or disposing of the product. Cost is determined using the average cost method, which approximates cost determined by the first-in, first-out (“FIFO”) method. Inventory costs include material, labor and factory overhead.\n\n \n\n**Property, Plant and Equipment**\n\n \n\nProperty, plant and equipment are carried at cost, less accumulated depreciation. Major replacements and betterments are capitalized, while routine maintenance and repairs are expensed as incurred. Assets are depreciated under both accelerated and straight-line methods. Depreciation charged as a result of using accelerated methods was not materially different than that which would result from using the straight-line method for all periods presented. Certain factory equipment and fixtures are constructed by the Company using purchased materials and in-house labor. Such assets are capitalized and depreciated on a basis consistent with the Company's purchased fixed assets.\n\n \n\nEstimated useful lives are as follows: \n\n \n\nFactory equipment and fixtures  \n\n5 - 7 years  \n\nBuilding  \n\n40 years  \n\nBuilding improvements  \n\nLesser of useful life or 20 years  \n\n \n\n**Impairment of Long-Lived Assets**\n\n \n\nLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairments were necessary at December 31, 2025 and 2024.\n\n \n\nF-12\n\n \n\n \n\n**Fair Value of Financial Instruments**\n\n \n\nManagement of the Company believes that the fair value of financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximates their carrying value due to their short payment terms and liquid nature.\n\n \n\n**Concentration of Credit Risk**\n\n \n\nAccounts receivable potentially expose the Company to concentrations of credit risk. The Company monitors the amount of credit it allows each of its customers, using the customer’s prior payment history to determine how much credit to allow or whether credit should be given at all. It is the Company’s policy to discontinue shipments to any customer that is substantially past due on its payments. The Company sometimes requires payment in advance from customers whose payment record is questionable. 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.\n\n \n\nFor the year ended December 31, 2025, three of the Company’s pharmaceutical wholesalers and one cosmetic ingredient distributor accounted for approximately 74% of the Company’s gross sales during the year and approximately 82% of its outstanding accounts receivable on December 31, 2025. For the year ended December 31, 2024, the same three pharmaceutical wholesalers and one cosmetic ingredient distributor accounted for a total of approximately 80% of the Company’s gross sales during the year and 87% of its outstanding accounts receivable on December 31, 2024.\n\n \n\n**Supplier Concentration**\n\n \n\nMost of the principal raw materials used by the Company consist of common industrial organic and inorganic chemicals and are available in ample supply from numerous sources. However, there are some raw materials used by the Company that are not readily available or require longer lead times. The Company has three major raw material vendors that collectively accounted for approximately 82% and 83% of the raw material purchases by the Company in 2025 and 2024, respectively. In addition to the Company’s raw materials concentration, the Company utilizes one contract manufacturer to produce its pharmaceutical product, Renacidin. Any disruption in this manufacturer’s operations could have a material impact on the Company’s revenue stream.\n\n \n\n**Income Taxes**\n\n \n\nIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to the temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.\n\n                                             \n\nDeferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. 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 the deferred tax assets will not be realized.\n\n \n\nUncertain tax positions are accounted for utilizing a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2025 and 2024, the Company did not have any unrecognized income tax benefits. It is the Company’s policy to recognize interest and penalties related to taxes as interest expense as incurred. During the years ended December 31, 2025 and 2024, the Company did not record any tax-related interest or penalties. The Company’s tax returns for 2022 and all subsequent years are subject to examination by the United States Internal Revenue Service (“IRS) and by the State of New York.