PART I

ITEM 1. BUSINESS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities for existing products, plans and objectives of management. Statements in this periodic report that are not historical facts are hereby identified as “forward-looking statements.”

Corporate History

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

EMERGING GROWTH COMPANY STATUS

As part of the Jumpstart Startups Act of 2012 (“JOBS ACT”), companies with less than $1.0 billion in gross revenue can qualify as an “emerging growth company.”  We will qualify as an emerging growth company as defined in the JOBS Act, and, as such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, (ii) reduced disclosure obligations regarding executive compensation in our periodic and annual reports, (iii) not being required to comply with certain new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, and (iv) not being required to obtain stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of the reduced disclosure obligations.  Additionally, we qualify as a “Smaller Reporting Company” and also have the advantage of not being required to provide the same level of disclosure as larger companies.  Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.  We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed one billion dollars, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common units that are held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period.  At this time, we expect to remain both a “Smaller Reporting Company” and “Emerging Growth Company” for the foreseeable future.

3

Business

NU-MED is a medical device company principally engaged in the design, innovation, development, enhancement and commercialization of beginning, early, and selective later-stage quality medical devices. The mission of NU-MED is to design, develop, and market technologies utilizing nitric oxide in the medical device field. Our technologies will focus on market niches in high growth trend areas.  Our products are developed to target a current need in medical procedures by improving upon an existing technology or device or by designing a device to serve a currently unfilled need that is clearly defined and acknowledged by medical professionals. Our focus has been on the creation of a nitric oxide generating formulation, a hospital bedside nitric oxide delivery system and a mobile rechargeable device to deliver nitric oxide gas to offer solutions to hospitals, health systems and the medical community throughout the world.

Prior to the founding of NU-MED PLUS, our core team Jeff Robins, William Moon, and Dr. Craig Morrison investigated, researched, and worked on initial formulations of a conceptual product to convert nitric oxide from a proprietary formulation to a gas used in the medical field. Based on our team’s backgrounds in the field of mechanical engineering, chemistry and medicine it was determined a potential niche market existed and the conceptual proprietary product could possibly be created.  From this initial research and some initial testing, our team believed we could create a mechanical device that could deliver nitric oxide to medical patients and use a new formulation of nitric oxide that, when combined with the new delivery device, could be accomplished in a more economical method than those currently in existence.  NU-MED PLUS was incorporated and an initial private placement was completed to raise capital to create a small lab and purchase equipment and chemicals to start working on testing the theories of the founding team. Even with almost a year of working on the proposed product and formulation, NU-MED has, since its inception, developed and is currently ready to begin the testing phase, prototype units for a hospital delivery system, a clinical delivery device, a portable rechargeable unit, and a compound which generates nitric oxide on demand.  This has been accomplished despite the lack of sufficient funding, which has required  team members, including William Moon and Tom Tait, to work in a part-time capacity for NU-MED as they continue to work for other organizations.  NU-MED has verified that all consultants and part-time employees are permitted to work on NU-MED’s project without violating other employment commitments.  

 The core of the initial product embodiment was the development of a delivery system to deliver a metered dose of nitric oxide to a patient. Our device differs from the delivery device currently used in that it can deliver nitric oxide gas from a compressed gas cylinder, as does the competitive system, or deliver nitric oxide generated from our proprietary nitric oxide generating compound.  Compressed gas cylinders are costly, difficult and expensive to transport, and face significant shipping restrictions.  The initial goal of developing a kinetically controlled proprietary chemical nitric oxide generating mixture and the concomitant delivery device has been realized. The chemical mixture is and will remain proprietary; however, the mechanical delivery device has been issued a US patent.

During research and development, additional nitric oxide generation and delivery technologies were discovered that could potentially allow a more rapid path to FDA approval of final products for the market place. Nu-Med is currently researching and developing these technologies and has built and tested proof of concept prototypes and full engineering mockups. We are now engaged in producing a final unit for testing with the goal of an FDA 510(k) submission. Nu-Med has applied for a patent to protect these new technologies.

The testing and optimization may take an unknown direction that will necessitate changes in the anticipated design of the mechanical delivery apparatus.  Additionally, unforeseen delays can hamper development timelines. Management believes it will take some time before a product will be finalized and testing completed.  Until a final product is completed and testing done, no assurance can be given that we will be able to complete the product or achieve the costs savings for the patient.

Our initial goal for the delivery system development was to design and build a manufacturing prototype for internal testing.  This unit was designed with the objective of reducing the high cost patients and insurance companies are currently required to pay for nitric oxide delivery, and to provide an alternative source of nitric oxide through the use of a nitric oxide generating compound.  Current use of nitric oxide is severely restricted, used only in the most

4

extreme cases.  Reducing the cost of delivery will greatly expand the use of nitric oxide, both for the treatment of patients and for research work.  

Research has indicated the potential beneficial results of using nitric oxide in the treatment of a number of illnesses for which the FDA has not currently approved its use.  These include, but are not limited to, COPD, asthma, cystic fibrosis, tuberculosis, malaria, ventilator acquired pneumonia, and the treatment of blood prior to transfusion, to name but a few.  Due to the high cost of nitric oxide, research in these areas has been limited.  Our system would significantly reduce the cost of nitric oxide delivery, enabling research on these and other areas.  

Due to the costs of testing and FDA approvals, we do not anticipate moving beyond our lab testing for at least the next year or longer.  Additionally, we would need to raise substantially more capital for further testing and hire third party laboratories to move beyond the initial development and testing phase.  

Products

Nitric oxide is an extremely important bio-mediator in the human body that is produced from the amino acid l-arginine.  Nitric oxide has anti-inflammatory properties, antibacterial, antiviral and antifungal properties which make it useful in certain medical treatments. At the present time inhaled nitric oxide (INO) is used as a selective vaso-dilator in infants. The only currently FDA approved use of nitric oxide at this time is Hypoxia in premature infants and newborn babies. Management is not aware of any other potential uses of nitric oxide that have been cleared by the FDA, but this may change as new submittals are made. The heavy costs of delivering nitric oxide to patients have created limitations in the use of nitric oxide. As an additional motivation to reduce these costs, discoveries that have occurred since the first FDA approved use of nitric oxide in 1999 have led to new potential uses, which still need FDA approval, in a wide variety of diseases and health complications, including COPD, flu viruses, bacterial infections, tuberculosis, head injuries and much more. NU-MED hopes to take advantage of the expanding medical uses of nitric oxide and the current high costs of delivering nitric oxide by developing a new generated nitric oxide method that reduces the delivery costs and can be used in a variety of medical and research settings.  Given NU-MED’s size, we do not anticipate being involved in any studies on new uses of nitric oxide and will rely on other parties to continue to advance the uses of nitric oxide.

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

1.

Nitric oxide proprietary formulation.

