United-Guardian, Inc. ($UG)

Okay. Good morning. I'm Donna Vigilante, President of United Guardian, and I hereby call to order the Annual Meeting of the Stockholders of United Guardian, Inc., which is being held by video conference this 13th day of May 2026. Andrea Young, Secretary of the corporation, is present and pursuant to the bylaws of the corporation will act as Secretary of the meeting.

Good morning. I present a copy of the notice of this meeting, which has been sent to each stockholder of record together with proof of mailing of such notice. I ask that this notice and the affidavit of mailing be filed on the records of the corporation.

I move that the notice of this meeting, together with the affidavit of mailing be filed in the records of the corporation. I second the motion.

All those in favor of the motion, say aye. [Voting]

Aye.

Aye.

All those opposed, say no. [Voting]

The motion is carried and the Secretary is directed to file the notice and affidavit of mailing with the record of the corporation.

We have a list of stockholders of the corporation as of March 30, 2026, the record date fixed by the Board of Directors for those stockholders entitled to notice of this meeting. This list has been prepared and certified by Continental Stock Transfer and Trust Company, registrar of the corporation. May I ask for a motion that the list be filed in the records of the corporation.

I move that the list be filed in the records of the corporation.

I second the motion.

All favoring the motion, say aye. [Voting]

Aye.

All opposed, say no. [Voting]

The motion is carried and the Secretary is directed to file this list of stockholders with the records of the corporation. I will now call for nominations for inspection of election.

Sorry, I nominate Andrea Young and Barbara Ricardo to be inspectors of election.

I second the motion.

Are there any further nominations? If not, I declare nominations closed. All those in favor of the election of Andrea Young and Barbara Ricardo as inspectors of election, please say aye. [Voting]

Aye

Aye

All those opposed say no. [Voting]

Andrea Young and Barbara Ricardo have been elected inspectors of election. Will the inspectors please sign the oath of office and turn it into the company at the end of this meeting. The inspectors of election have reported the holders of a total of 3,637,702 shares are present by proxy. The total number of shares present constitutes a quorum and represents 79% of the 4,594,319 shares outstanding. The meeting may now proceed to business. Copies of the company's annual report for fiscal year 2025 have been mailed to all stockholders of record. In view of this fact, I ask for a motion dispensing with the reading of the report and directing the secretary to file the report with the records of the corporation.

I move that the reading of the annual report be dispensed with and that it be filed with the records of the corporation.

I second the motion.

All those in favor of the motion, say aye. [Voting]

Aye.

All those opposed, say no. [Voting]

The motion is carried and the Secretary is directed to file the annual report with the records of the corporation. The next order of business is the election of directors of the corporation for the coming year. I ask for nominations for the office of director.

I nominate the following as directors of the corporation for the ensuing year: Ken Globus, Lawrence F. Maietta, S. Ari Papoulias, Arthur M. Dresner, Andrew A. Boccone, Catherine Kolinski and Donna Vigilante.

I second the nominations.

Are there any further nominations? I ask for a motion to close the nominations.

I move that the nominations be closed.

I second the motion.

All those in favor, say aye. [Voting]

Aye.

All opposed, say no. [Voting]

The motion is carried. The proxies contain the following proposals: to elect 7 directors to serve until the next annual meeting; to approve the holding of an advisory vote every 1, 2 or 3 years on the compensation paid to the company's named executive officers; to approve on an advisory basis, the actual compensation paid to the company's named executive officers; to ratify the appointment of Grassi & Company, CPAs P.C. as the independent public accountants of the company for the fiscal year ending December 31, 2026. Since there is no voting taking place at the meeting today, I can report that based on the information provided to the company by Continental Stock Transfer and Trust Company, the company's stock transfer agent, the voting results were as follows: On the proposal to elect 7 directors to serve until the next annual meeting. Ken Globus received 2,300,653 votes for, 385,055 votes against, 6,960 abstentions, 945,034 broker nonvotes. Lawrence F. Maietta received 2,269,236 votes for, 324,776 votes against, 98,656 abstentions, 945,034 broker nonvotes. Arthur M. Dresner received 2,532,497 votes for, 61,445 votes against, 98,726 abstentions, 945,034 broker nonvotes. Andrew A. Boccone, 2,498,527 votes for, 95,415 votes against, 98,726 abstentions, 945,034 broker nonvotes. S. Ari Papoulias, 2,503,521 votes for, 90,421 votes against, 98,726 abstentions, 945,034 broker nonvotes. Catherine Kolinski, 2,525,859 votes for, 71,585 votes against, 5,224 abstentions, 945,034 broker nonvotes. Donna Vigilante, 2,319,320 votes for, 356,944 votes against, 7,404 abstentions, 945,034 broker nonvotes. On the proposal to approve the holding of a vote every 1, 2 or 3 years on an advisory basis on the compensation paid to the company's named executive officers, the proposal to do so every year has passed. The vote totals were for every year, 2,576,591; every 2 years, 9,558; every 3 years, 85,899; abstentions, 20,620; broker nonvotes, 945,034. On the proposal to approve on an advisory basis, the actual compensation paid to the company's named executive officers, the proposal has passed. The vote totals were 2,562,179 votes for, 115,843 votes against, 14,646 abstentions, 945,034 broker nonvotes. On the proposal to ratify the appointment of Grassi & Company, CPAs P.C. as the company's independent public accountants for the fiscal year ending December 31, 2026. The proposal has passed. The vote totals were 3,566,216 votes for, 45,290 votes against, 26,196 abstentions. I call for a motion that the vote certification of the inspectors of election be filed with the records of the corporation.

