Quarterly Report for Quarter Ending June 30, 2023 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Our business during the six months ended June 30, 2023 has focused upon marketing our homeopathic drugs for the treatment of pain:

	●	Nyloxin (Stage 2 Pain)
	●	Nyloxin Extra Strength (Stage 3 Pain)
	●	Pet Pain-Away
	●	Equine Pain-Away
	●	Luxury Feet

During the six months ended June 30, 2023 and thereafter, the following has occurred:

On March 22, 2024, we announced that we had reached a settlement in the civil lawsuit brought by the SEC.

Nyloxin/Nyloxin Extra Strength

We offer Nyloxin/Nyloxin Extra Strength as our over-the-counter (OTC) pain reliever that has been clinically proven to treat moderate to severe (Stage 2) chronic pain.

Nyloxin and Nyloxin Extra Strength are available as a two-ounce topical gel for treating joint pain and pain associated with arthritis and repetitive stress, and as a one ounce oral spray for treating lower back pain, migraines, neck aches, shoulder pain, cramps, and neuropathic pain. Both the topical gel and oral spray are packaged and sold as a one-month supply.

Nyloxin and Nyloxin Extra Strength offer several benefits as a pain reliever. With increasing concern about consumers using opioid and acetaminophen-based pain relievers, the Nyloxin products provide an alternative that does not rely on opiates or non-steroidal anti-inflammatory drugs, otherwise known as NSAIDs, for their pain-relieving effects. Nyloxin also has a well-defined safety profile. Since the early 1930s, the active pharmaceutical ingredient (API) of Nyloxin, Asian cobra venom, has been studied in more than 46 human clinical studies. The data from these studies provide clinical evidence that cobra venom provides an effective treatment for pain with few side effects and has the following benefits:

	●	safe and effective;
	●	all natural;
	●	long-acting;
	●	easy to use;
	●	non-narcotic;
	●	non-addictive; and
	●	analgesic and anti-inflammatory.

Potential side effects from the use of Nyloxin are rare, but may include headache, nausea, vomiting, sore throat, allergic rhinitis and coughing.

The primary difference between Nyloxin and Nyloxin Extra Strength is the dilution level of the venom. The approximate dilution levels for Nyloxin and Nyloxin Extra Strength are as follows:

Nyloxin

	●	Topical Gel: 30 mcg/mL
	●	Oral Spray: 70 mcg/mL

Nyloxin Extra Strength

	●	Topical Gel: 60 mcg/mL
	●	Oral Spray: 140 mcg/mL

In December 2011, we began marketing Nyloxin and Nyloxin Extra Strength at www.nyloxin.com. Both Nyloxin and Nyloxin Extra Strength are packaged in a roll-on container, squeeze bottle and as an oral spray. Additionally, Nyloxin topical gel is available in an 8 ounce pump bottle.

We are currently marketing Nyloxin and Nyloxin Extra Strength as treatments for moderate to severe chronic pain. Nyloxin is available as an oral spray for treating back pain, neck pain, headaches, joint pain, migraines, and neuralgia and as a topical gel for treating joint pain, neck pain, arthritis pain, and pain associated with repetitive stress. Nyloxin Extra Strength is available as an oral spray and gel application for treating the same physical indications but is aimed at treating the most severe (Stage 3) pain that inhibits one's ability to function fully.

The Nyloxin products are available for sale on the www.Nyloxin.com website, the Nyloxin Amazon storefront at www.Amazon.com/nyloxin and on the Walmart Marketplace. Nyloxin is also sold in physician offices, clinics and small-chain pharmacies.

Nyloxin Military Strength

In December 2012, we announced the availability of Nyloxin Military Strength for sale to the United States Military and Veteran's Administration. Over the past few years, the U.S. Department of Defense has been reporting an increase in the use and abuse of prescription medications, particularly opiates. In 2009, close to 3.8 million prescriptions for pain relievers were written in the military. This staggering number was more than a 400% increase from the number of prescriptions written in the military in 2001. But prescription drugs are not the only issue. The most common and seemingly harmless way to treat pain is with non-steroidal, anti-inflammatory drugs (NSAIDS). But there are risks. Overuse can cause nausea, vomiting, diarrhea, heartburn, ulcers and internal bleeding. In severe cases chest pain, heart failure, kidney dysfunction and life-threatening allergic reactions can occur. It is reported that approximately 7,600 people in America die from NSAID use and some 78,000 are hospitalized. Ibuprofen, also an NSAID has been of particular concern in the military. The terms "Ranger Candy" and "Military Candy" refer to the service men and women who are said to use 800mg doses of Ibuprofen to control their pain. But when taking anti-inflammatory Ibuprofen in high doses for chronic pain, there is potential for critical health risks; abuse can lead to serious stomach problems, internal bleeding and even kidney failure. There are significantly greater health risks when abuse of this drug is combined with alcohol intake. Our goal is that with Nyloxin, we can greatly reduce the instances of opiate abuse and overuse of NSAIDS in high risk groups like the US military. The Nyloxin Military Strength represents the strongest version of Nyloxin available and is approximately twice as strong as Nyloxin Extra Strength. We are working with outside consultants to register Nyloxin Military Strength and the other Nyloxin products for sale to the US government and the various arms of the military as well as the Veteran's Administration. In February of 2018, Nyloxin was added to the Federal Supply Schedule but was subsequently removed the following week without an adequate explanation. We have continued to work with our consultants to understand why our products were improperly removed the Federal Supply Schedule and when we may be able to get re-listed on the Federal Supply Schedule for eventual sales to governmental agencies or to the US Military.