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

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

4. A compact, mobile/portable rechargeable device to deliver inhaled nitric oxide gas.  The portable system necessitates a design which can be deployed where a reliable source of power is not available or is difficult to access. The key feature is a rechargeable battery pack that powers the unit for the full duration of a therapeutic session. It can be recharged using existing electrical sources, a solar array or other alternative energy source. The unit is designed as a low power but fully functional nitric oxide delivery system for inhalation therapy, that can be used as a transport device during the movement of a patient or as a delivery device in those remote areas of the world that do not currently have electrical power readily available.

5

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

The principal gas we aim to generate through each of our systems described above is medical grade nitric oxide, along with other various combinations of beneficial medical gases. Non-medical grade nitric oxide gas is produced and sold commercially by major gas companies as a specialty gas mixture and calibration gas.  Nitrogen dioxide is present in all nitric oxide gas currently produced.  Its presence limits the size of the dose of nitric oxide gas that can be administered for prospective uses in both humans and animals.

A longer-term goal is to further develop our proprietary compound formulation option that will be utilized to produce medical grade nitric oxide for use in all delivery units. Management believes that with the further refinement of our formulation, we can make and filter medical grade nitric oxide gas with minimal amounts of nitrogen dioxide, and that this process can produce medical grade nitric oxide gas in ample quantities for any current or prospective use and hopefully at a price less than that of all currently available technologies.  Management believes the only approved and available medical grade nitric oxide source is a product named Inomax. Since this is a single source market there is no price competition and price is set at a "market can bear" level. We believe, given this structure, there is ample room for a competitive response from NU-MED using on site generated nitric oxide at a lower cost to penetrate the market. The cost of materials and labor for the NU-MED product is anticipated to be low, providing attractive margins. Our product must have a known shelf life and be available in various configurations to yield known concentrations and volumes of gas.  Packaging is a critical developmental process that we will address after completion of our formulation.

We approximate that non-clinical laboratory sales could take place earlier than United States Food and Drug Administration (“FDA”) approval. Management anticipates that selling our units earlier into the market as laboratory equipment or to international groups will pave the way for sales of our medical delivery devices, but any financial contributions from intellectual property licenses and sales, non-medical sales will not be adequate to fund the substantial costs of the FDA approval process for human medical uses.  Even with sales to laboratories or other uses, we will require additional funding, which we currently do not have in place and cannot say that we will be able to obtain, or to obtain at acceptable rates.  

All human medical uses of nitric oxide gas require FDA approval prior to initiating sales in the United States and the approval of similar international agencies in their respective countries.  Approval can be a long and expensive process, with no assurance that any such approval can or will ever be obtained. Our products from the compound formulation for nitric oxide to our delivery machines will have to be approved by the FDA prior to any sales for human use.  Although the FDA can approve “uses” for nitric oxide and such uses can be expanded, our products, both the formulations and equipment, would also have to be approved to be used in association with the treatment using nitric oxide.  Accordingly, although the “uses” of nitric oxide such as its use for hypoxia in newborns is already approved by the FDA, we still would need to have our machine and compound approved by the FDA for such treatment.  Although having the “use” of nitric oxide would reduce our overall costs as we would not have to prove the efficacy of the treatment but only that our product and compounds are “substantially equivalent” to those already approved by the FDA.  Even this level of approval requires time, carried substantial costs, and creates additional uncertainty as to our ability to bring a product to the marketplace.  We currently do not have the funds to seek such an approval.  Our focus over the next twelve months will be on continuing development and patent applications.

Current Product Development Status

Hospital NO Unit. Our team has created an initial prototype which is a ready for use as a hospital Nitric Oxide gas delivery system which delivers a continuous intra-breath concentration of therapeutic NO to patients who are on a ventilator in a hospital setting. This machine is only in the prototype stage and we are performing internal testing on the accuracy of the machine and dosage prior to moving forward with any animal or human tests.  With any medical product, it will take years of refinement and testing before the product is ready for market.

6

Clinical delivery system. The clinical system is a simplified version of the hospital unit.  While it can be used in a hospital setting it was designed to be operated and used in a less medically intensive environment, such as a doctor’s office or physician’s clinic. It is a smaller and more portable unit, lending itself to clinical use on an as needed basis, rather than full-time use for which the hospital unit is designed.  Administration is via nasal cannula or non-rebreather face mask. Similar to a dialysis center conept patients would be treated with nitric oxide on as needed basis.

Portable Delivery System. Nu-Med has also developed a prototype lightweight Portable NO Delivery System that can be worn comfortably by patients outside of the hospital setting for underserved chronic therapies, and for applications within the United States and in developing nations. This product has the capability to deliver high purity NO to the patient at prescribed intervals or 24 hours per day at controlled doses by means of a nasal cannula or a face mask. As with our hospital unit, we are in the preliminary testing phase and do not anticipate any commercialization in the near future.

Reagent Delivery. During development of the Nu-Med line of medical nitric oxide delivery systems it was discovered that a system could be built that would provide the research community with a variable concentration source of nitric oxide for experiments. A preliminary system has been built that can provide a wide range of concentrations and flow rates of NO.  We expect commercialization of this product in the coming year.

Future Product Development. Utilizing our core technology, our newest product to be investigated is a one-time Single Treatment Disposable unit which will give rapid access to short term NO treatment. The entire unit is disposed of after treatment and is unique in the market, with no competitive product available. We also are investigating a Wound Healing System which may reduce the loss of a partial or full foot for diabetics by healing wounds and sores caused by their disease.

Existing Clinical Applications of Inhaled nitric oxide and Potential Markets

Nitric oxide can be safely inhaled, utilizing our delivery device, thru a ventilator, face mask, by nasal cannula, or via an endotracheal tube. An ideal inhaled NO delivery device requires delivery synchronized with respiration and minimal production of NO₂ and should be simple to use with full monitoring capacity (high and low alarms and precise monitoring of NO, NO₂, and O₂).  Our delivery devices were designed with all of these requirements in mind.  As a result, we believe it will be the best and most efficient delivery system available when it is commercialized.

Since the inception of the only FDA approved treatment of hypoxia in newborns with nitric oxide (INOMAX from Ikaria Holdings) management, initial research has shown approximately 394,000 patients have been treated worldwide over a ten-year period. Management believes the cost of a typical nitric oxide delivery system is approximately $30,000 each.  Market expansion in the US will occur based on FDA approval for other medical uses of nitric oxide therapies.  

Competition

Large companies with established brand names have a distinct advantage in the medical device arena. The cost of developing a product, followed by the costs of testing and licensing, favor larger, well financed and established companies.  It will be difficult for NU-MED to compete in this industry and we will be required to focus on the niche products, if we hope to be able to compete. The number of companies that have a product or products involving nitric oxide and free radicals is quite large and difficult to determine precisely as this is not the focus of these companies.

In addition to companies that may be working on similar solutions in the nitric oxide space but have not been public in any product offerings, NU-MED considers the following companies as direct competitors in the nitric oxide market space anticipated by Nu-Med Plus. This does not preclude that large pharmaceutical or medical supply companies will enter the critical care market with substantially similar products or systems.