\n\n \n\nF-13\n\n \n\n \n\n**Research and Development**\n\n \n\nResearch and development expenses are expenditures incurred in connection with in-house research on new and existing products. It includes payroll and payroll related expenses, outside laboratory expenditures, lab supplies, equipment repairs and maintenance and equipment depreciation.\n\n \n\n**Earnings Per Share Information**\n\n \n\nBasic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share would include the dilutive effect of outstanding stock options, if any.\n\n \n\n**New Accounting Standards**\n\n \n\nOn December 8, 2025, the FASB issued ASU 2025-11, “*Interim Reporting (Topic 270*)” which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes according to GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” These amendments are not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.\n\n \n\nIn July 2025, the FASB issued ASU 2025-05, which provides (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The practical expedient allows an entity to assume that, when estimating expected credit losses, current conditions as of the balance sheet date remain unchanged for the remaining life of the asset. The accounting policy election permits nonpublic entities that elect the practical expedient to also consider collection activity occurring after the balance sheet date when estimating expected credit losses. The standard is effective for fiscal years beginning after December 15, 2025, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company adopted ASU 2025-05 for the year ended December 31, 2025. The adoption did not have a material impact on its financial condition, results of operations or cash flows.\n\n \n\nOn November 4, 2024, the FASB issued ASU 2024-03 “*Disaggregation of Income Statement Expenses*”**(“DISE”). This guidance requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. Subsequently issued ASU 2025-01, clarified the effective date of this standard. This guidance is effective for annual reporting periods beginning after December 15, 2026, and for interim periods, within annual reporting periods beginning after December 15, 2027.\n\n \n\nIn December 2023, the FASB issued ASU 2023-09 “*Income Taxes- Improvements to Income Tax Disclosures.*” This guidance enhances the transparency and decision usefulness of income tax disclosures. More specifically, the amendments relate to the income tax rate reconciliation and income taxes paid disclosures and require 1) consistent categories and greater disaggregation of information in the rate reconciliation and 2) income taxes paid disaggregated by jurisdiction. This guidance is effective for fiscal years beginning after December 31, 2024. On January 1, 2025, the Company implemented this standard and applied the guidance under the new standard to include additional disclosures in this Form 10-K for the year ended December 31, 2025.\n\n \n\nIn November 2023, the FASB issued ASU 2023-07, *\"Improvements to Reportable Segment Disclosures.\"* This amendment requires additional disclosures by public entities, including those with a single reportable segment, to disclose significant segment expenses and other segment items for each reportable segment. The guidance applies to fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. On January 1, 2024, we adopted the new standard and applied the guidance under the new standard to include additional disclosures for our single reportable segment. See notes A and G for additional information.\n\n \n\nF-14\n\n \n\n  \n\n \n\n**NOTE B**–**CASH AND CASH EQUIVALENTS**\n\n \n\nCash 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:\n\n \n\n \n \nDecember 31,\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nDemand Deposits\n\n \n$\n248,997\n \n \n$\n404,801\n \n\nMoney market funds\n\n \n \n1,002,100\n \n \n \n1,470,854\n \n\nTotal cash and cash equivalents\n\n \n$\n1,251,097\n \n \n$\n1,875,655\n \n\n  \n\n \n\n**NOTE C - MARKETABLE SECURITIES**\n\n \n\nMarketable securities include investments in equity mutual funds, which are reported at their fair values, and U.S. Treasury Bills and Certificates of Deposit with original maturities greater than 3 months, which are recorded at amortized cost.