10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐  TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

COMMISSION FILE NUMBER: 1-10526

UNITED-GUARDIAN, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	11-1719724
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

230 Marcus Boulevard, Hauppauge, New York 11788

(Address of Principal Executive Offices)

(631) 273-0900

(Registrant’s Telephone Number)

N/A

(Former name, former address, and former fiscal year, if changed since last report)

Cover page 1 of 2

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.10 par value per share	UG	NASDAQ Global Market

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 preceding 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 ☑ No ☐

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 ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 ☑
	Emerging growth company ☐

If an emerging growth company, indicate by checkmark 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 ☑

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

As of November 1, 2023, the Registrant had issued and outstanding 4,594,319 shares of Common Stock, $.10 par value per share ("Common Stock").

Cover page 2 of 2

UNITED-GUARDIAN, INC.

INDEX TO FINANCIAL STATEMENTS

Part I. FINANCIAL INFORMATION		Page No.
	Item 1 - Condensed Financial Statements (unaudited unless indicated otherwise)
	Statements of Income - Three and Nine Months ended September 30, 2023 and 2022	2
	Balance Sheets – September 30, 2023 (unaudited) and December 31, 2022 (audited)	3-4
	Statements of Changes in Stockholders’ Equity – Three and Nine Months ended September 30, 2023 and 2022	5
	Statements of Cash Flows - Nine Months ended September 30, 2023 and 2022	6
	Notes to Condensed Financial Statements	7-16
	Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	16-22
	Item 3 - Quantitative and Qualitative Disclosures About Market Risk	22
	Item 4 - Controls and Procedures	22-23
Part II. OTHER INFORMATION
	Item 1 - Legal Proceedings	23
	Item 1A - Risk Factors	23
	Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 3 - Defaults Upon Senior Securities	23
	Item 4 - Mine Safety Disclosures	23
	Item 5 - Other Information	23
	Item 6 - Exhibits	24
Signatures		24

Page 1 of 24

UNITED-GUARDIAN, INC.

Part I. FINANCIAL INFORMATION

ITEM 1. Condensed Financial Statements

STATEMENTS OF INCOME
(UNAUDITED)

	THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2023			2022			2023		2022
Net sales	$	3,057,518		$	2,417,022		$	8,278,141	$	9,935,557
Costs and expenses:
Cost of sales		1,749,041			1,076,035			4,272,043		4,479,905
Operating expenses		488,464			532,333			1,580,503		1,699,311
Research and development		98,141			120,924			353,829		364,856
Total costs and expenses		2,335,646			1,729,292			6,206,375		6,544,072
Income from operations		721,872			687,730			2,071,766		3,391,485
Other Income:
Investment income		79,682			46,995			182,264		146,405
Net (loss) gain on marketable securities		(14,357	)		(300,526	)		65,823		(1,154,464	)
Total other income (expense)		65,325			(253,531	)		248,087		(1,008,059	)
Income before provision for income taxes		787,197			434,199			2,319,853		2,383,426
Provision for income taxes		160,441			88,681			475,922		493,119
Net income	$	626,756		$	345,518		$	1,843,931	$	1,890,307
Earnings per common share
(Basic and Diluted)	$	0.14		$	0.07		$	0.40	$	0.41
Weighted average shares – basic and diluted		4,594,319			4,594,319			4,594,319		4,594,319

See Notes to Condensed Financial Statements

Page 2 of 24

UNITED-GUARDIAN, INC.

BALANCE SHEETS

ASSETS

		SEPTEMBER 30,		DECEMBER 31,
		2023		2022
		(UNAUDITED)		(AUDITED)
Current assets:
Cash and cash equivalents	$	7,116,131	$	830,452
Marketable securities		928,847		5,653,516
Accounts receivable, net of allowance for credit losses of $28,613 at September 30, 2023 and $20,063 at December 31, 2022		1,816,242		1,427,576
Inventories, net		1,228,076		1,672,012
Prepaid expenses and other current assets		132,699		201,846
Prepaid income taxes		393,636		185,228
Total current assets		11,615,631		9,970,630
Deferred income taxes		-		110,544
Net property, plant, and equipment:
Land		69,000		69,000
Factory equipment and fixtures		4,615,387		4,585,055
Building and improvements		2,937,746		2,895,742
Total property, plant, and equipment		7,622,133		7,549,797
Less: Accumulated depreciation		7,064,991		6,990,636
Total property, plant, and equipment, net		557,142		559,161
TOTAL ASSETS	$	12,172,773	$	10,640,335

See Notes to Condensed Financial Statements

Page 3 of 24

UNITED-GUARDIAN, INC.

BALANCE SHEETS

(continued)

LIABILITIES AND STOCKHOLDERS’ EQUITY

	SEPTEMBER 30,		DECEMBER 31,
	2023		2022
	(UNAUDITED)		(AUDITED)
Current liabilities:
Accounts payable	$	166,199	$	30,415
Accrued expenses		1,286,166		1,322,056
Dividends payable		21,265		21,220
Total current liabilities		1,473,630		1,373,691
Deferred income taxes		48,000		-
Commitments and contingencies
Stockholders’ equity:
Common stock (at $.10 par value) (10,000,000 shares authorized; 4,594,319 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively)		459,432		459,432
Retained earnings		10,191,711		8,807,212
Total stockholders’ equity		10,651,143		9,266,644
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	12,172,773	$	10,640,335

See Notes to Condensed Financial Statements     

Page 4 of 24

UNITED-GUARDIAN, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

	Common Stock
	Shares		Amount		Retained  Earnings			Total
Balance, January 1, 2023	4,594,319	$	459,432	$	8,807,212		$	9,266,644
Net income	-		-		756,081			756,081
Balance, March 31, 2023	4,594,319	$	459,432	$	9,563,293		$	10,022,725
Net income	-		-		461,094			461,094
Balance, June 30, 2023	4,594,319	$	459,432	$	10,024,387		$	10,483,819
Net income	-		-		626,756			626,756
Dividends declared and paid ($0.10 per share)	-		-		(459,387	)		(459,387	)
Dividends declared, not paid ($0.10 per share)	-		-		(45	)		(45	)
Balance, September 30, 2023	4,594,319	$	459,432	$	10,191,711		$	10,651,143

 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

	Common Stock
	Shares		Amount		Retained  Earnings			Total
Balance, January 1, 2022	4,594,319	$	459,432	$	9,361,837		$	9,821,269
Net income	-		-		911,465			911,465
Balance, March 31, 2022	4,594,319	$	459,432	$	10,273,202		$	10,732,734
Net income	-		-		633,324			633,324
Dividends declared and paid ($0.37 per share)	-		-		(1,699,392	)		(1,699,392	)
Dividends declared, not paid ($0.37 per share)	-		-		(506	)		(506	)
Balance, June 30, 2022	4,594,319	$	459,432	$	9,206,728		$	9,666,160
Net income	-		-		345,518			345,518
Balance, September 30, 2022	4,594,319	$	459,432	$	9,552,246		$	10,011,678

See Notes to Condensed Financial Statements

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UNITED-GUARDIAN, INC.

STATEMENTS OF CASH FLOWS
(UNAUDITED)

	NINE MONTHS ENDED
	SEPTEMBER 30,
	2023			2022
Cash flows from operating activities:
Net income	$	1,843,931		$	1,890,307
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		74,355			102,851
Net (gain) loss on marketable securities		(65,823	)		1,154,464
Gain on sale of equipment		(10,000	)		-
Allowance for credit losses		8,550			(1,851	)
Allowance for obsolete inventory		37,000			-
Deferred income taxes		158,544			(268,410	)
(Increase) decrease in operating assets:
Accounts receivable		(397,216	)		688,187
Inventories		406,936			(883,825	)
Prepaid expenses and other current assets		69,147			43,325
Prepaid income taxes		(208,408	)		(150,633	)
Increase (decrease) in operating liabilities:
Accounts payable		135,784			(314,304	)
Accrued expenses		(35,890	)		(80,753	)
Income taxes payable		-			(88,738	)
Deferred revenue		-			(190,164	)
Net cash provided by operating activities		2,016,910			1,900,456
Cash flows from investing activities:
Acquisition of property, plant and equipment		(72,336	)		(60,165	)
Proceeds from sale of equipment		10,000			-
Proceeds from sale of marketable securities		5,255,145			1,658,293
Purchases of marketable securities		(464,653	)		(1,833,879	)
Net cash provided by (used in) investing activities		4,728,156			(235,751	)
Cash flows from financing activities:
Dividends paid		(459,387	)		(1,699,392	)
Net cash used in financing activities		(459,387	)		(1,699,392	)
Net increase (decrease) in cash and cash equivalents		6,285,679			(34,687	)
Cash and cash equivalents at beginning of period		830,452			531,213
Cash and cash equivalents at end of period	$	7,116,131		$	496,526
Supplemental disclosure of cash flow information:
Taxes paid	$	525,000		$	1,000,000
Supplemental disclosure of non-cash items:
Dividends payable	$	45		$	506

See Notes to Condensed Financial Statements

Page 6 of 24

UNITED-GUARDIAN, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

1. Nature of Business

United-Guardian, Inc. (“Registrant” or “Company”) is a Delaware corporation that, through its Guardian Laboratories division, manufactures and markets cosmetic ingredients, pharmaceuticals, and medical lubricants. Prior to July 1, 2023, the Company manufactured and reported sales of an industrial line of products; however, this product line was discontinued after the second quarter of 2023 due to low sales volume with no growth. The Company conducts research and product development and modifies, refines, and expands the uses for existing products, with the goal of further developing the market for its products. The Company also develops new products using natural and environmentally friendly raw materials, which is a priority for many of the Company’s cosmetic customers.

2. Basis of Presentation

Interim condensed financial statements of the Company are prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for interim financial information, pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods have been included. The results of operations for the three and nine months ended September 30, 2023 (also referred to as the "third quarter of 2023" and the "first nine months of 2023", respectively) are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2023. The interim unaudited condensed financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

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

There continues to be residual impact on the Company’s business and financial performance from the coronavirus pandemic. In particular, there has been decreased demand for the Company’s Lubrajel® products in China as a result of (a) slower than expected post-COVID economic recovery in China; (b) increased competition from lower-priced competitors, especially those from Asian producers; and (c) slower destocking rate while the zero-COVID mandate was in effect in China for much of 2022.