7

Mallinckrodt Inc. acquired the only company with an FDA approved nitric oxide (INOMAX) delivery system for use in medical facilities. The FDA approval is limited to the treatment of persistent pulmonary hypertension in newborns (PPHN). Mallinckrodt Inc. has submitted several other specific medical uses of nitric oxide to the FDA for approval. The INOMAX system consists of a pressurized tank source of nitric oxide gas and a delivery and monitoring system and is intended for non-portable hospital use.

GeNO LLC is a technology company focused on their GeNOsyl Nitrosyl system of nitric oxide generation and delivery. This is a unique patented system based on the conversion of nitrogen dioxide/dinitrogen tetroxide to pure nitric oxide. Several delivery platforms have been submitted for FDA approval.  The FDA has approved the Genosyl Advanced Delivery System (ADS) for use with neonates.

GeNOsys Inc. is a technology startup that is developing an on-demand nitric oxide source. The product is described as being able to replace pressurized tank sources of nitric oxide. There are currently no FDA filings.

AIT Therapeutics (AITB) is a company that has acquired a technology that produces nitric oxide from electrical discharge through air. They are currently in clinical trials testing the product for use in the treatment of cystic fibrosis.

Many of our competitors, either alone or with their strategic partners, may have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products, and the commercialization of those products. Accordingly, our competitors may be more successful than we may be in obtaining approval for therapies or delivery hardware and achieving widespread market acceptance. We anticipate that we will face intense and increasing competition as new drugs and advanced technologies become available.

Employees

The Company currently has two employees and relies on its officers and consultants for most of its activities.

Description of Property

NU-MED’s corporate office is at 455 E 500 S, Suite 203, Salt Lake City, Utah 84111.  Our R&D facility is located at 1266 S 1380 W Orem, Utah 84058.   We pay rent of $950 per month for the corporate office and $525 per month for the R&D facility.  Our office rent increases to $978 per month effective March 1, 2018. Until we expand our operations the executive office arrangement will provide us the flexibility to expand our corporate offices as needed without being committed to long term overhead or office space we currently do not need.  Our office lease is on a 6-month term, while our laboratory lease is on a month to month basis.  Management believes these facilities will serve our purposes for at least the next twelve months.  

Regulations

Our proposed products would use nitric oxide gas for use in medical treatment.  Accordingly, our products will require prior FDA Class II approval. We have not submitted our products for approval and it is expected to take many years and may not be obtained, even after expending substantial resources in such efforts. Various laws and regulations govern or influence the research and development, manufacturing, safety, labeling, storage, record keeping and marketing of our products.  The lengthy process of seeking these approvals and the subsequent compliance with applicable laws and regulations require the expenditure of substantial resources. Any failure by us to obtain or maintain, or any delay in obtaining or maintaining, regulatory approvals could materially adversely affect our business.  Our policy will be to conduct our research and development activities in compliance with current FDA guidelines and with comparable guidelines in other countries where we may be conducting clinical trials or other developmental activities.

The following is a brief summary of applicable governmental regulations to which we may be subject in our planned business operations related to the use of our products in the medical field.  It should be noted that the application for

8

FDA regulatory approval of our devices is a long and costly pathway.  As we do not currently have the capital to engage in any regulatory approval, , for the foreseeable future we will be focused on the development of our technology and additional patent applications.

Clinical testing, manufacturing and marketing of human pharmaceutical products require prior approval from the FDA and comparable agencies in foreign countries. The FDA has established mandatory procedures and safety and efficacy standards that apply to the testing, manufacture and marketing of such products in the United States.  In the United States, these procedures include pre-clinical studies, the filing of an Investigational New Drug Application ("IND") or equivalent, human clinical trials and approval of a New Drug Application ("NDA").  The results of pre-clinical testing, which include laboratory evaluation of product chemistry and animal studies to assess the potential safety and efficacy of the product and its formulations, must be submitted to the FDA as part of an IND that must be reviewed before clinical testing can begin.

The results of the preclinical and clinical testing are then submitted to the FDA in the form of an NDA for approval to commence commercial sales. The FDA may, in responding to an NDA, grant marketing approval, request additional information or deny the approval if it determines that the NDA does not provide an adequate basis for approval. Among the conditions for an NDA approval is the requirement that the prospective manufacturer's quality control and manufacturing procedures conform on an ongoing basis with current Good Manufacturing Practices ("GMP"). In complying with GMP, we must continue to expend time, money and effort in the areas of production and quality control to ensure full compliance or engage the services of outside contractors who are well versed in compliance with these requirements. Following approval of the NDA, we are subject to periodic inspections by the FDA.  Any determination by the FDA of manufacturing deficiencies could materially adversely affect our business.

European countries generally follow the same procedures.  The European Union has established a unified filing system administered by the Committee for Proprietary Medicinal Products ("CPMP") designed to reduce the administrative burden of processing applications for pharmaceutical products derived from new technologies. Following CPMP review and approval, marketing applications are submitted to member countries for final approval and pricing approval, as appropriate.  In addition to obtaining regulatory approval of products, it is generally necessary to obtain regulatory approval of the facility in which the product will be manufactured.  The approval process for medical devices in Europe is similar but is administered by private certification organizations known as Notified Bodies, which are accredited by each member state of the European Union.  The receipt of regulatory approvals often takes several years, involves the expenditure of substantial resources and depends on a number of factors, including the severity of the disease in question, the availability of alternative treatments and the risks and benefits demonstrated in clinical trials.  On occasion, regulatory authorities may require larger or additional studies, leading to unanticipated delay or expense. There can be no assurance that any approval will be granted and, even if granted, such approval may be withdrawn if compliance with regulatory standards is not maintained.  In addition, the regulatory approval processes for products in the U.S., European countries and other countries around the world are undergoing or may undergo changes, and we cannot predict what effect any changes in the regulatory approval process may have on our business.

Clinical testing of an unapproved significant-risk medical device requires FDA approval in the form of an Investigational Device Exemption (IDE). The IDE application provides information to the FDA on device design and qualification, as well as on the study protocol. The FDA is mandated to respond to the IDE application within 30 days. An IDE may also be required for studies in which an approved device is used for a purpose distinct from its approved indication. This is typically the case when a trial is sponsored by a company for the purpose of expanding the indication of a device or making significant changes in the instructions for use.

Medical devices are regulated in the United States by the Center for Devices and Radiological Health (CDRH) of the FDA. The FDA/CDRH mandate is to promote and protect the public health by making safe and effective medical devices available in a timely manner. The standard for demonstrating safety and effectiveness is determined in part by the risk associated with the device in question. Devices are classified according to their perceived risk using a 3-tiered system (Class I, II, or III).

9

Class I devices (lowest risk) are subject to general controls, which are published standards pertaining to labeling, manufacturing, post-market surveillance, and reporting. Devices are placed into Class I when there is reasonable assurance that general controls alone are adequate to assure safety and effectiveness. The general controls that typically apply to Class I devices include prohibitions against adulteration and misbranding, requirements for establishing registration and device listing, adverse event reporting, and good manufacturing practices. Furthermore, remedies including seizure, injunction, criminal prosecution, civil penalties, and recall authority are provided to the FDA. Formal FDA review is not required for most Class I devices before their market introduction.

