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Equity | Healthcare / Wound Care

INITIATION PRIMER (March 21, 2017)

United Health Products, Inc.(OTCQB: UEEC, Target Price: N/A)

We initiate preliminary coverage of United Health Products, Inc. (OTCQB: UEEC, “United Health Products”). We see United Health Products as a speculative microcap investment option in healthcare sector targeting the multi-billion dollar hemostatic and sealant markets. United Health has developed a patented hemostatic gauze intended for the healthcare and wound care sectors. The company’s flagship product, Hemostyp®, is an all natural hemostatic agent derived from regenerated oxidized cellulose, which has been shown to quickly control bleeding from open wounds and body cavities. UEEC has recently filed an application with the FDA that, if approved, would expand the indications for Hemostyp® to include new opportunities including use in general surgery. The company also continues to work towards sales distribution advancements in the retail, veterinary, dental, and dialysis markets.

United Health Products is based in Henderson, NV, and is led by CEO Douglas Belpate, an executive with over 30 years of experience in the medical device and wound care sectors. This note is an initiation primer and hence we are not issuing a price target or forward estimates for United Health Products at this time. We expect to issue a full initiation piece during calendar 2017.

Hemostyp® an all-natural approach to wound care

UEEC’s flagship Hemostyp® Topical Hemostatic Dressing is an all natural hemostatic agent. Hemostyp® has been shown to produce hemostasis in less than 45 seconds when applied to an open wound. The product has received FDA approval as a Class 1 device designed to absorb exudate//drainage from superficial wounds and help control bleeding, and is sold in prescription and over-the-counter formulations. Initially the company has targeted the medical, sports, dental, military and veterinary sectors. Hemostyp® is a 100% cellulose product that is made through a patented process from regenerated cotton cellulose, and then oxidized and etherized to become water-soluble. When contacting blood and exudates, the Hemostyp® cellulose expands into clear gel, resulting in a process of adhering and creating pressure to seal the wound.

UEEC files for expanded use indications for flagship Hemostyp® products under 510(k) program for surgical setting

United Health Products has recently taken a significant stride forward on the regulatory front. The company seeking to expand the indications for its flagship Hemostyp® regenerated cellulose product. The company filed for expanded use indications for Hemostyp® under its current 510(k) application with the FDA. Hemostyp® is already cleared as a Class 1 device, which is indicated for topical wound dressing for temporary control of external surface bleeding.

The amended application seeks to achieve Class 2 clearance, indicated for use for internal procedures for controlling and managing bleeding.

Stock Details Company United Health Products, Inc. OTCQB: UEEC Sector / Industry Technology / Wound Care Recent share price $0.08 Shares o/s (mn) 152.9 Market cap (in mn) $11.5 Enterprise Value (in mn) $11.4 52-week high/low $0.10 / $0.00

Source: Yahoo! Finance, prices as of 03/17/2017

Business

United Health Products Inc. (UEEC) develops, manufactures, and markets patented hemostatic gauze, for the healthcare and wound care sectors. The product, HemoStyp®, is derived from regenerated oxidized cellulose, which is all natural, and designed to absorb exudate/drainage from superficial wounds and helps control bleeding. UEEC is focused on identifying new markets and applications for its products and increasing sales in its current markets.

Investment Highlights • If approved the expanded indications in the

company’s 510(k) application would open up the market for general surgury.

• The global hemostatic and sealant markets were estimated at $6.5 billion in 2016 and expected to grow at double-digit rates in 2017, surpassing $7 bill ion.

Key Risks • Established competitors with strong brands, deep

financial resources and established distribution • Lack of financial resources • Limited operating history

Share price performance ($, LTM)

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INITIATION PRIMER (March 21, 2017)

If approved, the expanded indications would allow Hemostyp® expanded applications of use in surgical settings, significantly increasing the market potential for the company. In an announcement describing the amended 510(k) application, UEEC management stated that it expected a response from the FDA within 90-180 days.