As a result of the ongoing supply chain instability, the Company has experienced longer lead times for many of its raw materials. While raw material prices have stabilized, the increases in raw material prices that the Company experienced during 2022 and early 2023, have negatively impacted the Company’s gross profit margins in the first half of 2023. As a result, the Company instituted price increases on many of its products to offset these increased raw material costs.

Page 7 of 24

While inflation has lessened during 2023, any future increases in the inflation rate will likely increase raw material costs, shipping costs, and internal labor costs, which could negatively impact the Company’s future gross margins.

With the residual effects of the coronavirus pandemic, combined with global supply chain instability and inflation, there continues to be uncertainty regarding the potential impact on the Company’s operations and its financial results. As a result the Company is unable to provide an accurate estimate or projection as to what the future impact will be on the Company’s operations and its financial performance going forward.

4. Use of Estimates

In preparing financial statements in conformity with 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, as well as revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimated items include the allowance for bad debts, reserve for inventory obsolescence, accrued distribution fees, outdated material returns, possible impairment of marketable securities, and the allocation of overhead.

5. Cash and Cash Equivalents

For 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 on United States Treasury Bills. 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 September 30, 2023 and December 31, 2022, $664,879 and $105,000, respectively, exceeded the FDIC limit.

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

		September 30,		December 31,
		2023		2022
Demand deposits	$	396,540	$	314,685
Certificates of Deposit (original 3-month maturity)		500,000		---
Money market funds		514,017		18,590
U.S. Treasury Bills (original 3-month maturity)		5,705,574		497,177
Total cash and cash equivalents	$	7,116,131	$	830,452

Page 8 of 24

6. Revenue Recognition

The 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.

The 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 participation in Medicare programs, distribution fees, discounts, and outdated product returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on sales for a reporting period.

During 2023 and 2022, the Company participated in various government drug rebate programs related to the sale of Renacidin®, its most important pharmaceutical product. These programs include the Veterans Affairs Federal Supply Schedule (FSS), and the Medicare Part D Coverage Gap Discount Program (CGDP). These programs require the Company to sell its product at a discounted price. The Company’s sales, as reported, are net of these product rebates and discounts, some of which are estimated, and are recorded in the same period that the revenue is recognized.

The Company recognizes revenue from sales of its cosmetic ingredients and medical lubricants when those products are shipped, as long as a valid purchase order has been received and future collection of the sale amount is reasonably assured. These products are shipped “Ex-Works” from the Company’s facility in Hauppauge, NY, and it is at this time that risk of loss and responsibility for the shipment passes to the customer and the Company’s performance obligation is satisfied. Sales of these products are deemed final, and there is no obligation on the part of the Company to repurchase or allow the return of these goods unless they are defective.

The Company’s pharmaceutical products are shipped via common carrier upon receipt of a valid purchase order, with, in most cases, the Company paying the shipping costs. Sales of pharmaceutical products are final, and revenue is recognized at the time of shipment, which is when the risk of loss and responsibility for the shipment passes to the customer, and the performance obligation of the Company is satisfied. Pharmaceutical products are returnable only at the discretion of the Company unless (a) they are found to be defective; (b) the product is damaged in shipping; or (c) the product is outdated (but not more than one year after its expiration date, which is a return policy which conforms to standard pharmaceutical industry practice). The Company estimates an allowance for outdated material returns based on prior year historical returns of its pharmaceutical products.

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

Any 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. The Company has not experienced significant fluctuations between estimated allowances and actual activity. At September 30, 2023 and 2022, the Company had an allowance of $271,832 and $353,259, respectively, for possible outdated material returns, which is included in accrued expenses.

The Company has distribution fee contracts with certain distributors of its pharmaceutical products that entitle them to distribution and service-related fees. The Company estimates distribution fees and records distribution fees as offsets to revenue.

Disaggregated sales by product class are as follows:

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
Cosmetic ingredients	$	1,197,178	$	841,261	$	2,731,966	$	4,313,139
Pharmaceutical		1,196,393		1,159,367		3,927,218		3,622,964
Medical lubricants		663,947		384,548		1,567,363		1,904,424
Industrial products		-		31,846		51,594		95,030
Total Sales	$	3,057,518	$	2,417,022	$	8,278,141	$	9,935,557

The Company’s cosmetic ingredients are marketed worldwide by five distributors, of which U.S.-based Ashland Specialty Ingredients (“ASI”) purchases the largest volume. Approximately 26% of the Company’s total sales in the third quarter of 2023 were to customers located outside of the United States, compared with approximately 18% in the third quarter of 2022. For the nine months ended September 30, 2023, approximately 24% of the Company’s total sales were to customers located outside of the United States, compared with approximately 25% for the nine months ended September 30, 2022.

Disaggregated sales by geographic region are as follows:

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
United States*	$	2,247,677	$	1,969,907	$	6,257,453	$	7,403,752
Other countries		809,841		447,115		2,020,688		2,531,805
Total Sales	$	3,057,518	$	2,417,022	$	8,278,141	$	9,935,557

* Substantially all purchases by ASI are shipped to ASI’s warehouses in the U.S. As a result, all sales to ASI are reported as U.S. sales for financial reporting purposes, even though a significant quantity of those purchases will be shipped by ASI to foreign customers. ASI has reported to the Company that approximately 71% of its sales of the Company’s products in the third quarter of 2023 were to foreign customers compared with 60% for the same period in 2022, with China representing approximately 23% of those foreign sales in the third quarter of 2023, compared with approximately 37% in the third quarter of 2022.

Page 10 of 24

For the nine months ended September 30, 2023 approximately 69% of ASI’s sales of the Company’s products were to foreign customers, with China accounting for approximately 27% of ASI’s sales of the Company’s products, as compared with approximately 69% of ASI’s sales going to customers in other countries for the nine months ended September 30, 2022, with China accounting for approximately 42% of ASI’s sales of the Company’s products during that period.

7. Accounting for Financial Instruments – Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses. In accordance with this standard, the Company recognizes an allowance for credit losses for its trade receivables to present the net amount expected to 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 are based on Current Expected Credit Losses (CECL). Implementation of this standard did not have a material effect on the Company’s financial statements.

The 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 provides allowances for any receivables for which collection is doubtful in accordance with ASU 2016-13. As of September 30, 2023 and December 31, 2022, the allowance for credit losses was $28,613 and $20,063, respectively. Prompt-pay discounts are offered to some customers; however, due to the uncertainty of the customers taking the discounts, the discounts are recorded only after they have been taken.

8. Marketable Securities

Marketable securities include investments in fixed income and equity mutual funds and certificates of deposit. The Company’s mutual funds are reported at their fair values and the certificates of deposit are reported at amortized cost.

The disaggregated net gains and losses on the marketable securities recognized in the income statements for the three and nine months ended September 30, 2023 and 2022, respectively, are as follows:

	Three months ended September 30,						Nine months ended September 30,
		2023			2022			2023			2022
Net (losses) gains recognized during the period on marketable securities	$	(14,357	)	$	(300,526	)	$	65,823		$	(1,154,464	)
Less: Net losses recognized during the period on marketable securities sold during the period		-			-			(433,769	)		(207,936	)
Unrealized (losses) gains recognized during the reporting period on marketable securities still held at the reporting date	$	(14,357	)	$	(300,526	)	$	499,592		$	(946,528	)

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

•    Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•    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.

•    Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The 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:

September 30, 2023 (Unaudited)

	Cost		Fair Value		Unrealized Loss
Equity Securities:
Equity and other mutual funds	$	542,131	$	528,847	$	(13,284	)
Other short-term investments:
Fixed income certificates of deposit	$	400,000	$	400,000		-
Total marketable securities	$	942,131	$	928,847	$	(13,284	)

December 31, 2022 (Audited)

	Cost		Fair Value		Unrealized gain (loss)
Equity Securities
Fixed income mutual funds	$	5,449,227	$	4,924,497	$	(524,730	)
Equity and other mutual funds		717,165		729,019		11,854
Total equity securities		6,166,392		5,653,516		(512,876	)
Total marketable securities	$	6,166,392	$	5,653,516	$	(512,876	)

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

Proceeds from the sale and redemption of marketable securities amounted to $5,255,145 for the nine months ended September 30, 2023, which included realized losses of $433,769. Proceeds from the sale and redemption of marketable securities amounted to $1,658,293 for the nine months ended September 30, 2022, which included realized losses of $207,936.

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9. Inventories

	September 30,		December 31,
	2023		2022
	(UNAUDITED)		(AUDITED)
Inventories consist of the following:
Raw materials	$	591,407	$	601,125
Work in process		101,475		16,520
Finished products		535,194		1,054,367
Total inventories	$	1,228,076	$	1,672,012

Inventories are valued at the lower of cost and net realizable value. Cost is determined using the average cost method, which approximates cost determined by the first-in, first-out (“FIFO”) method. Finished product inventories at September 30, 2023 and December 31, 2022 are stated net of a reserve of $101,000 and $64,000, respectively, for slow moving and obsolete inventory.

10. Income Taxes

The Company’s tax provision is based on its estimated annual effective tax rate. The Company continues to fully recognize its tax benefits, and as of September 30, 2023 and December 31, 2022, the Company did not have any unrecognized tax benefits. The Company’s provision for income taxes for the three and nine months ended September 30, 2023 and 2022 includes the following:

	Three months ended September 30,					Nine months ended September 30,
		2023		2022			2023		2022
Provision for federal income taxes - current	$	152,350	$	305,772		$	317,128	$	761,429
Provision for state income taxes - current		-		-			250		100
Provision for (benefit from) federal income taxes – deferred		8,091		(217,091	)		158,544		(268,410	)
Total provision for income taxes	$	160,441	$	88,681		$	475,922	$	493,119

11. Defined Contribution Plan

The 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 that is deferred by the employee. Employees become fully vested in employer matching contributions immediately.