Class II devices are those higher-risk devices for which general controls alone have been found to be insufficient to provide reasonable assurance of safety and effectiveness, but for which there is adequate information available to establish special controls. Special controls may include performance standards, design controls, and post-market surveillance programs. In addition, most Class II devices require FDA clearance of a premarket notification application (PMA or 510(k)) before the device may be marketed. In the 510(k) applications, the medical device manufacturer must provide data to demonstrate that the new device is “substantially equivalent” to a legally marketed device. Although substantial equivalence can usually be demonstrated on the basis of bench and animal testing alone, approximately 10% of 510(k) applications include clinical data.

Class III devices, such as heart valves, pacemakers/implantable cardioverter-defibrillators, and coronary stents, are judged to pose the highest potential risk. These devices are either life-sustaining/supporting, of substantial importance in preventing impairment of human health, or present a high risk of illness or injury. Consequently, general and special controls alone are inadequate to provide reasonable assurance of safety and effectiveness. Most Class III devices require FDA approval of a PMA before they can be legally marketed. Approval of the PMA generally requires clinical data demonstrating reasonable assurance that the device is safe and effective in the target population.

The Human Device Exemption (HDE) is a new pathway to allow for commercialization of Class III devices designed to address small markets, i.e., diseases or conditions that affect fewer than 4,000 patients in the United States each year. Approval of an HDE requires demonstration that the device is safe and the probable benefits outweigh the probable risks. Although the process may require smaller clinical trials, an HDE device must continue to operate under local IRB approval at each participating institution and must continue to collect case report forms akin to an ongoing clinical trial. The PMA process typically involves a series of studies starting with first clinical use and culminating in a multicenter, prospective randomized control trial (pivotal trial). The complexity and extent of the clinical testing program is dictated by the nature of the device and its proposed use. The clinical study program is developed by the company in conjunction with clinician investigators, all in close collaboration with the FDA/CDRH.

The first and arguably most important step in this process is the pre-IDE meeting, in which the company, often accompanied by the lead clinical investigator(s), meets with the FDA/CDRH to present data about the device, its clinical development program, and its intended use after approval. The FDA/CDRH staff reviews existing bench and animal data (as well as any outside-the-United States clinical data) and makes informal, non-binding suggestions regarding the need (if any) for additional pre-clinical data (bench and animal), as well as the study design. The sponsor then submits an IDE application to the FDA/CDRH for formal review.

Clinical development of a new Class III device is typically divided into pilot and pivotal trial phases. The purpose of the pilot phase (starting with first clinical use) is to establish safety and to assist in design of the pivotal trial. Pilot-phase testing is typically limited to fewer than 100 patients treated at a few centers. The purpose of the pivotal trial is to generate data that define patient populations in which use of the device is safe and effective. The dialogue initiated during the pre-IDE meeting continues and intensifies between the FDA/CDRH and the company over the specifics of the pivotal trial and includes the patient population, the control group against which the new device will be evaluated, and the primary and secondary end points of the evaluation. For first-in-class devices, e.g. drug-eluting stents, where there are few data regarding short- or long-term outcomes, the FDA/CDRH requires prospective randomized controlled studies. High profile devices that require randomized data for approval are the exception rather than the rule. The vast majority of device clinical trials are case series that carefully document product performance. Still more products are approved as “tools.”

10

When the FDA/CDRH has substantial data on the device class metrics, comparisons may be made to historical data or objective performance criteria. When few data on existing standards are available, the FDA typically requires randomized rather than single-arm studies, in which the new device is compared against concurrent controls treated with current best medical practice. The comparison may be powered to show that the new treatment is superior to prior approaches, or that it is non-inferior (equivalent or better) compared with a previously approved device in a new area.

The specifics regarding study design may have profound impact on the time and cost of bringing a new device to market. Though the primary mission of the FDA/CDRH is to ensure safety and effectiveness of commercially available devices, when exerting regulatory oversight, the agency must balance its primary mission with the costs of introducing new technologies to the clinical marketplace. This has been codified by the FDA Modernization Act and the FDA Modernization Act-II, which require the agency to pursue the “least burdensome means” available to establish device safety and efficacy. The trial must be conducted according to good clinical practices standards, with the approval of the local IRB at each participating center.  

Every clinical site is federally mandated to have an IRB responsible to ensure the protection of the rights, safety, and welfare of research subjects. Regulation of the IRB review of protocols involving medical devices is under the purview of the FDA. The Office of Protection from Research Risks (OPRR) is responsible for oversight regarding all human research and is in direct communication with the FDA/CDRH.  Studies involving human subjects that do not involve products regulated by the FDA, fall under the direct purview of the OPRR. Both the FDA and the OPRR are in the Department of Health and Human Services. Each IRB must meet standards for the composition, leadership, and processes set forth by that department. IRBs are subject to periodic audits by the FDA to ensure that records and procedures are in compliance with regulations. The IRB process typically requires approximately three months, but at times can take considerably longer.

The company must also negotiate agreements with each clinical site addressing the many issues associated with the clinical trial. In addition to the study costs/reimbursement (per-patient enrolled and overhead), these agreements typically include indemnification and the assignment of ownership rights of new discoveries (intellectual property) made in the course of the study. The resources required at each center to perform the high-quality research necessary for a PMA protocol are formidable. Pivotal studies required for a PMA application are typically large multicenter randomized trials and often represent the largest commercial risk and expense in the device development process. In addition to obtaining an IDE from the FDA and formally recruiting clinical sites, it also includes engaging a contract research organization (CRO), core laboratories, formation of a data safety monitoring board (DSMB), and an executive committee.

Though there are many similarities in the regulatory process in the United States and countries within the European Union, there are important differences that impact the time and cost associated with the introduction of a new medical device. The European Union system relies heavily on notified bodies (NBs), which are independent commercial organizations to implement regulatory control over medical devices. NBs have the ability to issue the CE mark, the official marking required for certain medical devices. NBs are designated, monitored, and audited by the relevant member states via the national competent authorities. Many functions performed by the FDA/CDRH within the United States are performed by NBs, including medical device certification, device type designation, assessment and verification of quality systems, and review of design dossiers for high-risk devices. Currently, there are more than 50 active NBs within Europe. A company is free to choose any notified body designated to cover the particular class of device under review. After approval, post-market surveillance functions are the responsibility of the member state via the competent authority. NBs typically function in a closed manner, providing little visibility on criteria required for approval. This dynamic allows for a high degree of variation as well as competition among NBs. As a result, NBs are perceived by industry to be less bureaucratic organizations that can respond more quickly and efficiently than the FDA.