Source: Company materials, SeeThruEquity Research

UEEC targeting significant market opportunity with Hemostyp@

If approved, the expansion of indications for Hemostyp® would likely increase total available market for UEEC. Indeed, if the company is successful in its regulatory efforts, Hemostyp® would be cleared as a Class 2 device, which management believes would enable indications for general surgical procedures. UEEC believes that Hemostyp® will have initial applications in both the hemostatic and sealant markets, which were estimated to be $6.5bn globally in 2016. These are very attractive end markets, which are expected to grow at approximately 10% a year through 2017E, totaling $7.7bn.

Source: Company materials, SeeThruEquity Research

Encouraging order activity in veterinary market

In January 2017, UEEC held a call with investors and stakeholders to update progress in new distribution channels, and reported encouraging order activity in the veterinary market. During the call, management stated that the company is progressing with its distribution agreement with Animal Health International, and that the company began its initial rollout for Patterson Veterinary and Animal Health International in December. In the call UEEC noted that combined Patterson Veterinary and Animal Health International are the largest veterinary product suppliers in the United States, with 85 distribution centers, which service more than 8,000 veterinary clinics around the country.

UEEC CEO Douglas Beplate stated on the call that the company had agreed on an initial rollout of five SKUs with Patterson Veterinary and Animal Health International, which would initially cover 15 distribution centers. UEEC shipped 100,000 units to these distribution centers in December and management stated that another 200,000 units had been scheduled for March. Patterson has over 400 inside and outside sales representatives, who will be promoting Hemostyp® during calendar 1Q17, and UEEC is hopeful that initial results will warrant further penetration into the 85 center distribution network.

Update on additional sales distribution activities, end markets

UEEC management also provided an update in other areas with the potential to grow revenues in January. The company continues to work towards its retail agreement with Total Resources International (TRI), and stated that it has begun to fill initial orders here. TRI is incorporating Hemostyp® gauze in its first aid kit, a and is seeking distribution at major retailers including Walmart, according to the company.

UEEC also continues to provide service in the dental market through distribution agreements with Mediacom, whose customers include Henry Schein and Patterson Dental. On the international front, the company has signed distribution agreements in India, Australia, New Zealand, Africa and South Korea and is assisting with product registration and compliance in these countries. Finally, Beplate stated that there was still an

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Equity | Healthcare / Wound Care

INITIATION PRIMER (March 21, 2017)

opportunity to work with Fresenius, using Hemostyp® in a post-dialysis application. Beplate indicated that the companies had participated in extensive testing and trials with Fresenius, and that UEEC expected to have an update soon. We look forward to learning more about the Fresenius relationship and international opportunities in future quarters.

Source: Company materials, SeeThruEquity Research

No estimates or price target at this time

As we noted at the outset of this report, we are publishing neither estimates nor a price target for UEEC at this time. We expect to issue a full initiation report covering UEEC in the future.

Management Team

Douglas K. Beplate, Chief Executive Officer

Douglas Beplate has served as Chief Executive Officer of UEEC since November 2014 and Chief Operating Officer of the Company since November 2013. Mr. Beplate has been working on the development and marketing of the Hemostyp gauze since 2010. Mr. Beplate's present responsibilities include daily operations and oversight of sales, marketing, product development and intellectual property. From 1996 to 2007, Mr. Beplate was founder and President of Emergency Filtration Products, Inc. (EFP) where his responsibilities included product design, research and development, patent work and production. During his time at EFP, Mr. Beplate was awarded a grant through California State University San Bernardino for development of nanotechnology for the U.S. government and military sector. Prior to his position at EFP he was a consultant to various medical products firms from where he was involved in research and development, and product design.

Nate Knight, Chief Financial Officer, Director

Nate Knight has served as a director of the Company since December 2012 and Chief Financial Officer of the Company since 2013, brings to the Company years of business experience and knowledge of the Company's HemoStyp product. Mr. Knight was a principal in Med Spring, Inc., the Company that originally developed the HemoStyp gauze products prior to the Company's acquisition of the rights to same. Mr. Knight has been a public accountant for over 30 years and has owned and operated his own accounting business. Mr. Knight previously held a Series 7 license and since February 2012, he has been employed by an internal auditor with Prime Alliance Bank. Between 2004 and 2010, Mr. Knight served as Chief Financial Officer of MedSpring Group Inc., a privately owned medical device company. Mr. Knight with his extensive accounting experience and particular knowledge of the Company's HemoStyp product line as well as its potential applications, makes him an ideal candidate to continue to serve on our Board of Directors as an independent director.