I move that the vote certification of the inspectors of election be filed with the records of the corporation.

And I second the motion.

All those in favor, say aye. [Voting]

Aye

Aye

All opposed, say no. [Voting]

The motion is carried. The complete voting results will be posted on our website. At this time, we'd like to have a discussion and question and answer. I will share my screen.

Can I ask a question?

Sure.

Can you tell us -- my name is Douglas Ruth. I'm from Lenox Financial Services. I'm a stock broker. Could you give us an update on what's happening with the pharmaceutical business? It seems like that business is moving in the right direction.

Sure. I will be happy to do that. I'm going to go through the presentation first because part of that will touch upon that, and then I can follow up with any additional questions that you might have, if that's okay.

Yes.

Okay. Great. Okay. Can everybody see my screen? Okay. So today's agenda, we want to talk about some of the key achievements that we've had throughout the year. We'll talk about the financial performance for fiscal year 2025. We'll talk about the financial performance for Q1 2026 and then some of our strategic goals as where we're headed. So in terms of key achievements, we have expanded the market this year with signing a new distribution agreement with Azelis to expand the reach of our medical lubricants. We added a new product to our portfolio for the sexual wellness market. We initiated the project to expand formulary status for Renacidin, which has been very successful so far, and we're happy to see where that is going to go. And we signed a new agreement with Brenntag for a new territory in the personal care space. In terms of financial performance, so fiscal year 2025, we did see a decrease in net sales from $12,181,971 to $10,545,468. We also saw some decreases in retained earnings and stockholders' equity, retained earnings shifting from $11,423,434 to $10,772,580 retained earnings and the stockholders' equity $11,882,866 to $11,232,012. And that decrease was mainly due to the reduction in cosmetic ingredient sales, along with a reduction in net income compared with 2024. If we look at the breakdown of that market, you can -- I'm not sure what happened with my screen. But if you could see the breakdown for 2024, we had 17% in the medical lubricants, 44% in cosmetic ingredients and 39% in pharmaceuticals, where that shift then in 2025, you're seeing 20% in medical lubricants, cosmetic ingredients at 29% and 51% in pharmaceuticals. So there was a shift there. We're starting to see an increase in pharmaceuticals, which is part of our efforts that we are working on to continue to expand Renacidin. Due to this market mix, pharmaceuticals do have a higher cost of sales, which does impact the earnings compared to cosmetic ingredients and medical lubricants. When we look at Q1 2026, we are seeing an increase. So we did see net sales increase in Q1 due to higher sales in pharmaceuticals and cosmetic ingredients sales started to rebound. Retained earnings and stockholders' equity also rose slightly due to a combination of increased net income and decreased dividend payments compared to Q1 of 2025. So we're happy to see that Q1 is starting to rebound. In terms of the breakdown, we're looking at the product mix. In Q1 2025, we're seeing medical lubricants at 25%, cosmetic ingredients at 28% and pharmaceuticals at 47%. And in Q1 2026, we're seeing medical lubricants at 20%, cosmetic ingredients, again, rebounding a bit to 30% and pharmaceuticals again increasing to 50%. So again, that does impact earnings because the cost of sales for pharmaceuticals are higher compared to cosmetic ingredients and medical lubricants. That does kind of show that the increase in pharma activities that we're doing is starting to pay off where we're seeing those increases in those sales. So in terms of strategic goals, what we're looking moving forward, we are asking all of our cosmetic ingredient distributors to have growth goals, and those goals are being monitored during our business review. So we are looking for them to increase sales and provide additional drivers for business, increased customer base, increased portfolio. So we are really looking to increase the business there in personal care. For product expansion, as was mentioned, we have been expanding our resources for Renacidin and expanding the market there with a payer and health care practitioner outreach. And with the payer outreach, we're starting to see some real traction there where that is allowing us to reduce the barrier for HCPs to prescribe Renacidin which allows more patients to have access to the product. So we're starting to see that shift. It's looking like that's really starting to impact the way the product is received and patients are able to access the product, and we'll continue to work on that. We also want to make sure that the outreach is available so that doctors know that these products are -- have more formulary status and are able to prescribe them to patients without that barrier existing. For product innovation, we have two new products that are launching later this year and early next year, one in skin care, one in hair care. The skin care product is a 24-hour hydration product and the benchmark against that is HA. So we're hoping that we can get some increased business with this product, which is a little bit different than the other products that we have. And the hair care product is a natural ingredient, which is very popular now in personal care. A lot of customers are looking toward natural ingredients. And this is different for the hair care market where it typically doesn't have as many natural ingredients. So we're looking forward to seeing some increased business with that product. Customer success, we are continuing to build the relationships with our customers. We participate in webinars, customer seminars, joint customer visits with our distributors, and we are able to get closer to the customer, understand their needs, get their feedback, which helps us to develop new products and to provide additional information so that they can be incorporated into finished formulations. In terms of distributor partnerships, we continue to expand those relationships to better serve our customers. Again, we signed the distribution agreement with Azelis this year. We also signed distribution agreement with Brenntag for a new territory. So we are constantly looking to find ways to improve our distribution partnerships and serve our customers. And we also have growth initiatives that the company has created a growth committee for. So these are for new opportunities, new ways to expand our business. They meet regularly and discuss different ideas and things that the company can pursue in terms of growth and making sure that we're constantly pursuing growth opportunities. I don't know if that answered some of your questions on the Renacidin, if there's additional information that you'd like to.