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

Page 13 of 24

The Company accrued $81,750 in contributions to the DC Plan for the nine months ended September 30, 2023 and September 30, 2022. In the first nine months of 2023, the Company made discretionary contributions of $ 94,326 to the DC Plan. This payment represented the remaining portion of the Company’s 2022 discretionary contribution. For the first nine months of 2022, the Company made discretionary contributions in the amount of $109,000 to the DC Plan.

12. Related-Party Transactions

For the three- and nine-month periods ended September 30, 2023, the Company made payments of $30,000 and $90,000, respectively, to Ken Globus, the Company’s former President, for consulting services provided to the Company. There were no payments made to Mr. Globus for consulting services in the corresponding periods in 2022.

For the three- and nine-month periods ended September 30, 2023, the Company made payments of $9,000 and $12,000, respectively, to the accounting firm PKF O’Connor Davies (“PKF”) for accounting and tax services. Lawrence Maietta, a partner at PKF, is a director of the Company. For the three-month period ended September 30, 2022, there were no payments made to PKF. For the nine-month period ended September 30, 2022, the Company made payments of $4,000 to PKF for accounting and tax services.

13. Other Information

Accrued Expenses

Accrued expenses consist of the following:

	September 30,		December 31,
	2023		2022
		(Unaudited)		(Audited)
Accrued Expenses
Bonuses	$	140,252	$	175,496
Distribution fees		409,742		395,536
Payroll and related expenses		95,313		53,475
Reserve for outdated material		271,832		369,154
Company 401(k) contribution		81,750		94,326
Audit fee		60,250		66,500
Annual report expenses		54,475		68,349
Sales rebates		123,784		80,926
Insurance		21,625		-
Other		27,143		18,294
Total Accrued Expenses	$	1,286,166	$	1,322,056

Page 14 of 24

14. Recent Accounting Pronouncements

In January 2023, the Company adopted ASU-2016-13 “Financial Instruments – Credit Losses.” This guidance introduces a new credit loss methodology, Current Expected Credit Losses (“CECL”), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The guidance requires organizations to measure all expected credit losses for financial instruments at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Implementation of this standard did not have a material effect on the Company’s financial statements.

15. Concentrations of Credit Risk

Customer concentration - Accounts receivable potentially exposes 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 and its overall credit worthiness to determine how much credit to allow or whether any 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 credit risk from accounts receivable is low.

For the three months ended September 30, 2023, one of the Company’s cosmetic ingredient distributors, and three of its pharmaceutical distributors, together accounted for 81% of the Company’s sales and 83% of its outstanding accounts receivable at September 30, 2023. During the three months ended September 30, 2022, the same cosmetic ingredient distributor and three pharmaceutical distributors together were responsible for 89% of the Company’s sales and 86% of its outstanding accounts receivable at September 30, 2022.

For the nine months ended September 30, 2023, one of the Company’s cosmetic ingredient distributors, and three of its pharmaceutical distributors, together accounted for 80% of the Company’s sales and 83% of its outstanding accounts receivable at September 30, 2023. During the nine months ended September 30, 2022, the same cosmetic ingredient distributor and three pharmaceutical distributors together were responsible for 78% of the Company’s sales and 86% of its outstanding accounts receivable at September 30, 2022.

Supplier concentration – For the nine months ended September 30, 2023, approximately 74% of the Company’s purchases were derived from two suppliers. For the nine months ended September 30, 2022, approximately 70% of the Company’s purchases were derived from the same two suppliers.

For the three months ended September 30, 2023, approximately 62% of the Company’s purchases were derived from two suppliers. For the three months ended September 30, 2022, approximately 80% of the Company’s purchases were derived from the same two suppliers.

16. Earnings Per Share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued.

Page 15 of 24

Per share basic and diluted earnings were $0.14 and $0.07 for the three months ended September 30, 2023 and 2022, respectively, and $0.40 and $0.41 for the nine months ended September 30, 2023 and 2022, respectively.

17. Subsequent Events

On October 10, 2023, the Company informed Ashland Specialty Ingredients (“ASI”), its largest cosmetic ingredients distributor, that it would like to renegotiate the current exclusive distribution agreement and in doing so provided Ashland with formal notification that it would not be renewing the existing distribution agreement in its current form. The agreement between the Company and ASI automatically renews every two years and is set to renew on January 1, 2024, unless notice of termination is given by either party no later than October 31, 2023. The Company has expressed that it has no intention of severing the relationship with ASI and that the purpose of the notification letter was to ensure that both parties have time to review the business agreement and determine what changes, if any, could be made to address the continued decline in sales of the Company’s products by ASI in certain regions.

On October 19,2023, the Company informed the U.S. Food and Drug Administration (the “FDA”) of a potential supply shortage of Renacidin. The Company was informed by Amsino Healthcare (USA), Inc. (“Amsino”) that they were temporarily ceasing the manufacture and supply of Renacidin as its facility underwent required maintenance and addressed several observations made by the FDA. Amsino currently anticipates that two outstanding purchase orders originally scheduled for December 5, 2023 and January 9, 2024 will now take place on or about February 2, 2024 and February 9, 2024 respectively. The Company has determined that it will likely exceed its current supply levels of Renacidin prior to the delivery dates provided by Amsino. In connection with the Company’s mandatory notice to the FDA regarding the shortage of Renacidin, the Company is taking every measure reasonably available to mitigate the impact caused by these delays.

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

FORWARD-LOOKING STATEMENTS

Statements made in this Form 10-Q which are not purely historical are forward-looking statements with respect to the goals, plans, objectives, intentions, expectations, financial condition, results of operations, future performance and business of the Company. Forward-looking statements may be identified by the use of such words as “believes”, “may”, “will”, “should”, “intends”, “plans”, “estimates”, “anticipates”, or other similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company’s control) could cause actual results to differ materially from those set forth in the forward-looking statements. In addition to those specific risks and uncertainties set forth in the Company's reports currently on file with the SEC, some other factors that may affect the future results of operations of the Company are: the development of products that may be superior to those of the Company; changes in the quality or composition of the Company's products; lack of market acceptance of the Company's products; changes in our distribution partners; the Company's ability to develop new products; general economic or industry conditions; changes in intellectual property rights; changes in interest rates; new legislation or regulatory requirements; conditions of the securities markets; the Company's ability to raise capital; changes in accounting principles, policies or guidelines; financial or political instability; acts of war or terrorism; and other economic, competitive, governmental, regulatory and technical factors that may affect the Company's operations, products, services and prices. Accordingly, results achieved may differ materially from those anticipated as a result of such forward-looking statements, and those statements speak only as of the date they are made.

The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

OVERVIEW

The Company is a Delaware corporation that, through its Guardian Laboratories division, manufactures and markets cosmetic ingredients, pharmaceuticals, and medical lubricants. Prior to July 1, 2023, the Company manufactured and reported sales from an industrial line of products; however, this product line was discontinued after the second quarter of 2023 due to low sales volume with no growth. The Company conducts various research and development activities. The Company’s research and development department modifies, refines, and expands the uses for existing products, with the goal of further developing the markets that its products are used in. The Company also develops new products with a focus on using natural and environmentally friendly raw materials, which is a priority for many of the Company’s cosmetic customers. All the products that the Company markets, except for Renacidin, are produced at its facility in Hauppauge, New York. Renacidin, a urological product, is manufactured for the Company by an outside contract manufacturer.

One of the Company’s most important product lines is its Lubrajel line of multifunctional water-based gel formulations, which are designed to provide sensory enhancement, lubrication, hydration, and texture to both personal care and medical products.

The Company’s cosmetic ingredients are marketed worldwide for cosmetic uses by five distributors, each handling a different geographic area, with the largest being U.S.-based ASI. In the last few years, to meet the growing demand for “green” and sustainable products, the Company has focused on developing and launching new products which only contain ingredients that are considered “natural”. The Lubrajel products in the new natural line have been certified by the Cosmetic Organic and Natural Standard (“COSMOS”). This standard is recognized globally by the cosmetic industry.

Renacidin and the Company’s other pharmaceutical product, Clorpactin® WCS-90, are distributed through full-line drug wholesalers and are currently marketed only in the United States. Those wholesalers in turn sell the products to pharmacies, hospitals, nursing homes, other long-term care facilities, and government agencies, primarily the VA. The Company promotes Renacidin through a dedicated website. Clorpactin WCS-90, as well as the Company’s other products, are marketed through information provided on the Company’s corporate website.

The Company’s medical lubricants, which consist of water-based gel formulations designed to provide sensory enhancement and lubrication mainly for medical device applications. Products are sold directly to medical devices customers and contract manufacturers.

Page 16 of 24

The Company does have competition in the marketplace for some of its products, particularly its cosmetic ingredients, as well as some of its pharmaceutical products and its medical lubricants. These competitive products are usually sold at a lower price than the Company’s products; however, they may not compare favorably to the level of performance and quality of the Company’s products.

The Company recognizes revenue when all of the following requirements are satisfied (a) persuasive evidence of a sales arrangement exists; (b) products are shipped, which is when the performance obligation is satisfied, and title and risk of loss pass to the customers; and (c) collections are reasonably assured. An allowance for returns, based on historical experience, is taken as a reduction of sales within the same period the revenue is recognized.

In recent years, the Company has elected to rely on trade secret protection to protect its intellectual property for proprietary product formulations and manufacturing methods. The Company will file for patent protection in situations where the Company believes that relying on trade secret protection alone would not provide sufficient protection. The Company owns the Lubrajel®, Renacidin®, and Clorpactin® trademarks.

The current Supply chain instability has not significantly affected the ability of the Company to obtain raw materials, but it has created longer lead times for some of them. While raw material prices have stabilized, the increases in raw material prices that the Company experienced during 2022 and early 2023, have negatively impacted the Company’s gross profit margins in the first half of 2023. As a result, the Company instituted price increases on many of its products to offset these increased raw material costs.

While inflation has lessened during 2023, any future increases in the inflation rate will likely increase raw material, shipping, and internal labor costs, which could negatively impact the Company’s future gross margins.

As a result of the residual effects of the coronavirus pandemic, including continued global supply chain instability and inflation, there continues to be uncertainty regarding the future impact of the coronavirus pandemic on the Company’s operations and financial results. The Company is unable to provide an accurate estimate or projection as to what the future impact will be on the Company’s operations and its financial performance going forward.