International Sales

We are pursuing international drug registrations in Canada, Mexico, India, Australia, New Zealand, Central and South America and Europe. Since European rules for homeopathic drugs are different than the rules in the US, we cannot estimate when this process will be completed. On March 25, 2013 we announced the publication of our patent and trademark for Nyloxin in India. We are actively seeking new distribution partners in India.

On May 14, 2015 we announced that we had engaged the Nature's Clinic to begin the process of regulatory approval of our Company's Over-the-Counter pain drug, Nyloxin for marketing and distribution in Canada. The Nature's Clinic has already begun setting up their Chatham, Ontario warehouse. Due to lack of funding and then the subsequent COVID crisis, we have waited to complete the approval process to begin distributing Nyloxin and expect to re-engage in the process in 2026.

Additionally, we plan to complete several human clinical studies aimed at comparing the ability of Nyloxin Extra Strength to replace prescription pain relievers. We have provided protocols to several hospitals and will provide details and timelines when those protocols have been accepted. We cannot provide any timeline for these studies until adequate financing is available.

To date, our marketing efforts have been limited due to lack of funding. As sales increase, we plan to begin marketing more aggressively to increase the sales and awareness of our products.

Pet Pain-Away

During June of 2013, we announced the launch of our new homeopathic formula for the treatment of chronic pain in companion animals, Pet Pain-Away. Pet Pain-Away is a homeopathic, non-narcotic, non-addictive, over-the-counter pain reliever, primarily aimed at treating moderate to severe chronic pain in companion animals. It is specifically indicated to treat pain from hip dysplasia, arthritis pain, joint pain, and general chronic pain in dogs and cats. The initial product run was completed in December of 2014 and launched through Lumaxa Distributors on December 19, 2014.

In May of 2016, we signed a license agreement to begin the process of creating an infomercial (Direct Response) campaign for Pet Pain-Away. In November of 2016, we announced the license agreement with DEG Productions for the marketing and distribution of Pet Pain-Away globally. DEG created their own website (www.getpetpainaway.com) and began airing commercials in December of 2016.

In February of 2020, we took back the marketing of Pet Pain-Away and are currently selling the product on Amazon.com and through www.petpainaway.com

Luxury Feet

In June of 2017, we announced the creation of Luxury Feet; an over-the-counter pain reliever and anti-inflammatory product that is designed for women who experience pain or discomfort due to high heels and stilettos. We announced the official marketing launch of Luxury Feet in March of 2021. The product is currently available through www.luxuryfeet.com and on Amazon.

Equine Pain-Away (Formerly Equine Nyloxin)

In October of 2013, we announced that we were in the process of launching the newest addition to our line of homeopathic treatments for chronic pain, Equine Nyloxin. We had been working with trainers and veterinarians in the equine industry and have already identified distributors for the product. The Equine Nyloxin represents the Company's first topical solution for the animal market. Equine Nyloxin was rebranded as Equine Pain-Away™ and officially rolled into the market in October of 2019. Equine Pain-Away is being marketed through several retailers and online at www.EquinePainAway.com and on Amazon.

Drug Discovery and Pipeline

Nutra Pharma is developing proprietary therapeutic protein products for the biologics market. The Company has two leading drug candidates: RPI-MN and RPI-78M.

RPI-MN

RPI-MN inhibits the entry of several viruses that are known to cause severe neurological damage in such diseases as encephalitis and Human Immunodeficiency Virus (HIV). It is being developed first for the treatment of HIV.

RPI-78M

RPI-78M is being developed for the treatment of Multiple Sclerosis (MS) and Adrenomyeloneuropathy (AMN). Other neurological and autoimmune disorders that may be served by RPI-78M include Myasthenia Gravis (MG), Rheumatoid Arthritis (RA) and Amyotrophic Lateral Sclerosis (ALS).