\n\n \n\nThe disaggregated net gains and losses on the marketable securities recognized in the income statement for the years ended December 31, 2025 and 2024 are as follows:\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nNet gains recognized during the year on marketable securities\n\n \n$\n34,359\n \n \n$\n26,989\n \n\nLess: Net losses realized during the year on marketable securities sold during the period\n\n \n \n1,507\n \n \n \n---\n \n\n**Net unrealized gains recognized during the reporting year on marketable securities still held at the reporting date**\n\n \n$\n35,866\n \n \n$\n26,989\n \n\n \n\nThe fair values of the Company’s marketable securities are determined in accordance with US GAAP, with fair value being defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company utilizes the three-tier value hierarchy, as prescribed by US GAAP, which prioritizes the inputs used in measuring fair value as follows:\n\n \n\n• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\n \n\n• Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.\n\n \n\n• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.\n\n \n\nF-15\n\n \n\n \n\nThe Company’s marketable equity securities, which are considered available-for-sale securities, are re-measured to fair value on a recurring basis and are valued using Level 1 inputs using quoted prices (unadjusted) for identical assets in active markets. The following tables summarize the Company’s investments:\n\n \n\n**December 31, 2025**\n\n \n\n \n \n**Cost**\n \n \n\n**Fair Value**\n\n \n \n**Unrealized**\n\n**Gain**\n\n \n\n**Equity Securities:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nEquity and other mutual funds\n\n \n$\n713,120\n \n \n$\n777,963\n \n \n$\n64,843\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Other short-term investments:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nU.S. Treasury Bills (original maturities > 3 months)\n\n \n \n6,544,683\n \n \n \n6,544,683\n \n \n \n---\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Total marketable securities**\n\n \n$\n7,257,803\n \n \n$\n7,322,646\n \n \n$\n64,843\n \n\n \n\n**December 31, 2024**\n\n \n\n \n \n**Cost**\n \n \n\n**Fair Value**\n\n \n \n\n**Unrealized**\n\n**Gain**\n\n \n\n**Equity Securities:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nEquity and other mutual funds\n\n \n$\n634,705\n \n \n$\n663,682\n \n \n$\n28,977\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Other short-term investments:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nFixed income Certificates of Deposit (original maturities > 3 months)\n\n \n \n570,000\n \n \n \n570,000\n \n \n \n---\n \n\nU.S. Treasury Bills (original maturities > 3 months)\n\n \n \n6,288,943\n \n \n \n6,288,943\n \n \n \n---\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Total other short-term investments**\n\n \n$\n6,858,943\n \n \n$\n6,858,943\n \n \n$\n---\n \n\n**Total marketable securities**\n\n \n$\n7,493,648\n \n \n$\n7,522,625\n \n \n$\n28,977\n \n\n \n\nInvestment income is recognized when earned and consists principally of dividend income from equity mutual funds and interest income on United States Treasury Bills, Certificates of Deposit and money market funds. Realized gains and losses on sales of investments are determined on a specific identification basis.\n\n \n\nProceeds from the sale and redemption of marketable securities amounted to $13,176,210 for the year ended December 31, 2025, with realized losses on those sales of $1,507. Proceeds from the sale and redemption of marketable securities for the year ended December 31, 2024 amounted to $1,815,000, and there were no realized gains or losses.\n\n \n\n \n\n**NOTE D**–**INVENTORIES** \n\n \n\nInventories consist of the following:\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nRaw materials\n\n \n$\n442,993\n \n \n$\n448,113\n \n\nWork in process\n\n \n \n5,505\n \n \n \n58,699\n \n\nFinished products\n\n \n \n1,059,265\n \n \n \n945,183\n \n\n**Total Inventories**\n\n \n$\n1,507,763\n \n \n$\n1,451,995\n \n\n \n\nF-16\n\n \n\n \n\nInventories are valued at the lower of cost and net realizable value. Net realizable value is equal to the selling price less the estimated costs of selling and/or disposing of the product. Cost is determined using the average cost method, which approximates cost determined by the first-in, first-out method. Finished product inventories on December 31, 2025 and December 31, 2024 are net of a reserve of $32,000 and $32,792, respectively.