Criteria for approval of high-risk devices are different in the European Union. To receive approval to market a Class III high-risk (and some Class II) device in the United States, the manufacturer must demonstrate the device to be reasonably safe and effective, which typically requires a prospective, randomized controlled clinical trial. To receive

11

approval to market a device in the European Union, the manufacturer must demonstrate that the device is safe and that it performs in a manner consistent with the manufacturer’s intended use. This difference has a profound impact on the size and scope of the clinical studies for regulatory approval.

The demonstration of safety and efficacy for a new medical device is a long, arduous, and expensive developmental path from early concept to introduction into clinical practice.  

We will be subject to environmental and other rules related to the handling of nitric oxide.  We will be using very small testing quantities of nitric oxide and do not anticipate any material issues in relation to nitric oxide as it relates to environmental or other regulatory issues.

In addition to the foregoing, our present and future business may be subject to various laws and regulations relating to safe working conditions, clinical, laboratory and manufacturing practices, the experimental use of animals and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research, as well as national restrictions on technology transfer, and import, export and customs regulations and similar laws and regulations in foreign countries. Due to the extensive regulatory requirements, management does not anticipate any submittals for some time until the technology is more developed and tested in the lab.  At such time as management feels initial submittals are warranted, significant additional capital will need to be raised to proceed with even initial submittals  As such, we believe any commercialization of our product is years away and we will continue to be reliant on loans and stock sales to stay in business.

Concentration of Customers

Currently we do not have any customers and will not have any customersuntil our product is through the development stage and testing stage.  

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration

Presently we have 1 patent approved and 1 patent pending for our Nitric Oxide systems and we hope to file additional patents for our products which will help us build a strong IP portfolio and value for our company and our shareholders.  Our approved patent covers Gas Generator #62-014866 and our patent pending covers Controlled Delivery of Medical gases using Diffusion Membrane #14529112. We are also pursuing a proprietary protection strategy of our key formulations and methods for further strengthening the overall Intellectual Property portfolio.  We have no trademarks.  We also have no franchises, concessions, royalty agreements or labor contracts.

Research and Development Costs During the Last Two Fiscal Years

We are currently expensing most of our costs under a general operating expense category instead of capitalizing any research and development expenses.

ITEM 1A.  RISK FACTORS

NU-MED’s operations are subject to a number of risks including:

Risk Factors Relating to NU-MED’ Proposed Activities

We currently do not have the capital to fund operations and are dependent on raising additional capital to stay in business.

NU-MED is a medical device development company focused on the development of systems for the delivery of nitric oxide.  NU-MED is currently undercapitalized and is relying on equity and debt investments to continue operations.   We have identified the products we want to develop and market. We  have moved forward in the design

12

and development stage with these products.  Given that we will be producing a medical device, it may take years of testing before we are able to start selling our product and we will need more capital infusions to get the product developed and to market.  Investors in NU-Med would be placing their money in a company with some developed products which are potentially years away from being able to sell and with no support for the eventual commercial application or market for the product.  Given the uncertainties facing the company, investors should look to an investment in NU-MED as highly speculative and risky with a high probability of losing their entire investment.

We are still in the product development phase of our operations, so the ultimate success of our products is unknown.

NU-MED is a development-stage  business.  NU-MED has focused on the development of medical products which requires extensive capital investment and can be a very lengthy process subject to extensive regulatory approval. The ultimate success of NU-MED and its products is very uncertain.  Investors will therefore be placing their money in an undercapitalized company with no proven operations.

Nitric oxide is a regulated chemical and is subject to extensive environmental regulations related to its handling and disposal, which may increase our costs and subject us to environmental regulations.

Although NU-MED operates as a research and development company at this time and we use only small quantities of nitric oxide, we are still subject to the environmental and other workplace rules related to the handling and disposal of nitric oxide.  These rules require that we keep records of our handling and disposal of any nitric oxide. Additionally, if we mishandle or do not dispose properly of the nitric oxide, we could be subject to fines and penalties.  At this time, we do not anticipate handling large quantities of nitric oxide and should not see substantial additional costs or contingencies from our use of nitric oxide.  However, as we expand our operations, the environmental and workplace rules related to the handling of nitric oxide could increase our overall costs.

We may incur significant costs complying with environmental laws and regulations, and failure to comply with these laws and regulations could expose us to significant liabilities.

Certain aspects of our business are subject to a variety of federal, state and local laws and regulations governing the use, generation, manufacture, distribution, storage, handling, treatment and disposal of materials. For example, high-pressure gas cylinders can be regarded as hazardous materials. Although we believe our safety procedures for handling and disposing of these materials and waste products comply with these laws and regulations, we cannot eliminate the risk of accidental injury or contamination from the use, manufacture, distribution, storage, handling, treatment or disposal of hazardous materials. In the event of contamination or injury, or failure to comply with environmental, occupational health and safety and export control laws and regulations, we could be held liable for any resulting damages and any such liability could exceed our assets and resources. We do not maintain insurance for any environmental liability or toxic tort claims that may be asserted against us.

We will need additional financing, which will potentially dilute current investors, and we may not be able to obtain such financing.

NU-MED intends to engage in product development that will require substantial capitalization as we attempt to develop our products.  Accordingly, NU-MED’ future success and profitability may be based on our ability to obtain additional financing on favorable terms.  Any additional financing may cause dilution to current investors and there can be no assurance that any additional financing will be on terms that are favorable to NU-MED and our shareholders.  

We currently have note payables that may be converted into shares of our common stock, which could result in substantial dilution to current investors.

We have note payables which may be converted into shares of our common stock.  Two of the notes, with total principal balances of $230,100 are convertible at $0.01 per share of principal and interest.  With approximately $230,100 in principal and $81,944 in accrued interest on the notes, if the notes and accrued interest are converted,

13

over 31,204,400 additional shares would be issued.  If all of the notes and accrued interest were converted into shares of our common stock, investors would suffer substantial dilution to their ownership percentage in NU-MED and to their overall value.  We would expect any issuance to be very dilutive to current investors, resulting in potential loss of value to the investors.  

The medical product business is highly competitive and subject to extensive regulations, making it difficult and very expensive to bring new products into the marketplace.

We face vigorous competition from companies throughout the world, including multinational companies which are better financed and have more experience in medical product design.  Most of these competitors have greater resources than we do and may be able to respond to changing business and economic conditions more quickly than us.  Our ability to compete with these companies will be limited.  Additionally, with extensive regulation and testing of medical devices, it is extremely costly to bring a medical device to market and we may not be able to obtain the necessary capital to bring a medical device to market.  As such, an investment in the Company is very risky and could result in the loss of an investor’s entire investment.

Our success will be dependent on the ability of management to develop medical devices.

Our success depends on our ability to develop medical products.  With limited resources, we will be dependent on current management to be able to develop the medical devices.  None of our current management members has extensive experience developing medical products or bringing them to market.  As such, investors will be placing money with individuals with no proven success in developing and selling medical devices, thereby creating high risk of loss of an investor’s entire investment in the Company. 

Our success depends, in part, on our key personnel.

