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. Basis of Presentation

The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments which are necessary for a fair statement of

the results for interim periods have been included.





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b. 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.

c. Cash and Cash Equivalents

The Company considers all deposit accounts and investment accounts with an original maturity of 90 days or less to be cash equivalents. The cash balance we currently have on deposit is within the limits for which the FDIC insures.

d. Property and Equipment

Property and equipment is stated at cost. Expenditure for minor repairs, maintenance, and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. Expenditures, exceeding $500, for new assets or that increase the useful life of existing assets are capitalized.

Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated are five to seven years.

e. 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 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.




f. Earnings per Share

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding during the period of the financial statement. The company includes shares subscribed but unissued in its calculation of earnings per share.

Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. As of December 31, 2020 and 2019 there were 28,902,684 and 34,433,100, respectively, potential dilutive shares that needed to be considered as common share equivalents. As of December 31, 2020 and 2019 the dilutive shares were excluded from the calculation for diluted earnings per share as there was a net loss and their inclusion in the calculation would be anti-dilutive.






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g. Concentrations and Credit Risk

The Company has relied on a small group of investors to fund its operations. If this group becomes unable or unwilling to provide additional funding, the Company may be unable to remain in business or to execute on its business plan.

h. Income Taxes

Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.




i. Stock-based Compensation

The Company, in accordance with ASC 718, Compensation - Stock Compensation, records all share-based payments to employees at the grant-date fair value of the equity instruments issued. In accordance with ASC 718-10-30-9, Measurement Objective - Fair Value at Grant Date, the Company uses the closing price of the stock, as quoted by NASDAQ, on the date of the grant. The Company believes this pricing method provides the best estimate of fair the fair value of the consideration given. Compensation cost is recognized over the requisite service period.

The Company, in accordance with ASC 505, Compensation - Stock Compensation, establishes the value of equity instruments issued to non-employees for goods and services by using the closing price of the stock, as quoted by NASDAQ, on the date of the grant. The Company believes this method fairly establishes the value of the goods and/or services received.

j. Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, "Income Taxes Topic 740-Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which intended to simplify various aspects related to accounting for income taxes/. ASU 2019-12 removes certain exceptions to the general principles of Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. The effective date will be the first quarter of fiscal year 2021 and early adoption is permitted. Adoption of Topic 740 is not expected to have a material effect on the Company's condensed financial statements.

The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position and cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations.

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 that 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.






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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, submission of products to the FDA for approval 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 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 during 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, 2020, we had assets of $557,135 with current assets of $537,523 and liabilities of $89,432. Our current assets consisted of cash in the amount of $188,506 and prepaid expenses in the amount of $349,017. At December 31, 2019, we had assets of $45,779 with current assets of $13,958 and liabilities of $416,211. We currently have sufficient cash to pay ongoing expenses for the next month, 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, 2020, we received cash for the purchase of common stock in the amount of $386,842. 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, 2020, we had no revenues, operating expenses of $1,994,677 and interest expense of $14,322, resulting in a net loss of $2,008,999. This compares to a net loss for the year ended December 31, 2019 of $1,036,825. Operating expenses in 2020 increased $975,247 over 2019 due primarily to professional and consulting fees expense of $1,199,609 which resulted from stock-based compensation consulting agreements. The 2020 expense is $565,954 higher than the $633,655 expense recorded in 2019. Payroll expense was $428,656 higher in 2020 than 2019, primarily as the result of a $500,000 stock-based compensation charge recorded in 2020. We will continue to experience operating losses as we move forward with patent filings and retain additional consultants to assist with our FDA filing and ongoing development work. We were able to utilize our stock to pay





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consultants we have used to date 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.

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.

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