\n\n \n\n \n\n**NOTE E**–**INCOME TAXES**\n\n \n\nThe provision for income taxes consists of the following:\n\n \n\n \n \n\nYears ended December 31,\n\n \n\nCurrent\n\n \n\n2025\n\n \n \n\n2024\n\n \n\nFederal\n\n \n$\n153,821\n \n \n$\n981,244\n \n\nState\n\n \n \n813\n \n \n \n805\n \n\nTotal current provision for income taxes\n\n \n \n154,634\n \n \n \n982,049\n \n\n \n \n \n \n \n \n \n \n \n\nDeferred\n\n \n \n \n \n \n \n \n \n\nFederal\n\n \n \n382,643\n \n \n \n(124,467\n)\n\nTotal deferred expense (benefit) from income taxes\n\n \n \n382,643\n \n \n \n(124,467\n)\n\n \n \n \n \n \n \n \n \n \n\n**Total provision for income taxes**\n\n \n$\n537,277\n \n \n$\n857,582\n \n\n \n\nThe following is a reconciliation of the Company’s effective income tax rate to the Federal statutory rate:\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n2025\n \n \n2024\n \n\n \n \n \n($)\n \n \n\nTax rate\n\n \n \n \n($)\n \n \n\nTax rate\n\n \n\nIncome taxes at statutory federal income tax rate\n\n \n$\n555,033\n \n \n \n21.0\n\n%\n\n \n$\n862,776\n \n \n \n21.0\n\n%\n\nState taxes, net of federal benefit\n\n \n \n642\n \n \n \n---\n \n \n \n636\n \n \n \n---\n \n\nResearch & development credits\n\n \n \n(10,000\n\n)\n\n \n \n(0.4\n)\n \n \n(9,000\n\n)\n\n \n \n(0.1\n\n)\n\nNon-taxable dividends\n\n \n \n(4,441\n)\n \n \n(0.2\n)\n \n \n---\n \n \n \n---\n \n\n(Over) under accrual from prior year\n\n \n \n(3,957\n)\n \n \n(0.1\n)\n \n \n3,170\n \n \n \n---\n \n\n**Provision for income taxes**\n\n \n$\n537,277\n \n \n \n20.3\n\n%\n\n \n$\n857,582\n \n \n \n20.9\n\n%\n\n \n\nThe tax effects of temporary differences which comprise the deferred tax assets and liabilities are as follows:\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nDeferred tax assets\n\n \n \n \n \n \n \n \n \n\nAllowance for credit losses\n\n \n$\n3,605\n \n \n$\n3,012\n \n\nInventories\n\n \n \n6,720\n \n \n \n6,886\n \n\nAccounts payable\n\n \n \n100,966\n \n \n \n89,251\n \n\nR&D expenses\n\n \n \n---\n \n \n \n206,069\n \n\nAccrued expenses\n\n \n \n243,493\n \n \n \n306,381\n \n\nTotal deferred tax assets\n\n \n$\n354,784\n \n \n$\n611,599\n \n\nDeferred tax liabilities\n\n \n \n \n \n \n \n \n \n\nAccounts receivable\n\n \n \n(336,852\n\n)\n\n \n \n(302,987\n\n)\n\nPrepaid expenses\n\n \n \n(57,682\n\n)\n\n \n \n(58,171\n\n)\n\nDepreciation on property, plant and equipment\n\n \n \n(153,879\n\n)\n\n \n \n(68,959\n\n)\n\nUnrealized gain on marketable securities\n\n \n \n(13,617\n)\n \n \n(6,085\n)\n\nTotal deferred tax liabilities\n\n \n \n(562,030\n\n)\n\n \n \n(436,202\n\n)\n\n**Net deferred tax (liability) asset**\n\n \n$\n(207,246\n)\n \n$\n175,397\n \n\n \n\nF-17\n\n \n\n \n\nOn July 4, 2025, H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA), was signed into law. The OBBBA includes, among other provisions, changes to United States corporate income tax law, including restoration of accelerated depreciation on capital expenditures, deductible research and development expenses, and modifications to the international tax framework. The OBBBA has multiple effective dates, with certain provisions effective in the current fiscal year and others effective in future fiscal years. The Company has estimated the tax effects of OBBBA, which did not have a material impact on its financial statements during the current period, while providing cash tax benefits in the current fiscal year due to accelerated tax deductions.\n\n \n\n \n\n**NOTE F - BENEFIT PLANS**\n\n \n\n**Defined Contribution Plan**\n\n \n\nThe Company sponsors a 401(k) defined contribution plan (“DC Plan”) that provides for a dollar-for-dollar employer matching contribution of the first 4% of each employee's pay. Employees become fully vested in employer matching contributions immediately. Company 401(k) matching contributions were approximately $101,000 and $84,000 for the years ended December 31, 2025 and 2024, respectively.\n\n \n\nThe Company can also elect to make 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 year ended December 31, 2024, the Company’s Board of Directors authorized discretionary contributions in the amount of $115,000 to be allocated among all eligible employees. For the year ended December 31, 2025, the Company’s Board of Directors elected not to fund a discretionary contribution due to the Company’s reduced sales and earnings. 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.