Our success depends, in part, on our ability to retain our key personnel, including our executive officers and senior management team. Our management team has created our business model and the initial focus on our first medical device. The unexpected loss of one or more of our key executives could adversely affect our business.  Our success also depends, in part, on our continuing ability to identify, hire, train and retain other highly qualified personnel.  Competition for these employees can be intense.  We may not be able to attract, assimilate or retain qualified personnel in the future, and our failure to do so could adversely affect our business. 

Our ability to commercialize pharmaceutical products successfully may depend, in part, on the availability of reimbursement for our products from:

     *    Government and health administration authorities;

     *    Private health insurers; and

     *    Other third party payers, including Medicare.

We cannot predict the availability of reimbursement for health care products.  Third-party payers, including Medicare, are challenging the prices charged for medical products and services.  Government and other third-party payers progressively are limiting both coverage and the level of reimbursement for new drugs.  Third-party insurance coverage may not be available to patients for any of our products.

The continuing efforts of government and third-party payers to contain or reduce the costs of health care may limit our commercial opportunity.  If government and other third-party payers do not provide adequate coverage and reimbursement for any product we bring to market, doctors may not prescribe them or patients may ask to have their physicians prescribe competing treatments with more favorable reimbursement.  In some foreign markets, pricing and profitability of prescription pharmaceuticals are subject to government control.  In the United States, we expect that there will continue to be federal and state proposals for similar controls.  In addition, we expect that increasing emphasis on managed care in the United States will continue to put pressure on the pricing of pharmaceutical

14

products.  Cost control initiatives could decrease the price that we receive for any products in the future. Further, cost control initiatives could impair our ability to commercialize our products and our ability to earn revenues from this commercialization.

We May Be Subject to Product Liability Claims if People or Property Are Harmed by the Products We Sell

Some of the products we manufacture and sell may expose us to product liability claims relating to personal injury or death caused by such products.  Although we will maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will be available to us on economically reasonable terms, or at all.

Our auditors have indicated in their audit opinion that there is a substantial doubt about our ability to continue as a going concern, which will affect our ability to raise capital or borrow money.

Our auditors have issued an audit opinion indicating that there is a substantial doubt about our ability to continue as a going concern.  As such, any potential investor or lender is unlikely to be willing to provide additional capital or loans to us.   Without additional capital, we will be unable to remain in business or to execute on our business plan. Even if we are able to obtain additional capital, given the “going concern” modification, it is likely investors would suffer substantial dilution to their investment.

General Risks Relating to Investors

We intend to take advantage of the disclosure requirements of the JOBS Act provided for emerging growth companies, including not providing all of the accounting disclosure that other companies will be required to provide, which may limit an investor’s ability to compare our financial statements with other companies.

Under the JOBS Act, we can elect to not comply with new or revised accounting standards which will allow us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies.  Until the standards are required for private companies, we will not be required to adopt those standards. As such, our financial statements may not be comparable to those of companies that comply with public company effective dates.  This could affect an investor’s ability to evaluate our financial statements compared to other public companies.  In addition to the financial statements, as we qualify as a “Smaller Reporting Company”, the JOBS Act allows us to provide less disclosure on certain issues, such as executive compensation, which could affect an investor’s ability to compare us to other companies.

We do not intend to pay dividends in the near future.

NU-MED has not paid, and does not plan to pay, dividends in the foreseeable future, even if we were profitable. Earnings, if any, are expected to be used to expand operations, for research and development and for general corporate purposes, rather than to make distributions to shareholders.

Investors will not have cumulative voting and will not be able to elect directors based on the percentages of ownership.  

Holders of common stock are not entitled to accumulate their votes for the election of directors or otherwise.  The present shareholders of NU-MED will be able to elect all of the directors of NU-MED and effectively control NU-MED’s affairs, making it difficult for investors to be able to change management or the direction of NU-MED.  (See "DESCRIPTION OF SECURITIES.")

We may issue more stock without shareholder input or consent, which could dilute the book value of your investment.

The board of directors has authority, without action by or vote of the shareholders, to issue all or part of the

15

authorized but unissued shares. In addition, the board of directors has authority, without action by or vote of the shareholders, to fix and determine the rights, preferences, and privileges of the preferred stock, which may be given voting rights superior to that of the common stock. Any issuance of additional shares of common stock or preferred stock will dilute the ownership percentage of shareholders and may further dilute the book value of our shares. It is likely we will seek additional capital in the future to fund operations. Any future capital will most likely reduce current shareholders’ percentage of ownership.  Additionally, with the board of directors having the ability to set the rights, preferences and privileges of the preferred stock the board of directors, without shareholder approval, can create classes of stock which are superior to the common stock in both voting and preferences, including dividend and liquidation preferences.  As such, current and future holders of common stock may have less voting power per share and dividend rights then subsequently issued preferred stock.

A relatively small number of stockholders and managers have significant influence over us, other stockholders will not be able to have a voice in the direction of the company, and stockholders may disagree with the decisions of management. 

A small number of our stockholders and management, acting together, will be able to exert significant influence over us through their ability to influence the election of directors and all other matters that require action by our stockholders.  The voting power of these individuals could have the effect of preventing or delaying a change in control of our company which they oppose, even if our other stockholders believe it is in their best interests.  In addition, our executive officer has the ability to influence our day-to-day operations.  These factors could negatively affect our company and our stock price, as other investors may be unwilling to invest in a company with such a consolidation of control.  Additionally, if stockholders dislike the decisions of management, it will be difficult for stockholders to make changes to current management.

The departure of certain key personnel could affect the financial condition of NU-MED due to the loss of their expertise.

Our business plan was developed by our officers and will depend on their ability to design and create the initial models for our products.  Without their expertise, it is unlikely we will be able to complete the development and design of initial products.  We do not have the funds, at this time, to hire additional personnel, and without current management it is unlikely we would be able to obtain further funding.  The loss of any member of management would severely hinder our ability to develop our proposed products.  A failure on our part to retain the services of these key personnel could have a material adverse effect on our operating results and financial conditions. We do not maintain key man life insurance on any of our employees.  

Employees

The Company currently has two  employees and relies on its officers and consultants for most of its activities.   

ITEM 2. PROPERTIES

NU-MED’s corporate office is at 455 E 500 S, Suite 203, Salt Lake City, Utah 84111.  Our R&D facility is located at 1266 S 1380 W Orem, Utah 84058.   We pay rent of $950 per month for the corporate office and $525 per month for the R&D facility.  Effective March 1, 2018 the monthly rent for our office increases to $978 per month. The executive office arrangement will provide us the flexibility to expand our corporate offices as needed, without being committed to long term overhead or office space we currently do not need.  Our executive office lease is for a term of six months and our laboratory lease is on a month to month basis.  Management believes these facilities will serve our purposes for at least the next twelve months.  

ITEM 3. LEGAL PROCEEDINGS

In December 2017 the Company reached a settlement of the legal action filed against its former CFO. Under the settlement agreement, each party agreed to pay its own legal expenses and the former CFO agreed to return 499,144 shares of common stock.  Upon receipt the shares returned were cancelled, reducing the total number of shares issued and outstanding.