What has to happen in order to -- for the -- with the two pharmacy benefit managers in order to further increase the sales here?

So as -- I think we need to ensure that the healthcare providers are aware that the products have better formulary access, which is part of the next step in our initiative for Renacidin. So we are exploring ways in which we can have additional outreach to HCPs. So they're aware that formulary barrier has been removed in some cases, and they can now prescribe without having that as a barrier for patients to access the product.

Could you maybe simplify what -- so possibly a doctor recognizes that your drug might help? And what is the roadblock to the patient maybe being able to be given that drug? Maybe you can explain that.

Sure. I think the bigger barrier there is more about the insurance landscape. So if a doctor prescribes Renacidin and it isn't covered by the insurance carrier, then the patient may not be able to get the product. And by reducing that barrier, having it available on formulary gives doctors more incentive to then prescribe because they know the patient isn't going to come back to them and say, "Well, I can't get this product, what else can I do? So I think that's where the limitation was existing in terms of a barrier. Now that barrier is starting to be removed. So as doctors know, okay, if it's -- there's more formulary status, there's less likely that the patient won't be able to get the product, and they'll be able to start that treatment.

Now why wouldn't the drug be -- the drug is known to help certain people, why wouldn't the drug be available?

It really depends on the payers and how they create their formularies. So that's part of the work that we're doing is to understand how to ensure that the payers that develop formularies understand the value of the drug.

Can I add something to that? Just real quick, just to make sure that there's no misunderstanding here. It's not that the product is not available. The product is available nationwide through multiple distributors. It's a question of whether the patient can afford it. If it's not on their formulary, they're not going to get reimbursed for it or it's not going to be covered. And it's -- for a lot of people, it's just too expensive. So it's not an availability issue. It's just an affordability issue.

And can you give us an idea of like how much it might cost?

I mean I personally don't know what the distributors resell it for. That's really up to them. I mean it's not a huge markup. But all I can tell you is that over the years, a lot of people have told us the people that don't have coverage for it is that it's just too expensive for them.

Well, is it like -- is it $100 for a treatment? Is it $200? Maybe just give us some perspective of how much it might be to help us understand.

Do you remember what their markup is on it?