CRITICAL ACCOUNTING POLICIES

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the discussion and analysis of the Company’s financial condition and results of operations are based on its financial statements, which have been prepared in conformity with US GAAP. The preparation of those financial statements required the Company 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. The Company’s most critical accounting policies relate to revenue recognition, concentration of credit risk, investments, inventory, and income taxes. Since December 31, 2022, there have been no significant changes to the assumptions and estimates related to those critical accounting policies.

Page 17 of 24

The following discussion and analysis covers material changes in the financial condition of the Company since the year ended December 31, 2022, and a comparison of the results of operations for the third quarter of 2023 and 2022 and the first nine months of 2023 and 2022. This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis or Plan of Operation" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. All references in this quarterly report to “sales” or “Sales” shall mean “net sales” unless specifically identified as “gross sales”.

The Company recognizes revenue from sales of its cosmetic ingredients and medical lubricants when all of the following requirements are satisfied: (a) a valid purchase order has been received; (b) products are shipped, which is when the performance obligation is satisfied and title and risk of loss pass to the customers; and (c) future collection of the sale amount is reasonably assured. These products are shipped “Ex-Works” from the Company’s facility in Hauppauge, NY, and it is at this time that risk of loss and responsibility for the shipment passes to the customer. Sales of these products are deemed final, and there is no obligation on the part of the Company to repurchase or allow the return of these goods unless they are defective.

The Company’s pharmaceutical products are shipped via common carrier upon receipt of a valid purchase order, with, in most cases, the Company paying the shipping costs. The Company assumes responsibility for the shipment arriving at its intended destination. Sales of pharmaceutical products are final, and revenue is recognized at the time of shipment. Pharmaceutical products are returnable only at the discretion of the Company unless (a) they are found to be defective; (b) the product is damaged in shipping; or (c) the product is outdated (but not more than one year after their expiration date, which is a return policy which conforms to standard pharmaceutical industry practice). The Company estimates an allowance for outdated material returns based on gross sales of its pharmaceutical products.

In accordance with ASU-2016-13, the Company recognizes an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset.

RESULTS OF OPERATIONS

Net Sales

Net sales for the third quarter of 2023 increased by $640,496 (26%) when compared with the same period in 2022. Net sales for the first nine months of 2023 decreased by $1,657,416 (17%) as compared with the corresponding period in 2022. The increase in sales for the third quarter of 2023 and the decrease in sales for the first nine months of 2023 were attributable to changes in sales of the following product lines:

 Cosmetic ingredients:

a) Third quarter sales: For the third quarter of 2023, the Company’s sales of cosmetic ingredients increased by $355,917 (42%) when compared with the third quarter of 2022. The increase in third quarter sales was due primarily to an increase of $231,543 (31%) in net sales of the Company’s cosmetic products to ASI. Based on information provided to the Company by ASI, the majority of the increase in sales of the Company’s products were to customers in Europe and to a lesser extent customers in Latin America.

Page 18 of 24

Third quarter sales in 2023 to the Company’s four other distributors, as well as to two direct cosmetic ingredient customers, increased by a net of $124,374 (130%) compared with the third quarter of 2022. Sales to the Company’s cosmetic distributors in the United Kingdom, Switzerland, France, and two other direct customers increased by a total of $150,604 (241%), while sales to the Company’s distributor in Italy decreased by $26,230 (80%).

b) Nine-month sales: For the first nine months of 2023, the Company’s sales of cosmetic ingredients decreased by $1,581,173 (37%) when compared with the same period in 2022. This decrease was due primarily to a decrease of $1,332,936 (39%) in sales to ASI. Based on information provided to the Company by ASI, the decrease in sales to ASI during the first nine months of 2023 was due to 1) decreased demand for the Company’s cosmetic products in China due to slow post-COVID economic growth; 2) increased competition from lower-priced competitors, especially Asian producers; and 3) customers working off excess stock, maintaining lower inventory levels, and changing ordering patterns to just in time.   Cosmetic ingredient sales for the first nine months of the year to the Company’s four other cosmetic distributors, as well as to two direct cosmetic customers, decreased by a net of $248,237 (27%) compared with the same period in 2022. Nine-month sales to the Company’s cosmetic distributors in the UK and Italy decreased by $317,668 (55%), while sales to the Company’s distributors in France and Switzerland and two other direct customers increased by $69,431 (12%).

Pharmaceuticals:

Because there are fees, rebates and allowances associated with sales of the Company’s two pharmaceutical products, Renacidin and Clorpactin, discussion of the Company’s pharmaceutical sales includes references to both gross sales (before fees, rebates and allowances) and net sales (after fees, rebates and allowances).

Gross sales of the Company’s pharmaceutical products for the three-month period ended September 30, 2023 increased by $72,190 (5%) compared with the corresponding period in 2022, while gross sales for the nine-month period ended September 30, 2023 increased by $252,200 (6%). The increase in sales for the three-month period ended September 30, 2023 was due primarily to an increase of $38,851 (3%) in gross sales of Renacidin and an increase of $33,340 (18%) in gross sales of the Company’s other pharmaceutical product, Clorpactin WCS-90. For the nine-month period ended September 30, 2023, the increase was due to an increase in gross sales of Renacidin of $222,341 (6%) combined with an increase in gross sales of Clorpactin WCS-90, in the amount of $29,858 (5%). The Company typically experiences fluctuations in sales of its pharmaceutical products due to the timing of orders from its distributors. The Company will be investing additional resources to better understand the market for its pharmaceutical products.

The difference between the net sales increase compared with the gross sales increase for these products is due to a net increase in gross sales of those products combined with an increase in pharmaceutical sales allowances of $35,164 (12%) for the three-month period ended September 30, 2023, and a decrease in pharmaceutical sales allowances of $52,055 (8%) for the nine-month period ended September 30, 2023. These allowances typically have a direct relationship with the sales of the Company’s pharmaceutical products, however, for the nine-month period ended September 30, 2023, the decrease in sales allowances was primarily due to a decrease in outdated material returns allowances.

Page 19 of 24

Medical lubricants:

Sales of the Company’s medical lubricants increased by $279,399 (73%) for the three-month period ended September 30, 2023, compared with the same period in 2022, while sales for the nine-month period decreased by $337,061 (18%), compared with the same period in 2022. The increase in medical lubricant sales for the three-month period was primarily attributable to an increase in shipments to one of the Company’s larger direct medical lubricant customers located in India, combined with an increase in shipments to an existing customer in China whose orders have increased due to a new project utilizing one of the Company’s medical lubricants. The decrease in sales for the nine-month period was due to one of the Company’s other larger customers in China shifting order patterns due to slower destocking of product while China’s Zero-COVID mandate was in place.

Industrial and other products:

Sales of the Company's industrial products, as well as other miscellaneous products, decreased by $31,846 (100%) and by $43,436 (46%), respectively, for the three and nine months ended September 30, 2023, when compared with the corresponding periods in 2022. The decrease in sales for both periods was primarily due to the Company’s phase out of its industrial product line due to low sales volume with no growth. The second quarter of 2023 was the last period for which the Company reported sales of this product line.

Cost of Sales

Cost of sales as a percentage of sales increased to 57% in the third quarter of 2023, up from 45% in the third quarter of 2022. For the first nine months of 2023, cost of sales as a percentage of sales increased to 52%, up from 45% in 2022. The increases in both periods were a result of 1) increased raw material costs in 2023 compared with 2022; 2) increased freight costs in 2023 compared with 2022; 3) the increase in the percentage of the Company’s overall sales derived from the Company’s pharmaceutical products, which are sold at a lower profit margin than the Company’s other product lines; and 4) higher per unit overhead costs due to reduced production caused by lower demand for some of the Company’s products.

Operating Expenses

Operating expenses, consisting of selling and general and administrative expenses, decreased by $43,869 (8%) for the third quarter of 2023 compared with the equivalent period in 2022 and decreased by $118,808 (7%) for the first nine months of 2023, compared with the equivalent period in 2022. The decrease in operating expenses for both periods was due primarily to decreases in employee bonuses and depreciation expenses.

Research and Development Expenses

Research and development expenses decreased by $22,783 (19%) for the third quarter of 2023, and decreased by $11,027 (3%) for the first nine months of 2023 compared with the same periods in 2022. The decrease for the third quarter was primarily due to a decrease in payroll and payroll-related expenses.

Page 20 of 24

Investment Income

Investment income increased by $32,687 (70%) and by $35,859 (24%), respectively, for the three- and nine-month periods ending September 30, 2023, compared with the equivalent periods in 2022. During the first half of 2023, the Company repositioned its marketable securities portfolio and sold most of its equity and fixed income mutual funds. The proceeds from these sales were used to purchase U.S. Treasury Bills and certificates of deposit in order to take advantage of the increase in interest rates. The increase in investment income for the three- and nine-month periods during 2023 represents increased interest income in 2023 when compared with the dividend income recorded during 2022 from the Company’s mutual funds.

Net (Loss) Gain on Marketable Securities

For the three-month period ended September 30, 2023, the Company recorded net losses on its marketable securities portfolio in the amount of $14,357. For the nine-month period ended September 30, 2023, the Company recorded net gains on its marketable securities portfolio of $65,823. For the corresponding periods in 2022, the Company recorded net losses of $300,526 and $1,154,464, respectively. The reason for the fluctuations in both periods in 2023 was due to the following factors: 1) during 2022, the Company’s fixed income mutual funds (which made up approximately 90% of the investment portfolio) lost a significant amount of value due to increases in interest rates, and those unrealized losses were recorded during 2022; and 2) a majority of those mutual funds were sold during the second quarter of 2023, and while most of the losses had already been recorded in 2022, there were some increases in market value at the time of these sales, which created unrealized gains in that period.

As previously discussed, the Company repositioned its marketable securities portfolio in the first half of 2023 to take advantage of the increase in interest rates. The Company’s management and the Investment Committee of the Board of Directors continue to closely monitor the Company's investment portfolio and will make any adjustments they believe may be necessary or appropriate in order to minimize the future impact on the Company’s financial performance due to volatility of the global financial markets.