16

ITEM 4. MINING SAFETY DISCLOSURE

NU-MED has no mining operations.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's Common Stock is quoted on the over the counter bulletin board and OTCQB under the symbol NUMD.  The first sale of the shares occurred in the third quarter of 2014.  The following high and low bid prices for the Company's Common Stock is based on over-the-counter quotations that reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not necessarily represent actual transactions. Furthermore, the Company’s common stock has traded sporadically and in low volume. Consequently, the information provided below may not be indicative of the Company's common stock price under different conditions.  

Quarter Ended

High Bid

Low Bid

December 2017

$0.40

$0.30

September 2017

$0.39

$0.18

June 2017

$0.40

$0.151

March 2017

$0.40

$0.20

December 2016

$0.55

$0.25

September 2016

$0.40

$0.25

June 2016

$0.50

$0.30

March 2016

$0.94

$0.40

At March 30, 2018, the Company had approximately 140 shareholders of record.  As of March 30, 2018, the Company had 37,563,125 shares of its Common Stock issued and outstanding.

Transfer Agent

NU-MED’s transfer agent is Issuer Direct Corporation, 1981 Murray Holladay Road, Suite 100, Salt Lake City, Utah 84117; telephone number 801-272-9294.

Recent Sales of Unregistered Securities

In January, February and September 2017, the Company entered into three stock purchase agreement under which the buyer may purchase up to $20,000, $700,000 and $400,000, respectively, in shares of common stock at $0.25 per share.  If the buyer purchases the maximum allowed under the agreement, 4,480,000 shares of common stock would be issued in fulfillment of the Company’s obligation under the agreement.  We have received $19,000, $693,605 and $60,000 under these agreements, respectively.  During 2017 we issued 76,000 shares of common stock in satisfaction of our obligation under the $19,000 received on the $20,000 stock subscription agreement and 40,000 shares of common stock in satisfaction of $10,000 in funding received from the $700,000 stock subscription agreement.  As of December 31, 2017 we have the obligation to issue 2,734,422 shares of common stock in satisfaction of the remaining $683,605 in funds received against the $700,000 stock subscription agreement and 240,000 shares of common stock in satisfaction of the $60,000 in funding received from the $400,000 stock subscription agreement.

17

ITEM 6.  SELECTED FINANCIAL DATA

As a smaller reporting company, this is not required.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Statements

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

CRITICAL ACCOUNTING POLICIES

a. Estimates

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

b. Fair Value

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

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

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

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

All cash, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments.  Additionally, we measure certain financial instruments at fair value on a recurring basis.  Liabilities measured at fair value on a recurring basis are as follows at December 31, 2016 and 2017:

18

c.  Earnings per Share

The computation of earnings per share of common stock is based on the weighted average number of shares

Recent Accounting Pronouncements

The Company has reviewed all FASB-issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods.  The Company has carefully considered the new pronouncements that alter previous GAAP and does not believe that any new or modified principles will have a material impact on the company’s reported financial position or operations in the near term.  The applicability of any standard is subject to the formal review of the Company’s financial management and certain standards are under consideration.

Plan of Operations

NU-MED is focused on the development of medical devices with the first product aimed at the delivery of nitrogen oxide to patients.  NU-MED believes the current delivery systems and supply of nitrogen oxide are costly and creates an opportunity to develop nitric oxide delivery devices can utilize cheaper delivery devices for nitrogen oxide.  In an effort to develop products, shortly after the founding of NU-MED management raised initial capital to be able to establish a lab and purchase equipment to work on the initial designs for a new medical device to deliver nitrogen oxide.

Our lab has been successfully equipped and we are proceeding with development of our proprietary product technology. Our technology is at the early development stage and management plans are to concentrate on further improvement of our technology. Our budget requirements for the next year will be centered upon factors relating to the testing, research and enhancement with the intention being to patent our formulation and design. Included in our budget for the next year is the costs of chemical standards, gases and equipment we have projected we will need. Contained also within in our budget are auditing costs and legal fees, which include patent filing expenses.  Projected costs to continue operation for the next year are $1,250,000 and may increase depending on the costs of patent applications and ongoing development work. At this time, we do not have the funds to operate at this level and are seeking financing either through debt or equity.  If we cannot raise the needed capital, we may not be able to remain in business.

Management believes, with the costs to develop new technology and receive FDA regulatory approval for those devices, it is important to divide the capital needs into phases to be able to track development progress and anticipate capital needs better.  Rather than trying to raise a larger amount of capital upfront, which management felt would result in higher dilution than otherwise would be required, management has chosen to raise capital in tranches as product development progresses.  With the first phase of establishing a lab and  initial design completed and with prototype development continuing, management anticipates having to seek additional capital in the near future to  

19

continue  further development and testing for FDA application..  The exact amount of capital and the time frame to continue the development of the products is still unknown as management continues to modify current designs and development.  Management believes it may take some time before a commercial product is able to be marketed and will have to rely on outside funding to support operations through not only the development and testing phases, but the licensing phase and initial marketing cycles.

Liquidity and Capital Resources

At December 31, 2017, we had assets of $406,719 with current assets of $360,210 and liabilities of $327,910. Our current assets consisted of cash in the amount of $351,043 and prepaid expenses in the amount of $9,167.  At December 31, 2016, we had current assets of $12,450 all of which was cash, and liabilities of $4,474,833. We currently have sufficient cash to pay ongoing expenses for the next six months, after which we will have to rely on loans from shareholders to cover expenses.  Without additional capital, we will not be able to stay in business and move our business plan forward.  During the year ended December 31, 2017, we entered into stock subscription agreements in the amount of $20,000, $700,000 and $400,000, under which we have drawn $872,605. We currently have no commitments beyond this stock subscription for the needed capital. Since we will not have a commercial product in the next twelve months, we will have to rely on outside funding to support our operations and product development and testing efforts.  Given the financial state of NU-MED, we will not be able to seek traditional bank financing and have to rely on private stock sales and potential loans from investors and shareholders.  If we are unable to raise additional capital, we will be forced to suspend operations until such capital can be raised or go out of business.  We cannot project the full costs to bring our proposed product to market or the timing of such commercialization.  Given that our product is in the medical field, testing is very expensive and we will need additional capital prior to completing the testing phase.  Any refinement or modification of the product after the prototype is developed would also require additional capital.  At this time, we will have to continue to rely on outside capital and a budget that may require adjustment as we move further in the product development phase.

RESULTS OF OPERATIONS

For the year ended December 31, 2017, we had no revenues and operating expenses of $466,519, gain on derivative of $4,083,787 and interest expense of $18,880 resulting in a net income of $3,577,002 compared to a net income for the year ended December 31, 2016 of $9,652,488 which resulted from a $10,944,813 gain on derivative. Excluding the gains on derivative, we generated net losses of $506,785 in 2017 and $1,292,325 in 2016.We will continue to experience operating losses as we move forward with patent filings and retain additional consultants to assist with ongoing development work.  We were able to utilize our stock to pay for many of the consultants which has allowed us to preserve our limited cash.  We anticipate losses to continue for the foreseeable future and for the losses to increase as we hire personnel and move into more development and testing phases of our proposed products. Additionally, we are preparing patent applications which will require additional capital to pay for outside attorneys and consultants.  We will be dependent on outside capital to support operations for the foreseeable future and at this time do not have any commitments for additional capital.