\n\n \n\n \n\n**NOTE G - GEOGRAPHIC AND OTHER INFORMATION**\n\n \n\nThrough its Guardian Laboratories division, the Company conducts research, product development, manufacturing, and marketing of cosmetic, personal care and sexual wellness ingredients, and a line of healthcare products including pharmaceuticals and medical lubricants. All the products that the Company markets, with the exception of Renacidin, are produced at its facility in Hauppauge, New York. Renacidin, a urological product, is manufactured for the Company by an outside contract manufacturer. The Company’s R&D department not only develops new products but also modifies and refines existing products, with the goal of expanding the potential markets for the Company’s products. 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.\n\n \n\nThe Company operates in one business segment. The Company’s products are separated into four distinct product categories: cosmetic ingredients, pharmaceuticals, medical lubricants and sexual wellness ingredients. Each product category is marketed differently.\n\n \n\nThe cosmetic ingredients are marketed through a global network of distributors. These distributors purchase products outright from the Company and provide the main marketing and sales 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. This enables the Company to aggressively have its products marketed without the high cost of maintaining its own in-house marketing and sales staff. In 2024 we hired a marketing director to work alongside our distributors and provide marketing materials, training and aid in customer visits. We believe this strategy will allow us to better serve our mutual customers and build stronger relationships with our distributors. The Company currently has two written distribution agreements with the companies that market its cosmetic ingredients. The marketing contract with ASI terminated on December 31, 2023, and the Company is currently in negotiations with ASI to establish a new marketing agreement. At this time, we have not finalized a new agreement, but we have made significant strides in the negotiation process. Our goal is to finalize the contract in the first half of 2026, but there can be no assurance that we will be able to do so. We continued to work with ASI as we negotiate the new agreement by fulfilling orders, discussing marketing strategies, and continuing to engage with them on other marketing matters in a manner consistent with past practice. 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.\n\n \n\nF-18\n\n \n\n \n\nNo 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.\n\n                           \n\nThe pharmaceutical products include a urological product and a topical biocide that are sold to end users primarily through distribution agreements with 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, currently includes a Renacidin website which provides product information to patients and healthcare providers. We also expanded our marketing efforts in 2025 by creating a value proposition for insurance companies in an effort to be included on additional drug formularies. So far, our message has been well received, and we will continue our outreach activities. There is currently no active marketing effort for Clorpactin. Both of these products were originally developed in the 1950s. 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.\n\n \n\nThe 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 pharmaceutical products in that, unlike the pharmaceutical products, the Company is not required to obtain regulatory approval prior to marketing them. Regulatory approvals are the responsibility of the companies that market the finished 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 GMPs, and its manufacturing facility is subject to regular FDA oversight.\n\n \n\nThe sexual wellness ingredients are marketed by Brenntag Specialties, a global market leader in chemicals and ingredient distribution. The Company entered into a new marketing and distribution agreement with Brenntag in January of 2026 in the United States, Canada, Mexico and France.\n\n \n\nThe 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 the “United States” sales numbers because all shipments to Customer A are delivered to Customer A's warehouses in the U.S.\n\n \n\nIn 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” sales number in the table below.