Provision for Income Taxes

The Company's effective income tax rate was approximately 21% for the first nine months of 2023 and 2022. The Company’s tax rate is expected to remain at 21% for the current fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

Working capital increased from $8,596,939 at December 31, 2022 to $10,142,001 at September 30, 2023, an increase of $1,545,062. The current ratio increased from 7.3 to 1 at December 31, 2022 to 7.9 to 1 at September 30, 2023. The increase in working capital and the current ratio was primarily due to increases in cash and cash equivalents, accounts receivable and prepaid income taxes.

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.

Page 21 of 24

The Company expects to incur costs of approximately $100,000 in connection with an upgrade to its building sprinkler system. This project is currently in process and the Company will be making progress payments throughout the remainder of 2023.

The Company generated cash from operations of $2,016,910 and $1,900,456 for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase in cash from operations was primarily due to a decrease in inventory and an increase in accounts payable, which was partially offset by an increase in accounts receivable.

Cash provided by investing activities for the nine-month period ended September 30, 2023 was $4,728,156. Cash used in investing activities for the nine-months ended September 30, 2022 was $235,751. The increase was due to an increase in the sales of the Company’s marketable securities in the first half of 2023 compared with 2022. The proceeds from these sales were primarily reinvested in short-term U.S. Treasury Bills, which are included in cash and cash equivalents.

Cash used in financing activities was $459,387 and $1,699,392 for the nine months ended September 30, 2023 and September 30, 2022, respectively. The decrease was due to a decrease in the dividends paid from $0.37 per share in 2022 to $0.10 per share in 2023.

The Company expects to continue to use its cash to make dividend payments, to purchase marketable securities, and to take advantage of growth opportunities that are in the best interest of the Company and its shareholders.

OFF BALANCE-SHEET ARRANGEMENTS

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.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

Item 4. CONTROLS AND PROCEDURES

(a) DISCLOSURE CONTROLS AND PROCEDURES 

The Company’s management, including its Principal Executive Officer and Chief 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 Chief 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 Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding disclosures.

Page 22 of 24

(b) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company's Principal Executive Officer and Chief 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.

PART II - OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

                     NONE

ITEM 1A.   RISK FACTORS

                  NONE

ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

                         NONE

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

                         NONE

ITEM 4.      MINE SAFETY DISCLOSURES

                         NONE

ITEM 5.      OTHER INFORMATION

                         NONE

Page 23 of 24

ITEM 6.      EXHIBITS

31.1*	Certification of Donna Vigilante, President and Principal Executive Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Andrea Young, Chief Financial Officer of the Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certifications of Principal Executive Officer and Chief Financial Officer of the Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (Embedded within the inline XBRL document and included in Exhibit 101.1).

* Filed herewith

SIGNATURES

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

Date: November 3, 2023	UNITED-GUARDIAN, INC.
	(Registrant)
	By:	/S/ DONNA VIGILANTE
		Donna Vigilante
		President
	By:	/S/ ANDREA YOUNG
		Andrea Young
		Chief Financial Officer

Page 24 of 24

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Donna Vigilante, certify that:

1. I have reviewed this Quarterly Report of United-Guardian, Inc. on Form 10-Q for the three-month period ended September 30, 2023;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 3, 2023	By:	/s/ Donna Vigilante
		Donna Vigilante
		President & Principal Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Andrea Young, certify that:

1. I have reviewed this Quarterly Report of United-Guardian, Inc. on Form 10-Q for the three-month period ended September 30, 2023;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 3, 2023	By:	/s/ Andrea Young
		Andrea Young
		Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of United-Guardian, Inc. (the "Company") on Form 10-Q for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission (the "Report"), I, Donna Vigilante, President and Principal Executive Officer of the Company, and I, Andrea Young, Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 3, 2023	By:	/s/ Donna Vigilante
		Donna Vigilante
		President & Principal Executive Officer

By:	/s/ Andrea Young
	Andrea Young
	Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Nov. 01, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	1-10526
Entity Registrant Name	UNITED-GUARDIAN, INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	11-1719724
Entity Address, Address Line One	230 Marcus Boulevard
Entity Address, City or Town	Hauppauge
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11788
City Area Code	631
Local Phone Number	273-0900
Title of 12(b) Security	Common Stock, $0.10 par value per share
Trading Symbol	UG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		4,594,319
Entity Central Index Key	0000101295
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net sales	$ 3,057,518	$ 2,417,022	$ 8,278,141	$ 9,935,557
Costs and expenses:
Cost of sales	1,749,041	1,076,035	4,272,043	4,479,905
Operating expenses	488,464	532,333	1,580,503	1,699,311
Research and development	98,141	120,924	353,829	364,856
Total costs and expenses	2,335,646	1,729,292	6,206,375	6,544,072
Income from operations	721,872	687,730	2,071,766	3,391,485
Other Income:
Investment income	79,682	46,995	182,264	146,405
Net (loss) gain on marketable securities	(14,357)	(300,526)	65,823	(1,154,464)
Total other income (expense)	65,325	(253,531)	248,087	(1,008,059)
Income before provision for income taxes	787,197	434,199	2,319,853	2,383,426
Provision for income taxes	160,441	88,681	475,922	493,119
Net income	$ 626,756	$ 345,518	$ 1,843,931	$ 1,890,307
Earnings per common share
(Basic and Diluted) (in dollars per share)	$ 0.14	$ 0.07	$ 0.40	$ 0.41
Weighted average shares – basic and diluted (in shares)	4,594,319	4,594,319	4,594,319	4,594,319

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Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 7,116,131	$ 830,452
Marketable securities	928,847	5,653,516
Accounts receivable, net of allowance for credit losses of $28,613 at September 30, 2023 and $20,063 at December 31, 2022	1,816,242	1,427,576
Inventories, net	1,228,076	1,672,012
Prepaid expenses and other current assets	132,699	201,846
Prepaid income taxes	393,636	185,228
Total current assets	11,615,631	9,970,630
Deferred income taxes	0	110,544
Net property, plant, and equipment:
Land	69,000	69,000
Factory equipment and fixtures	4,615,387	4,585,055
Building and improvements	2,937,746	2,895,742
Total property, plant, and equipment	7,622,133	7,549,797
Less: Accumulated depreciation	7,064,991	6,990,636
Total property, plant, and equipment, net	557,142	559,161
TOTAL ASSETS	12,172,773	10,640,335
Current liabilities:
Accounts payable	166,199	30,415
Accrued expenses	1,286,166	1,322,056
Dividends payable	21,265	21,220
Total current liabilities	1,473,630	1,373,691
Deferred income taxes	48,000	0
Commitments and Contingencies
Stockholders’ equity:
Common stock (at $.10 par value) (10,000,000 shares authorized; 4,594,319 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively)	459,432	459,432
Retained earnings	10,191,711	8,807,212
Total stockholders’ equity	10,651,143	9,266,644
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 12,172,773	$ 10,640,335

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Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accounts Receivable, Allowance for Credit Loss, Current	$ 28,613	$ 20,063
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.10
Common Stock, Shares Authorized (in shares)	10,000,000	10,000,000
Common Stock, Shares, Outstanding (in shares)	4,594,319	4,594,319
Common Stock, Shares, Issued (in shares)	4,594,319	4,594,319

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Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member] Dividend Paid [Member]	Common Stock [Member]	Retained Earnings [Member] Dividend Paid [Member]	Retained Earnings [Member]	Dividend Paid [Member]	Total
Balance (in shares) at Dec. 31, 2021		4,594,319
Balance at Dec. 31, 2021		$ 459,432		$ 9,361,837		$ 9,821,269
Net income				911,465		911,465
Balance (in shares) at Mar. 31, 2022		4,594,319
Balance at Mar. 31, 2022		$ 459,432		10,273,202		10,732,734
Balance (in shares) at Dec. 31, 2021		4,594,319
Balance at Dec. 31, 2021		$ 459,432		9,361,837		9,821,269
Net income						1,890,307
Dividends						(506)
Balance (in shares) at Sep. 30, 2022		4,594,319
Balance at Sep. 30, 2022		$ 459,432		9,552,246		10,011,678
Balance (in shares) at Mar. 31, 2022		4,594,319
Balance at Mar. 31, 2022		$ 459,432		10,273,202		10,732,734
Net income				633,324		633,324
Dividends			$ (1,699,392)	(506)	$ (1,699,392)	(506)
Balance (in shares) at Jun. 30, 2022		4,594,319
Balance at Jun. 30, 2022		$ 459,432		9,206,728		9,666,160
Net income		$ 0		345,518		345,518
Balance (in shares) at Sep. 30, 2022		4,594,319
Balance at Sep. 30, 2022		$ 459,432		9,552,246		10,011,678
Balance (in shares) at Dec. 31, 2022		4,594,319
Balance at Dec. 31, 2022		$ 459,432		8,807,212		9,266,644
Net income				756,081		756,081
Balance (in shares) at Mar. 31, 2023		4,594,319
Balance at Mar. 31, 2023		$ 459,432		9,563,293		10,022,725
Balance (in shares) at Dec. 31, 2022		4,594,319
Balance at Dec. 31, 2022		$ 459,432		8,807,212		9,266,644
Net income						1,843,931
Dividends						(45)
Balance (in shares) at Sep. 30, 2023		4,594,319
Balance at Sep. 30, 2023		$ 459,432		10,191,711		10,651,143
Balance (in shares) at Mar. 31, 2023		4,594,319
Balance at Mar. 31, 2023		$ 459,432		9,563,293		10,022,725
Net income				461,094		461,094
Balance (in shares) at Jun. 30, 2023		4,594,319
Balance at Jun. 30, 2023		$ 459,432		10,024,387		10,483,819
Net income		0		626,756		626,756
Dividends	$ 0	$ 0	$ (459,387)	(45)	$ (459,387)	(45)
Balance (in shares) at Sep. 30, 2023		4,594,319
Balance at Sep. 30, 2023		$ 459,432		$ 10,191,711		$ 10,651,143

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Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2022
Dividend Paid [Member]
Common Stock, Dividends, Per Share, Cash Paid (in dollars per share)	$ 0.10
Common Stock, Dividends, Per Share, Cash Paid (in dollars per share)	$ 0.10	$ 0.37