Louis Schiliro - Director of Operations

Mr Schiliro has been working with United Health Products for several years and has been instrumental in creating the marketing, sales and manufacturing platform that has allowed for Hemostyp to expand in reach and scope. Mr Schiliro is a graduate of West Virginia University and also has earned his MBA in International Finance from George Mason University. He has over 20 years of Operational experience in the First Responder and Safety market.

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Equity | Healthcare / Wound Care

INITIATION PRIMER (March 21, 2017)

Nathaniel B. Knight III: Director

An accounting professional with more than 34 years' experience in setting up and directing accounting departments, system reviews and financial reporting and analysis for public and private corporations and small businesses. Expertise includes tax preparations, automated general ledger accounting systems, audit management, and training of staff.

Served as Chief Financial Officer of Medspring Group, Inc., a privately owned medical device company, from 2004-2010. From 1978-2004 Mr. Knight served as President and CEO of Four Corners Financial Services Inc in Moab, Utah, where he performed public accounting for small businesses, professionals, non-profit organizations, and local government. Mr Knight also served as County Councilman for Grand County, Moab, Utah (4 yrs) and as a Board Member for the Grand County School District, Moab Utah. (9 yrs).

Risk Considerations

Industry competition

UEEC operates in a highly competitive healthcare industry. The company is particularly focused on the disposable medical supply market in the United States. This market is competitive and is dominated by large companies including Baxter International, Bristol-Myers Squibb Company, Johnson & Johnson and 3M Company. These companies have greater access to financial resources, more established brand recognition, and a large sales distribution network. Additionally, they have access to more advanced research and development facilities, and more resources to dedicate to complying with federal and state regulations. UEEC does focus on a subset of this market – hemostatic products. The company’s hemostatic products include gauzes, gels, bandages and powders. Management believes the market for its hemostatic products is characterized by less intense competition, comprised of smaller, privately-held companies and Johnson & Johnson, which manufactures Surgicel®.

Financial Resources and Going Concern

UEEC has a history of operating losses and a does not currently generate cash from its operations. As of September 30, 2016, the company had an accumulated deficit of $12.6mn. In its 3Q16 form 10-Q, UEEC stated that its CEO Douglas Beplate has agreed to advance funds or make payments of the Company's obligations at his discretion, though there is no written agreement to continue this support.

We expect UEEC will need to raise additional capital to support ongoing operations, development and regulatory activities. The company’s auditors prepared its financial statements noting that there was substantial doubt as to the company’s ability to continue as a going concern without access to additional capital. In our estimation, access to capital is a key risk for the company and common equity holders, as there is no guarantee that the company will be able to raise enough capital to carry the company to profitability, or that financing will be available on terms palatable to current stockholders. In particular, readers should be aware that new equity capital may result in significant dilution of common shareholders.

Regulation

UEEC operates in the Healthcare industry in the United States. This is a highly regulated industry, and the company must receive FDA clearance to market its products in the United States. UEEC recently filed a 510(k) with the FDA, however, there is no guarantee that this filing will be deemed sufficient for the FDA to make a decision on UEEC products.

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Equity | Healthcare / Wound Care

INITIATION PRIMER (March 21, 2017)

Share Liquidity

UEEC is quoted on the over-the-counter bulletin board. Consequently, UEEC common shares are illiquid and may be difficult to purchase or sell. UEEC shares have traded an average volume per day of 174,000 over the last three months. With a recent price of $0.08, this implies an average daily trading value of just $5,920.

About United Health Products Inc. United Health Products Inc. (UEEC) develops, manufactures, and markets patented hemostatic gauze, for the healthcare and wound care sectors. The product, HemoStyp®, is derived from regenerated oxidized cellulose, which is all natural, and designed to absorb exudate/drainage from superficial wounds and helps control bleeding. UEEC is focused on identifying new markets and applications for its products and increasing sales in its current markets. Unitedhealthproductsinc.com

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Equity | Healthcare / Wound Care

INITIATION PRIMER (March 21, 2017)

Contact

Ajay Tandon SeeThruEquity www.seethruequity.com (646) 495-0939 info@seethruequity.com Disclosure

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