Non-cash:  Gain on Derivative

In 2013 the Company entered into a convertible promissory note that contained a price protection clause, which made the note a derivative financial instrument.  The price protection clause provided for a variable conversion rate rather than a fixed rate, which required it be accounted for under derivative accounting.  Accounting for a derivative requires that the financial obligation be evaluated at the close of each quarter, based on the stock closing price at the end-of-quarter date, and record the resultant gain or loss for the reporting period based on that valuation.

On 2015, the Company received $55,000 for which it issued a convertible note payable with a maturity date of November 18, 2017, unsecured and convertible into shares of common stock at $0.25 per share with a price protection provision to adjust to a lower conversion price.  As the note carried no rate of interest, during 2015, 50,000 shares of restricted common stock were issued in consideration.  In December 2016 and January 2017, payments of $27,500 each were made against the note, extinguishing all obligations, and the note was retired.

20

We had a gain on derivative liability of $4,083,787 during the year ended December 31, 2017, compared to gain of $10,944,813 for the year ended December 31, 2016.

Off-balance sheet arrangements

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

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements of the Company are set forth immediately following the signature page to this Form 10-K.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has had no disagreements with its independent registered public accounting firms with respect to accounting practices or procedures or financial disclosure.

ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective. The disclosure controls and procedures ensure that all information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.  

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2017. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework - 2013.  Based on this evaluation, our management concluded that, as of December 31, 2017, our internal controls over financial reporting were not effective to provide reasonable assurances based on the above criteria.  

21

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm since the Company is not an accelerated filer or large accelerated filed.

Changes in internal control over financial reporting

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

ITEM 9B.  OTHER INFORMATION

None

PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information with respect to the officers and directors of NU-MED.  NU-MED’s directors serve for a term of one year and thereafter until their successors have been duly elected by the stockholders and qualified.  NU-MED’s officers serve for a term of one year and thereafter until their successors have been duly appointed by the Board of Directors and qualified.     

_________________________________

Smith Corporate Services, Inc. (dba SCS, Inc. or “SCS”) is owned and controlled by Karl Smith.  SCS is owed $230,100 in principal and $81,944 in accrued interest by NU-MED.  Under the terms of the notes, the notes may be converted into shares of the Company’s common stock at the rate of one share of common stock for every $0.01 in principal and interest.  The notes may not be converted, at any one time, into more than 4.9% of the Company’s issued and outstanding shares of Common Stock unless a change of control occurs or a fundamental transaction which would include a merger, reorganization or asset sale. If SCS’s ownership has not previously been reduced to less than 4.9% of the number of shares outstanding, then the limitation shall be 9.9%. In addition to the shares owned by SCS, a trust of Mr. Smith’s wife owns 150,000 shares.

26

Control by Existing Stockholders

Current management has over 43% of the issued and outstanding shares of common stock.  As a result, it is likely they will be able to control NU-MED and will most likely continue to be in a position to elect at least a majority of the Board of Directors of NU-MED, to dissolve, merge or sell the assets of NU-MED, and generally, to direct the affairs of NU-MED.  Additionally, a principal shareholder, SCS, is owed funds under convertible promissory notes which may be converted into shares of the Company at the rate of one share of common stock for every $0.01 in principal and interest.  The notes may not be converted, at any one time, into more than 4.9% of the Company’s issued and outstanding shares of Common Stock unless a change of control occurs or a fundamental transaction which would include a merger, reorganization or asset sale.

Dividends

We have not declared any cash dividends with respect to our common stock, and do not intend to declare dividends in the foreseeable future.  Our future dividend policy cannot be ascertained with any certainty.  There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our securities.

Securities Authorized for Issuance under Equity Compensation Plans

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE.

Transactions with Officers and Directors

On January 31, 2018, the Company extended an employment agreement to Mr. Keith Merrell to become its full-time Chief Financial Officer.  The agreement replaces the consulting agreement previously entered into when Mr. Merrell served as part-time CFO.  The employment agreement provides for a payment of $2,000 per month and 2,000,000 shares of restricted common stock which is to be earned at the rate of 500,000 shares per calendar year.

On August 5, 2016, Dr. Craig Morrison returned to the Company 2,000,000 shares of restricted common stock which is part of the 4,000,000 shares which had been issued to him for his services as a director and medical advisor.  The 2,000,000 shares of stock were retired at their par value of $2,000, reducing the number of shares issued and outstanding.

Except as set forth above, there were no material transactions, or series of similar transactions, during our Company’s last five fiscal years, or any currently proposed transactions, or series of similar transactions, to which we or any of our subsidiaries was or is to be a party, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year-end for the last three completed fiscal years and in which any promoter or founder of ours or any member of the immediate family of any of the foregoing persons, had an interest.

27

At this time, we have one independent director.  Four of our directors are founders and major shareholders of NU-MED.  Additionally, given the limited size of our board of directors, we have not set up any committees of the board of directors such as compensation, audit or nominating committees.  As our operations expand, we hope to be able to add outside directors and set up these committees, but at this time, do not know when we will be able to add additional directors and set up such committees.

Transactions with Promoters

There have been no transactions between the Company and promoters during the last fiscal year.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company has selected Sadler, Gibb and Associates LLC as its independent public accounting firm.  Fees paid for their services were:

1) Audit Fees - The aggregate fees incurred for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements and review of our quarterly financial statements is approximately $16,600 and $16,600 for each of the years ending December 31, 2017 and 2016, respectively.

2) Audit-Related Fees. $0 and $0.

3) Tax Fees. $0 and $0.

4) All Other Fees. $0.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

We do not have an Audit Committee; therefore, there is no Audit Committee policy in this regard. However, we do require approval in advance of the performance of professional services to be provided to us by our principal accountant. Additionally, all services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.

28

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMNET SCHEDULES

  (a)(1)FINANCIAL STATEMENTS.  The following financial statements are included in this report:

Title of Document                                               

Page

Reports of Independent Registered Public Accounting Firms  

F-2

Balance Sheets                                               

F-3

Statements of Operations                                    

F-4

Statements of Changes in Stockholders’ Deficit

F-5

Statements of Cash Flows                                    

F-6

Notes to Financial Statements                               

F-7

  (a)(2)FINANCIAL STATEMENT SCHEDULES.  The following financial statement schedules are included as part of this report:

     None.

 (a)(3)EXHIBITS.  The following exhibits are included as part of this report:

 SEC

Exhibit    

 Reference

Number      

 Number   

Title of Document  

 Location

Item 3      

Articles of Incorporation and Bylaws