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Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income	$ 1,843,931	$ 1,890,307
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	74,355	102,851
Net (gain) loss on marketable securities	(65,823)	1,154,464
Gain on sale of equipment	(10,000)	0
Allowance for credit losses	8,550	(1,851)
Allowance for obsolete inventory	37,000	0
Deferred income taxes	158,544	(268,410)
(Increase) decrease in operating assets:
Accounts receivable	(397,216)	688,187
Inventories	406,936	(883,825)
Prepaid expenses and other current assets	69,147	43,325
Prepaid income taxes	(208,408)	(150,633)
Increase (decrease) in operating liabilities:
Accounts payable	135,784	(314,304)
Accrued expenses	(35,890)	(80,753)
Income taxes payable	0	(88,738)
Deferred revenue	0	(190,164)
Net cash provided by operating activities	2,016,910	1,900,456
Cash flows from investing activities:
Acquisition of property, plant and equipment	(72,336)	(60,165)
Proceeds from sale of equipment	10,000	0
Proceeds from sale of marketable securities	5,255,145	1,658,293
Purchases of marketable securities	(464,653)	(1,833,879)
Net cash provided by (used in) investing activities	4,728,156	(235,751)
Cash flows from financing activities:
Dividends paid	(459,387)	(1,699,392)
Net cash used in financing activities	(459,387)	(1,699,392)
Net increase (decrease) in cash and cash equivalents	6,285,679	(34,687)
Cash and cash equivalents at beginning of period	830,452	531,213
Cash and cash equivalents at end of period	7,116,131	496,526
Supplemental disclosure of cash flow information:
Taxes paid	525,000	1,000,000
Supplemental disclosure of non-cash items:
Dividends payable	$ 45	$ 506

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Note 1 - Nature of Business

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

1. Nature of Business

United-Guardian, Inc. (“Registrant” or “Company”) is a Delaware corporation that, through its Guardian Laboratories division, manufactures and markets cosmetic ingredients, pharmaceuticals, and medical lubricants. Prior to July 1, 2023, the Company manufactured and reported sales of an industrial line of products; however, this product line was discontinued after the second quarter of 2023 due to low sales volume with no growth. The Company conducts research and product development and modifies, refines, and expands the uses for existing products, with the goal of further developing the market for its products. The Company also develops new products using natural and environmentally friendly raw materials, which is a priority for many of the Company’s cosmetic customers.

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Note 2 - Basis of Presentation

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Basis of Accounting [Text Block]

2. Basis of Presentation

Interim condensed financial statements of the Company are prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for interim financial information, pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods have been included. The results of operations for the three and nine months ended September 30, 2023 (also referred to as the "third quarter of 2023" and the "first nine months of 2023", respectively) are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2023. The interim unaudited condensed financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

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Note 3 - Impact of the Coronavirus Pandemic, Global Supply Chain Instability, and Inflation

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Impact of Coronavirus (COVID-19) [Text Block]

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

There continues to be residual impact on the Company’s business and financial performance from the coronavirus pandemic. In particular, there has been decreased demand for the Company’s Lubrajel® products in China as a result of (a) slower than expected post-COVID economic recovery in China; (b) increased competition from lower-priced competitors, especially those from Asian producers; and (c) slower destocking rate while the zero-COVID mandate was in effect in China for much of 2022.

As a result of the ongoing supply chain instability, the Company has experienced longer lead times for many of its raw materials. While raw material prices have stabilized, the increases in raw material prices that the Company experienced during 2022 and early 2023, have negatively impacted the Company’s gross profit margins in the first half of 2023. As a result, the Company instituted price increases on many of its products to offset these increased raw material costs.

While inflation has lessened during 2023, any future increases in the inflation rate will likely increase raw material costs, shipping costs, and internal labor costs, which could negatively impact the Company’s future gross margins.

With the residual effects of the coronavirus pandemic, combined with global supply chain instability and inflation, there continues to be uncertainty regarding the potential impact on the Company’s operations and its financial results. As a result the Company is unable to provide an accurate estimate or projection as to what the future impact will be on the Company’s operations and its financial performance going forward.

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Note 4 - Use of Estimates

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Use of Estimates Disclosure [Text Block]

4. Use of Estimates

In preparing financial statements in conformity with 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, as well as revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimated items include the allowance for bad debts, reserve for inventory obsolescence, accrued distribution fees, outdated material returns, possible impairment of marketable securities, and the allocation of overhead.

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Note 5 - Cash and Cash Equivalents

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Cash and Cash Equivalents Disclosure [Text Block]

5. Cash and Cash Equivalents

For 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 on United States Treasury Bills. 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 September 30, 2023 and December 31, 2022, $664,879 and $105,000, respectively, exceeded the FDIC limit.

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

		September 30,		December 31,
		2023		2022
Demand deposits	$	396,540	$	314,685
Certificates of Deposit (original 3-month maturity)		500,000		---
Money market funds		514,017		18,590
U.S. Treasury Bills (original 3-month maturity)		5,705,574		497,177
Total cash and cash equivalents	$	7,116,131	$	830,452

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Note 6 - Revenue Recognition

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

6. Revenue Recognition

The 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.

The 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 participation in Medicare programs, distribution fees, discounts, and outdated product returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on sales for a reporting period.

During 2023 and 2022, the Company participated in various government drug rebate programs related to the sale of Renacidin®, its most important pharmaceutical product. These programs include the Veterans Affairs Federal Supply Schedule (FSS), and the Medicare Part D Coverage Gap Discount Program (CGDP). These programs require the Company to sell its product at a discounted price. The Company’s sales, as reported, are net of these product rebates and discounts, some of which are estimated, and are recorded in the same period that the revenue is recognized.

The Company recognizes revenue from sales of its cosmetic ingredients and medical lubricants when those products are shipped, as long as a valid purchase order has been received and future collection of the sale amount is reasonably assured. These products are shipped “Ex-Works” from the Company’s facility in Hauppauge, NY, and it is at this time that risk of loss and responsibility for the shipment passes to the customer and the Company’s performance obligation is satisfied. Sales of these products are deemed final, and there is no obligation on the part of the Company to repurchase or allow the return of these goods unless they are defective.

The Company’s pharmaceutical products are shipped via common carrier upon receipt of a valid purchase order, with, in most cases, the Company paying the shipping costs. Sales of pharmaceutical products are final, and revenue is recognized at the time of shipment, which is when the risk of loss and responsibility for the shipment passes to the customer, and the performance obligation of the Company is satisfied. Pharmaceutical products are returnable only at the discretion of the Company unless (a) they are found to be defective; (b) the product is damaged in shipping; or (c) the product is outdated (but not more than one year after its expiration date, which is a return policy which conforms to standard pharmaceutical industry practice). The Company estimates an allowance for outdated material returns based on prior year historical returns of its pharmaceutical products.

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

Any 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. The Company has not experienced significant fluctuations between estimated allowances and actual activity. At September 30, 2023 and 2022, the Company had an allowance of $271,832 and $353,259, respectively, for possible outdated material returns, which is included in accrued expenses.

The Company has distribution fee contracts with certain distributors of its pharmaceutical products that entitle them to distribution and service-related fees. The Company estimates distribution fees and records distribution fees as offsets to revenue.

Disaggregated sales by product class are as follows:

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
Cosmetic ingredients	$	1,197,178	$	841,261	$	2,731,966	$	4,313,139
Pharmaceutical		1,196,393		1,159,367		3,927,218		3,622,964
Medical lubricants		663,947		384,548		1,567,363		1,904,424
Industrial products		-		31,846		51,594		95,030
Total Sales	$	3,057,518	$	2,417,022	$	8,278,141	$	9,935,557

The Company’s cosmetic ingredients are marketed worldwide by five distributors, of which U.S.-based Ashland Specialty Ingredients (“ASI”) purchases the largest volume. Approximately 26% of the Company’s total sales in the third quarter of 2023 were to customers located outside of the United States, compared with approximately 18% in the third quarter of 2022. For the nine months ended September 30, 2023, approximately 24% of the Company’s total sales were to customers located outside of the United States, compared with approximately 25% for the nine months ended September 30, 2022.

Disaggregated sales by geographic region are as follows:

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
United States*	$	2,247,677	$	1,969,907	$	6,257,453	$	7,403,752
Other countries		809,841		447,115		2,020,688		2,531,805
Total Sales	$	3,057,518	$	2,417,022	$	8,278,141	$	9,935,557

* Substantially all purchases by ASI are shipped to ASI’s warehouses in the U.S. As a result, all sales to ASI are reported as U.S. sales for financial reporting purposes, even though a significant quantity of those purchases will be shipped by ASI to foreign customers. ASI has reported to the Company that approximately 71% of its sales of the Company’s products in the third quarter of 2023 were to foreign customers compared with 60% for the same period in 2022, with China representing approximately 23% of those foreign sales in the third quarter of 2023, compared with approximately 37% in the third quarter of 2022.

For the nine months ended September 30, 2023 approximately 69% of ASI’s sales of the Company’s products were to foreign customers, with China accounting for approximately 27% of ASI’s sales of the Company’s products, as compared with approximately 69% of ASI’s sales going to customers in other countries for the nine months ended September 30, 2022, with China accounting for approximately 42% of ASI’s sales of the Company’s products during that period.

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Note 7 - Accounting for Financial Instruments - Credit Losses

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Credit Loss, Financial Instrument [Text Block]

7. Accounting for Financial Instruments – Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses. In accordance with this standard, the Company recognizes an allowance for credit losses for its trade receivables to present the net amount expected to 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 are based on Current Expected Credit Losses (CECL). Implementation of this standard did not have a material effect on the Company’s financial statements.

The 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 provides allowances for any receivables for which collection is doubtful in accordance with ASU 2016-13. As of September 30, 2023 and December 31, 2022, the allowance for credit losses was $28,613 and $20,063, respectively. Prompt-pay discounts are offered to some customers; however, due to the uncertainty of the customers taking the discounts, the discounts are recorded only after they have been taken.

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Note 8 - Marketable Securities

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

8. Marketable Securities

Marketable securities include investments in fixed income and equity mutual funds and certificates of deposit. The Company’s mutual funds are reported at their fair values and the certificates of deposit are reported at amortized cost.