Yes, it will vary by retail pharmacy as well because it gets sold into a retail pharmacy. So the pricing could be very different.

Well, what is the wholesale cost? So let's just say that they double the cost. So is it -- do you sell it to somebody for $100 and they resell it for $200...

What's our price per bottle on...

Andrea, do you know the wholesale acquisition cost for Renacidin?

Yes, $182.14.

For a box.

Yes.

Yes. So that's for 6 bottles.

Okay. And then what is -- what would be a normal -- how many bottles might a person need to be in a normal treatment cycle?

No, it's 30 bottles in a box...

Yes, 30 by 30 in a box. And it really depends on what the doctor is prescribing. So the volume varies by patient.

Well, would you need -- would one box take care of a person who has a problem, do you think?

Typically, there would be a box prescribed per month, maybe 2, depending on the units that the patient needs.

All right. So you need -- so 2 boxes and then how many months do you need to take the drug?

Well, most people that need the product are on it typically for the lifetime of the catheter that they have, which most of those people have indwelling catheters, which is permanently placed, but they're there.

So you need 2 boxes per month for the rest of your life possibly.

1 or 2 boxes.

Yes. It depends on -- of course, it depends on the patient and what they're...

A box and a half. I'm going to go with the box and a half for the rest of your life.

Okay. All right. Well, that gives us some perspective. Now we can understand. I mean that -- obviously, the distributor has the right to make some money. So if they double the cost, it's $360 for one box. So it's $540 a month for -- possibly for the drug. Okay. My second question was -- with the Brenntag going -- the possibility of going to France, I was wondering if you could explain to us how you chose France and what you think might happen there, how they chose France or maybe you chose France?

Yes. I mean, France is a big market for personal care. And when we're looking at that market, we know that it is shifting to a more natural space where in the past, maybe some of the synthetic ingredients were more popular. Now it's moving to more natural. We felt that Brenntag had the right positioning to access the customers in France for the natural products that we're looking to promote.

Do you think that in 2026 that you might be able to secure a customer for the sexual awareness products?

Yes. We do believe that we will have customer for sexual wellness in 2026.

Initially, you thought that there might be -- you had a prospect for 2025. Did that prospect perhaps shift from 2025 to 2026?

I believe that may have been that the project didn't move forward for the customer. So sometimes that happens where a customer has a project and then they were planning to launch and then it just gets delayed or the project gets put on hold. So -- but we do believe that there's a customer that we know of now that we will be purchasing and we should see those sales in 2026.

And how about the competitors? Are they having any success with their products for the sexual wellness, the natural products?

We really haven't seen a lot of competition in this space because it's a very -- it's a newer space. It's a niche space. And I think from what we've heard from our distributor, there's a lot of interest in the sexual wellness space. There's a lot of customers that are interested to get into this space. There are some regulatory hurdles that they have to consider. So it is a little bit more slow moving. But we really haven't heard of a lot of competition directly in that space as of right now.

Okay. I want to thank the company and the Board of Directors for hosting the meeting and then answering my questions.

Are there any other questions?

Yes, I have a question, Ken [indiscernible]. One of the headwinds that you mentioned in the past year was dealing with the various tariffs. I noticed in the news recently that companies are now starting to get refunds from the tariffs. I believe there's something like 330,000 importers that are requesting tariff refunds. I was wondering what amount of money do you see Guardian getting back from these tariffs and these tariff refunds and when we might expect to receive that money?

Andrea, do you want to take that question in terms of tariffs?

Sure. So in terms of the tariffs, we -- United Guardian are not the importer of record for any products coming in. So we are not doing any refunds for tariffs because we didn't pay any direct tariffs as a result.

Okay. We were talking about Renacidin quite a bit. I noticed going back many years, it seems like about every 5 or 10 years or so, you run into a problem with your contract manufacturers. I was wondering what current backups you have if you were to run into a problem again or even if you have tried to produce this product on your own?

It's a very specialized process. And with an FDA approved drug, you can only have certain contract manufacturers that have to be approved. So it is a concern. It's always something that we have to be mindful of. We do work very closely with our contract manufacturer to make sure that things are running smoothly and that there are no issues that are on the horizon. Unfortunately, sometimes there are things that come up that we can't foresee. And we've had some issues in the past there. But it's a very highly specialized type of process and not something that we have the capabilities to do in-house and would have to have that manufacturer approved by the FDA in order to have a secondary contract manufacturer.