\n\n \n\n \n\n**(a)**\n\n**Net Sales**                                                                      \n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n2025\n \n \n2024\n \n\nCosmetic Ingredients\n\n \n$\n3,280,604\n \n \n$\n5,817,172\n \n\nPharmaceuticals\n\n \n \n6,225,905\n \n \n \n5,602,259\n \n\nMedical Lubricants\n\n \n \n2,111,104\n \n \n \n2,028,564\n \n\nGross Sales\n\n \n \n11,617,613\n \n \n \n13,447,995\n \n\nLess: Discounts and allowances\n\n \n \n(1,072,145\n\n)\n\n \n \n(1,266,024\n\n)\n\n**Net Sales**\n\n \n$\n10,545,468\n \n \n$\n12,181,971\n \n\n \n\nF-19\n\n \n\n \n\n \n\n**(b)**\n\n**Geographic Information**\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nUnited States\n\n \n$\n8,141,533\n \n \n$\n10,175,926\n \n\nOther countries\n\n \n \n2,403,935\n \n \n \n2,006,045\n \n\nNet Sales\n\n \n$\n10,545,468\n \n \n$\n12,181,971\n \n\n \n\n \n\n**(c)**\n\n**Gross Sales to Major Customers**\n\n \n\n \n \n\nYears ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nCustomer A\n\n \n$\n2,593,213\n \n \n$\n5,387,048\n \n\nCustomer B\n\n \n \n2,590,260\n \n \n \n2,239,705\n \n\nCustomer C\n\n \n \n1,874,068\n \n \n \n1,831,551\n \n\nCustomer D\n\n \n \n1,596,088\n \n \n \n1,331,544\n \n\nAll other customers\n\n \n \n2,963,984\n \n \n \n2,658,147\n \n\nTotal Gross Sales\n\n \n$\n11,617,613\n \n \n$\n13,447,995\n \n\n  \n\n \n\n**NOTE H - ACCRUED EXPENSES**\n\n \n\nAccrued expenses on December 31, 2025 and 2024 consist of:\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nBonuses\n\n \n$\n182,383\n \n \n$\n290,000\n \n\nDistribution fees\n\n \n \n463,331\n \n \n \n441,397\n \n\nPayroll and related expenses\n\n \n \n90,151\n \n \n \n73,915\n \n\nCompany 401(k) contribution\n\n \n \n---\n \n \n \n115,000\n \n\nAnnual report expenses\n\n \n \n80,387\n \n \n \n83,238\n \n\nAudit fee\n\n \n \n72,708\n \n \n \n73,364\n \n\nReserve for outdated material returns\n\n \n \n194,947\n \n \n \n276,732\n \n\nSales rebates\n\n \n \n55,983\n \n \n \n90,904\n \n\nOther\n\n \n \n25,058\n \n \n \n23,383\n \n\nTotal accrued expenses\n\n \n$\n1,164,948\n \n \n$\n1,467,933\n \n\n  \n\n \n\n**NOTE I - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES**\n\n \n\nAs of December 31, 2025, the Company had a number of unconverted Guardian Chemical shares that would convert to approximately 174 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. The Company’s transfer agent continues to try to locate the holders of those shares in anticipation of escheating them to the appropriate state jurisdictions. The Company is currently accruing dividends on the 174 shares that have not yet been exchanged or designated for escheatment as of December 31, 2025, and the Company will continue to do so as dividends are declared.\n\n \n\nF-20\n\n \n\n  \n\n \n\n**NOTE J - RELATED PARTY TRANSACTIONS**\n\n \n\nThe Company’s consulting agreement with Ken Globus, its former President, expired on May 31, 2024 and there were no consulting related payments to Mr. Globus during 2025. For the year ended December 31, 2024, the Company made payments of $20,000 to Mr. Globus for consulting services. Ken Globus is a director of the Company and currently serves as Chairman of the Board of Directors.\n\n \n\nDuring the years ended December 31, 2025 and 2024, the Company paid PKF O’Connor Davies $22,438 and $23,250, respectively, for accounting and tax services. Lawrence Maietta, a former partner at PKF O’Connor Davies, is now a senior consultant with the firm. Mr. Maietta is a director of the Company.\n\n \n\n \n\n**NOTE K**–**SUBSEQUENT EVENTS**\n\n \n\nThe Company has agreed to a monetary settlement with its contract manufacturer (“CM”) of its 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, the Company was unable to fill complete orders of Renacidin. On October 27, 2023, the Company notified its CM of its intention to file a claim for breach of its supplier contract and requested compensation for the loss of sales during the shutdown period. The settlement, which has been agreed upon by both parties, calls for the CM to supply the Company with a specified volume of product at no cost, which is expected to be shipped by the CM in March of 2026. The product covered by this agreement is valued at approximately $300,000 and the benefit of such settlement is expected to be recognized in the first quarter of 2026.\n\n \n\nOn January 16, 2026, the Company entered into a new distribution agreement with Brenntag Specialties, a global market leader in chemicals and ingredients distribution, for the distribution of the Company’s 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 both the personal care and sexual wellness markets.\n\n \n\nOn January 26, 2026, the Company’s Board of Directors declared a cash dividend of $0.25 per share, which was paid on February 17, 2026, to all stockholders of record as of February 9, 2026.\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nF-21"}