The disaggregated net gains and losses on the marketable securities recognized in the income statements for the three and nine months ended September 30, 2023 and 2022, respectively, are as follows:

	Three months ended September 30,						Nine months ended September 30,
		2023			2022			2023			2022
Net (losses) gains recognized during the period on marketable securities	$	(14,357	)	$	(300,526	)	$	65,823		$	(1,154,464	)
Less: Net losses recognized during the period on marketable securities sold during the period		-			-			(433,769	)		(207,936	)
Unrealized (losses) gains recognized during the reporting period on marketable securities still held at the reporting date	$	(14,357	)	$	(300,526	)	$	499,592		$	(946,528	)

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

•    Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•    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.

•    Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The 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:

September 30, 2023 (Unaudited)

	Cost		Fair Value		Unrealized Loss
Equity Securities:
Equity and other mutual funds	$	542,131	$	528,847	$	(13,284	)
Other short-term investments:
Fixed income certificates of deposit	$	400,000	$	400,000		-
Total marketable securities	$	942,131	$	928,847	$	(13,284	)

December 31, 2022 (Audited)

	Cost		Fair Value		Unrealized gain (loss)
Equity Securities
Fixed income mutual funds	$	5,449,227	$	4,924,497	$	(524,730	)
Equity and other mutual funds		717,165		729,019		11,854
Total equity securities		6,166,392		5,653,516		(512,876	)
Total marketable securities	$	6,166,392	$	5,653,516	$	(512,876	)

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

Proceeds from the sale and redemption of marketable securities amounted to $5,255,145 for the nine months ended September 30, 2023, which included realized losses of $433,769. Proceeds from the sale and redemption of marketable securities amounted to $1,658,293 for the nine months ended September 30, 2022, which included realized losses of $207,936.

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Note 9 - Inventories

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Inventory Disclosure [Text Block]

9. Inventories

	September 30,		December 31,
	2023		2022
	(UNAUDITED)		(AUDITED)
Inventories consist of the following:
Raw materials	$	591,407	$	601,125
Work in process		101,475		16,520
Finished products		535,194		1,054,367
Total inventories	$	1,228,076	$	1,672,012

Inventories are valued at the lower of cost and net realizable value. Cost is determined using the average cost method, which approximates cost determined by the first-in, first-out (“FIFO”) method. Finished product inventories at September 30, 2023 and December 31, 2022 are stated net of a reserve of $101,000 and $64,000, respectively, for slow moving and obsolete inventory.

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Note 10 - Income Taxes

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10. Income Taxes

The Company’s tax provision is based on its estimated annual effective tax rate. The Company continues to fully recognize its tax benefits, and as of September 30, 2023 and December 31, 2022, the Company did not have any unrecognized tax benefits. The Company’s provision for income taxes for the three and nine months ended September 30, 2023 and 2022 includes the following:

	Three months ended September 30,					Nine months ended September 30,
		2023		2022			2023		2022
Provision for federal income taxes - current	$	152,350	$	305,772		$	317,128	$	761,429
Provision for state income taxes - current		-		-			250		100
Provision for (benefit from) federal income taxes – deferred		8,091		(217,091	)		158,544		(268,410	)
Total provision for income taxes	$	160,441	$	88,681		$	475,922	$	493,119

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Note 11 - Defined Contribution Plan

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Retirement Benefits [Text Block]

11. Defined Contribution Plan

The 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 that is deferred by the employee. Employees become fully vested in employer matching contributions immediately.

The Company also makes discretionary contributions to each employee's account based on a "pay-to-pay" safe-harbor formula that qualifies the 401(k) Plan under current IRS regulations. Employees become vested in the discretionary contributions as follows: 20% after two years of employment, and 20% for each year of employment thereafter until the employee becomes fully vested after six years of employment.

The Company accrued $81,750 in contributions to the DC Plan for the nine months ended September 30, 2023 and September 30, 2022. In the first nine months of 2023, the Company made discretionary contributions of $ 94,326 to the DC Plan. This payment represented the remaining portion of the Company’s 2022 discretionary contribution. For the first nine months of 2022, the Company made discretionary contributions in the amount of $109,000 to the DC Plan.

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Note 12 - Related-party Transactions

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

12. Related-Party Transactions

For the three- and nine-month periods ended September 30, 2023, the Company made payments of $30,000 and $90,000, respectively, to Ken Globus, the Company’s former President, for consulting services provided to the Company. There were no payments made to Mr. Globus for consulting services in the corresponding periods in 2022.

For the three- and nine-month periods ended September 30, 2023, the Company made payments of $9,000 and $12,000, respectively, to the accounting firm PKF O’Connor Davies (“PKF”) for accounting and tax services. Lawrence Maietta, a partner at PKF, is a director of the Company. For the three-month period ended September 30, 2022, there were no payments made to PKF. For the nine-month period ended September 30, 2022, the Company made payments of $4,000 to PKF for accounting and tax services.

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Note 13 - Other Information

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

13. Other Information

Accrued Expenses

Accrued expenses consist of the following:

	September 30,		December 31,
	2023		2022
		(Unaudited)		(Audited)
Accrued Expenses
Bonuses	$	140,252	$	175,496
Distribution fees		409,742		395,536
Payroll and related expenses		95,313		53,475
Reserve for outdated material		271,832		369,154
Company 401(k) contribution		81,750		94,326
Audit fee		60,250		66,500
Annual report expenses		54,475		68,349
Sales rebates		123,784		80,926
Insurance		21,625		-
Other		27,143		18,294
Total Accrued Expenses	$	1,286,166	$	1,322,056

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Note 14 - Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

14. Recent Accounting Pronouncements

In January 2023, the Company adopted ASU-2016-13 “Financial Instruments – Credit Losses.” This guidance introduces a new credit loss methodology, Current Expected Credit Losses (“CECL”), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The guidance requires organizations to measure all expected credit losses for financial instruments at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Implementation of this standard did not have a material effect on the Company’s financial statements.

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Note 15 - Concentrations of Credit Risk

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

15. Concentrations of Credit Risk

Customer concentration - Accounts receivable potentially exposes 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 and its overall credit worthiness to determine how much credit to allow or whether any 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 credit risk from accounts receivable is low.

For the three months ended September 30, 2023, one of the Company’s cosmetic ingredient distributors, and three of its pharmaceutical distributors, together accounted for 81% of the Company’s sales and 83% of its outstanding accounts receivable at September 30, 2023. During the three months ended September 30, 2022, the same cosmetic ingredient distributor and three pharmaceutical distributors together were responsible for 89% of the Company’s sales and 86% of its outstanding accounts receivable at September 30, 2022.

For the nine months ended September 30, 2023, one of the Company’s cosmetic ingredient distributors, and three of its pharmaceutical distributors, together accounted for 80% of the Company’s sales and 83% of its outstanding accounts receivable at September 30, 2023. During the nine months ended September 30, 2022, the same cosmetic ingredient distributor and three pharmaceutical distributors together were responsible for 78% of the Company’s sales and 86% of its outstanding accounts receivable at September 30, 2022.

Supplier concentration – For the nine months ended September 30, 2023, approximately 74% of the Company’s purchases were derived from two suppliers. For the nine months ended September 30, 2022, approximately 70% of the Company’s purchases were derived from the same two suppliers.

For the three months ended September 30, 2023, approximately 62% of the Company’s purchases were derived from two suppliers. For the three months ended September 30, 2022, approximately 80% of the Company’s purchases were derived from the same two suppliers.

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Note 16 - Earnings Per Share

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

16. Earnings Per Share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued.

Per share basic and diluted earnings were $0.14 and $0.07 for the three months ended September 30, 2023 and 2022, respectively, and $0.40 and $0.41 for the nine months ended September 30, 2023 and 2022, respectively.

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Note 17 - Subsequent Events

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

17. Subsequent Events

On October 10, 2023, the Company informed Ashland Specialty Ingredients (“ASI”), its largest cosmetic ingredients distributor, that it would like to renegotiate the current exclusive distribution agreement and in doing so provided Ashland with formal notification that it would not be renewing the existing distribution agreement in its current form. The agreement between the Company and ASI automatically renews every two years and is set to renew on January 1, 2024, unless notice of termination is given by either party no later than October 31, 2023. The Company has expressed that it has no intention of severing the relationship with ASI and that the purpose of the notification letter was to ensure that both parties have time to review the business agreement and determine what changes, if any, could be made to address the continued decline in sales of the Company’s products by ASI in certain regions.

On October 19,2023, the Company informed the U.S. Food and Drug Administration (the “FDA”) of a potential supply shortage of Renacidin. The Company was informed by Amsino Healthcare (USA), Inc. (“Amsino”) that they were temporarily ceasing the manufacture and supply of Renacidin as its facility underwent required maintenance and addressed several observations made by the FDA. Amsino currently anticipates that two outstanding purchase orders originally scheduled for December 5, 2023 and January 9, 2024 will now take place on or about February 2, 2024 and February 9, 2024 respectively. The Company has determined that it will likely exceed its current supply levels of Renacidin prior to the delivery dates provided by Amsino. In connection with the Company’s mandatory notice to the FDA regarding the shortage of Renacidin, the Company is taking every measure reasonably available to mitigate the impact caused by these delays.