Okay. Again, talking about Renacidin, it's been a product of yours for many, many years. Why has it been so difficult to try to get into international markets?

I think the main driver there is I think we needed to ensure that we had the success in the U.S. market to make sure that we had a very good understanding of how to take this forward. And I think that's getting additional sales here and having more interest in the product, I think that will help us move to some of the other markets that we're looking at and defining which markets are going to be the best ones for us to start our introduction into international spaces.

Glancing at the proxy statement, I noticed that we can see the bonuses that are received by top executives. What we see in this year's proxy under the heading of 2025 is that actually the bonus that was received last year?

Let me look at that. I believe so, right? Andrea, if you...

Yes

I believe so.

It would be year paid.

Yes. Paid in 2025.

Okay. So I believe according to the report, you just received your 2026 bonuses in April of this year for how you produced last year.

Yes

Can you give us an idea of did those bonuses increase, decrease or remain the same from the previous year?

They were reduced from the previous year.

Okay. Also in the proxy statement, we noticed that top executives have made a decision not to participate in the ownership of United Guardian. Can you give any philosophical reasons or financial reasons why you made that decision?

Ken, is that something you want to answer?

No. No, I would just say that No, we don't.

Ken is the one who is the shareholder. I'm sort of focusing on the other two or three.

No, I understand what the question is. It -- that's up to the individual officers and directors, what they -- where they want to put their investments. We don't tell people to buy stock or not buy stock in the company. It's really their own choice. I don't think it reflects on their attitude towards the company at all, but it's a very individual decision about where somebody puts their financial resources.

Okay. So you don't think it's a kind of lack of faith in the company?

I don't believe that's the case, no.

One final question. I think Mr. Globus might have the best insight into this. Of course, the company has been a public company for over 40 years now, something like that.

Longer than that. 1950s.

Okay. I thought it went public in 1980s.

That was a merger of the 2 companies that incorporated into the current company, United Guardian. Guardian Chemical Corporation was merged into United International Research, which was a public company formed in the 1950s. So that merger created United Guardian in the 1980s.

Okay. So my question is pretty basic. Companies basically go public for, I guess, two major reasons: one, to raise capital; and secondly, possibly to let corporate insiders get a chance to monetize their holdings. Neither of those reasons seem to apply to Guardian in its current format. So I just asked the basic question, why has the company decided to remain a public company? Obviously, there's various expenses that occur for a public company, various issues with having to hold these meetings, which, of course, takes some of your time away from what you want to be doing. So Ken, maybe you're the best one to answer that question.

Well, I can just -- we have looked into it. There was one time many years ago that we were seriously looking at the possibility and met with some people and realized that the cost of doing it was just too great at that time. Even at the current stock price, it would mean taking on a lot of debt, which we weren't willing to do. So we just felt that there was enough of a benefit. Yes, there was certainly a cost, time and money in being a public company. But I also feel that we do a lot ourselves. I think we keep those costs to a minimum compared to a lot of other companies. I think our expenses to remain public are relatively low compared to many other companies. And again, I think the primary reason really was just the cost of doing it.

So you would sort of agree that being public doesn't really give you the benefits of most public companies.

I'm sorry, could you repeat that?

Well, just repeating what I had said before, the goal of going -- the purpose for going public doesn't seem to apply to Guardian in its current format.

I'm not sure I can really answer that. It's not like we have really an option -- a practical option now to do anything to change that, whether we should have been a public company or not, you have to go back 60 years to discuss that issue. But it is what it is right now. And I think a lot of people are satisfied. Obviously, we'd like more. We'd like to grow the sales as our stockholders would like us to do. But our yield is still pretty good compared to what you can get right now in the banks. I think we're somewhere in the 7%, 6%-7% rate right now. And obviously, our goal is to increase sales and increase that dividend. So yes, we're very small for a public company. But I think we've been pretty successful, and we plan to grow that more significantly in the future. So there's not really much I can see doing about it right now. Again, it's just -- there's really not any motivation on the part of the company right now to incur the kind of debt that would be involved in going private at this point.

Are there any other questions we can answer?

No. I move that the meeting be adjourned.

I second the motion.

All those in favor, say aye. [Voting]

Aye.

Aye

All those opposed, say no. [Voting]

The motion is carried and the meeting is adjourned. Thank you very much for attending the Annual Meeting for United Guardian.

Thanks, Donna.

Thank you.

Thank you.