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Note 5 - Cash and Cash Equivalents (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Cash and Cash Equivalents [Table Text Block]

		September 30,		December 31,
		2023		2022
Demand deposits	$	396,540	$	314,685
Certificates of Deposit (original 3-month maturity)		500,000		---
Money market funds		514,017		18,590
U.S. Treasury Bills (original 3-month maturity)		5,705,574		497,177
Total cash and cash equivalents	$	7,116,131	$	830,452

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Note 6 - Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Disaggregation of Revenue [Table Text Block]

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
Cosmetic ingredients	$	1,197,178	$	841,261	$	2,731,966	$	4,313,139
Pharmaceutical		1,196,393		1,159,367		3,927,218		3,622,964
Medical lubricants		663,947		384,548		1,567,363		1,904,424
Industrial products		-		31,846		51,594		95,030
Total Sales	$	3,057,518	$	2,417,022	$	8,278,141	$	9,935,557

Revenue from External Customers by Geographic Areas [Table Text Block]

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
United States*	$	2,247,677	$	1,969,907	$	6,257,453	$	7,403,752
Other countries		809,841		447,115		2,020,688		2,531,805
Total Sales	$	3,057,518	$	2,417,022	$	8,278,141	$	9,935,557

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Note 8 - Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Gain (Loss) on Securities [Table Text Block]

	Three months ended September 30,						Nine months ended September 30,
		2023			2022			2023			2022
Net (losses) gains recognized during the period on marketable securities	$	(14,357	)	$	(300,526	)	$	65,823		$	(1,154,464	)
Less: Net losses recognized during the period on marketable securities sold during the period		-			-			(433,769	)		(207,936	)
Unrealized (losses) gains recognized during the reporting period on marketable securities still held at the reporting date	$	(14,357	)	$	(300,526	)	$	499,592		$	(946,528	)

Marketable Securities [Table Text Block]

	Cost		Fair Value		Unrealized Loss
Equity Securities:
Equity and other mutual funds	$	542,131	$	528,847	$	(13,284	)
Other short-term investments:
Fixed income certificates of deposit	$	400,000	$	400,000		-
Total marketable securities	$	942,131	$	928,847	$	(13,284	)

	Cost		Fair Value		Unrealized gain (loss)
Equity Securities
Fixed income mutual funds	$	5,449,227	$	4,924,497	$	(524,730	)
Equity and other mutual funds		717,165		729,019		11,854
Total equity securities		6,166,392		5,653,516		(512,876	)
Total marketable securities	$	6,166,392	$	5,653,516	$	(512,876	)

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Note 9 - Inventories (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30,		December 31,
	2023		2022
	(UNAUDITED)		(AUDITED)
Inventories consist of the following:
Raw materials	$	591,407	$	601,125
Work in process		101,475		16,520
Finished products		535,194		1,054,367
Total inventories	$	1,228,076	$	1,672,012

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Note 10 - Income Taxes (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three months ended September 30,					Nine months ended September 30,
		2023		2022			2023		2022
Provision for federal income taxes - current	$	152,350	$	305,772		$	317,128	$	761,429
Provision for state income taxes - current		-		-			250		100
Provision for (benefit from) federal income taxes – deferred		8,091		(217,091	)		158,544		(268,410	)
Total provision for income taxes	$	160,441	$	88,681		$	475,922	$	493,119

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Note 13 - Other Information (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	September 30,		December 31,
	2023		2022
		(Unaudited)		(Audited)
Accrued Expenses
Bonuses	$	140,252	$	175,496
Distribution fees		409,742		395,536
Payroll and related expenses		95,313		53,475
Reserve for outdated material		271,832		369,154
Company 401(k) contribution		81,750		94,326
Audit fee		60,250		66,500
Annual report expenses		54,475		68,349
Sales rebates		123,784		80,926
Insurance		21,625		-
Other		27,143		18,294
Total Accrued Expenses	$	1,286,166	$	1,322,056

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Note 5 - Cash and Cash Equivalents (Details Textual) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Cash, Uninsured Amount	$ 664,879	$ 105,000

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Note 5 - Cash and Cash Equivalents - Schedule of Cash and Cash Equivalents (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Certificates of Deposit (original 3-month maturity)	$ 500,000	$ 0
Money market funds	514,017	18,590
U.S. Treasury Bills (original 3-month maturity)	5,705,574	497,177
Total cash and cash equivalents	7,116,131	830,452
Demand Deposits [Member]
Demand deposits	$ 396,540	$ 314,685

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Note 6 - Revenue Recognition (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounts Receivable, Allowance for Credit Loss	$ 271,832	$ 353,259	$ 271,832	$ 353,259
Cosmetic Ingredients [Member] | Non-US [Member] | Geographic Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration Risk, Percentage	26.00%	18.00%	24.00%	25.00%
ASI [Member] | Non-US [Member] | Geographic Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration Risk, Percentage	71.00%	23.00%	69.00%	69.00%
ASI [Member] | CHINA | Geographic Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration Risk, Percentage	60.00%	37.00%	27.00%	42.00%

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Note 6 - Revenue Recognition - Disaggregated Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net Sales	$ 3,057,518	$ 2,417,022	$ 8,278,141	$ 9,935,557
Cosmetic Ingredients [Member]
Net Sales	1,197,178	841,261	2,731,966	4,313,139
Pharmaceuticals [Member]
Net Sales	1,196,393	1,159,367	3,927,218	3,622,964
Medical [Member]
Net Sales	663,947	384,548	1,567,363	1,904,424
Industrial And Other [Member]
Net Sales	$ 0	$ 31,846	$ 51,594	$ 95,030

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Note 6 - Revenue Recognition - Revenue by Geographic Region (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net Sales		$ 3,057,518	$ 2,417,022	$ 8,278,141	$ 9,935,557
UNITED STATES
Net Sales	[1]	2,247,677	1,969,907	6,257,453	7,403,752
Non-US [Member]
Net Sales		$ 809,841	$ 447,115	$ 2,020,688	$ 2,531,805

[1] * Substantially all purchases by ASI are shipped to ASI’s warehouses in the U.S. As a result, all sales to ASI are reported as U.S. sales for financial reporting purposes, even though a significant quantity of those purchases will be shipped by ASI to foreign customers. ASI has reported to the Company that approximately 71% of its sales of the Company’s products in the third quarter of 2023 were to foreign customers compared with 60% for the same period in 2022, with China representing approximately 23% of those foreign sales in the third quarter of 2023, compared with approximately 37% in the third quarter of 2022

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Note 7 - Accounting for Financial Instruments - Credit Losses (Details Textual) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accounts Receivable, Allowance for Credit Loss, Current	$ 28,613	$ 20,063

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Note 8 - Marketable Securities (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Proceeds from Sale and Maturity of Marketable Securities			$ 5,255,145	$ 1,658,293
Debt and Equity Securities, Realized Gain (Loss), Total	$ 0	$ 0	$ 433,769	$ 207,936

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Note 8 - Marketable Securities - Net Gains and Losses on Marketable Securities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net (losses) gains recognized during the period on marketable securities	$ (14,357)	$ (300,526)	$ 65,823	$ (1,154,464)
Less: Net losses recognized during the period on marketable securities sold during the period	0	0	(433,769)	(207,936)
Unrealized (losses) gains recognized during the reporting period on marketable securities still held at the reporting date	$ (14,357)	$ (300,526)	$ 499,592	$ (946,528)

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Note 8 - Marketable Securities - Summary of Investments (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Equity securities, cost		$ 6,166,392
Equity securities		5,653,516
Equity securities, unrealized loss		(512,876)
Fixed income certificates of deposit, cost	$ 400,000
Fixed income certificates of deposit, fair value	400,000
Fixed income certificates of deposit, unrealized loss	0
Marketable securities, cost	942,131	6,166,392
Marketable securities	928,847	5,653,516
Marketable securities, unrealized loss	(13,284)	(512,876)
Fixed Income Securities [Member]
Equity securities, cost		5,449,227
Equity securities		4,924,497
Equity securities, unrealized loss		(524,730)
Equity And Other Mutual Funds [Member]
Equity securities, cost	542,131	717,165
Equity securities	528,847	729,019
Equity securities, unrealized loss	$ (13,284)	$ 11,854

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Note 9 - Inventories (Details Textual) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Inventory Valuation Reserves	$ 101,000	$ 64,000

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Note 9 - Inventories - Summary of Inventories (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Work in process	$ 101,475	$ 16,520
Finished products	535,194	1,054,367
Total inventories	$ 1,228,076	$ 1,672,012

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Note 10 - Income Taxes - Provision for Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Provision for federal income taxes - current	$ 152,350	$ 305,772	$ 317,128	$ 761,429
Provision for state income taxes - current	0	0	250	100
Provision for (benefit from) federal income taxes – deferred	8,091	(217,091)	158,544	(268,410)
Total provision for income taxes	$ 160,441	$ 88,681	$ 475,922	$ 493,119

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Note 11 - Defined Contribution Plan (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Defined Contribution Plan, Cost	$ 81,750	$ 81,750
Defined Contribution Plan, Employer Discretionary Contribution Amount Per Year Authorized	$ 94,326
DC Plan [Member]
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	4.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount		$ 109,000
DC Plan [Member] | Discretionary Contributions Vesting at Two Years [Member]
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage	20.00%
Defined Contribution, Discretionary Contribution Plan, Vesting Period (Year)	2 years
DC Plan [Member] | Discretionary Contributions Vesting Each Additional Year [Member]
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage	20.00%
Defined Contribution, Discretionary Contribution Plan, Vesting Period (Year)	6 years

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Note 12 - Related-party Transactions (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Previous President and CEO [Member] | Consulting Services [Member]
Related Party Transaction, Amounts of Transaction	$ 30,000	$ 0	$ 90,000	$ 0
Director [Member] | Accounting and Tax Services [Member]
Related Party Transaction, Amounts of Transaction	$ 9,000	$ 4,000	$ 12,000	$ 4,000

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Note 13 - Other Information - Summary of Accrued Expenses (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Bonuses	$ 140,252	$ 175,496
Distribution fees	409,742	395,536
Payroll and related expenses	95,313	53,475
Reserve for outdated material	271,832	369,154
Company 401(k) contribution	81,750	94,326
Audit fee	60,250	66,500
Annual report expenses	54,475	68,349
Sales rebates	123,784	80,926
Insurance	21,625	0
Other	27,143	18,294
Total Accrued Expenses	$ 1,286,166	$ 1,322,056

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Note 15 - Concentrations of Credit Risk (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Two Vendors [Member]
Concentration Risk, Percentage	62.00%	80.00%	74.00%	70.00%
Number of Vendors	2	2	2	2
Marketing Partner [Member]
Number of Customers	1		1
Distributor [Member]
Number of Customers	3	3	3
Distributors and Marketing Partners [Member]
Number of Customers				3
Distributors and Marketing Partners [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	81.00%	89.00%	80.00%	78.00%
Distributors and Marketing Partners [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	83.00%	86.00%	83.00%	86.00%

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Note 16 - Earnings Per Share (Details Textual) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share, Basic, Total (in dollars per share)	$ 0.14	$ 0.07	$ 0.40	$ 0.41