RPI-78M and RPI-MN contain anticholinergic peptides that recognize the same receptors as nicotine (acetylcholine receptors) but have the opposite effect. In a specific chemical process unique to Nutra Pharma, the drugs are created through a process of chemical modification.

In September, 2015 RPI-78M was granted Orphan Status by the FDA for the treatment of pediatric Multiple Sclerosis. This allows for much shorter timelines to drug approval, waiver of FDA fees (around $2.5M), rolling review and fast-track approval. Orphan status also allows for potential grant money and other funding opportunities through the clinical process.

RPI-MN and RPI-78M possess several desirable properties as drugs:

● They lack measurable toxicity but are still capable of attaching to and affecting the target site on the nerve cells. This means that patients cannot overdose.

● They display no serious adverse side effects following years of investigations in humans and animals.

● They are extremely stable and resistant to heat, which gives the drugs a long shelf life. The drugs' stability has been determined to be over 4 years at room temperature. This is extremely unusual for a biologic drug.

● RPI-78M may be administered orally -- a first for a biologic MS drug. This will present MS patients with additional quality of life benefits by eliminating the requirement for routine injections.

● They are easy to administer.

We are currently working with consultants to develop trial protocols for a Phase I/II trial for the use of RPI-78M in the treatment of Pediatric Multiple Sclerosis. Our goal is to initiate these trials in 2026.

Critical Accounting Policies and Estimates

Our condensed consolidated unaudited financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") applied on a consistent basis. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K filed with the SEC on September 3, 2025. We evaluated the applicability of ASU 2016-03, Intangibles - Goodwill and Other (Topic 350): Simplifying the Transition to the Equity Method of Accounting, which became effective for us in 2023, and determined that it did not impact our financial statements. Accordingly, there were no material changes to our accounting policies during the six months ended June 30, 2023.

We regularly evaluate the accounting policies and estimates that we use to prepare our condensed consolidated financial statements. In general, management's estimates are based on historical experience, information from third party professionals, and various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management under different and/or future circumstances.

Results of Operations - Comparison of Three Months Periods Ended June 30, 2023 and 2022

Net sales to unrelated customers were $52,398 for the three months ended June 30, 2023, compared to $28,431 for the same period in 2022-an increase of $23,967, or approximately 84.3%. The increase primarily reflects higher sales of Nyloxin and Pet Pain-Away.

Net sales to a related party were $112,489 for the three months ended June 30, 2023, compared to $61,947 for the same period in 2022-an increase of $50,542, or approximately 81.59%. The increase primarily reflects stronger demand for existing products. The prior-year quarter included only initial sales following the products launch in March 2022, before full market adoption.

Cost of sales for the three-month period ended June 30, 2023 is $80,252 compared to $60,797 for the three-month period June 30, 2022. Our cost of sales includes the direct costs associated with manufacturing, shipping and handling costs. Our gross profit margin for the three-month period ended June 30, 2023 is $84,635 or 51.33% compared to $29,581 or 32.73% for the three-month period ended June 30, 2022. The margin improvement primarily reflects lower manufacturing costs associated with sales to a related party.

Selling, general and administrative expenses decreased $81,929 or 23.48% from $348,868 for the quarter ended June 30, 2022 to $266,939 for the quarter ended June 30, 2023, generally due to the overall decrease in professional fees as business activity slowed and operations were limited in response to the unresolved lawsuit. In addition, we had a bad debt expense from the receivables from companies controlled by the Company's CEO for $0 and $21,799 for the three months ended June 30, 2023 and 2022, respectively.

Other income was $31,894 and $5,500 for the three months ended June 30, 2023 and 2022, respectively. The amounts primarily relate to services rendered in exchange for a convertible note receivable and the amortization of debt discounts on convertible notes receivable, which were fully settled during the second quarter of 2023.

Interest expense, including related party interest expense, decreased $109,176 or 54.67%, from $199,698 for the quarter ended June 30, 2022 to $90,522 for the quarter ended June 30, 2023. This decrease was primarily due to the decrease in amortization of loan discounts in the quarter ended June 30, 2023 compared to the quarter ended June 30, 2022.

We carry certain of our debentures and common stock warrants at fair value. Due to the fact that the number of shares of common stock issuable could exceed the Company's authorized share limit, the equity environment is tainted, and all additional convertible debt, options and warrants are included in the value of the derivative liabilities. For the three months ended June 30, 2023 and 2022, the liability related to these hybrid instruments fluctuated, resulting in a loss of $38,314 and a gain of $3,484, respectively. Interest expense on these debentures is included in the fair value loss in the accompanying unaudited condensed consolidated statements of operations.

Loss on settlement of debts decreased $114,000 or 100%, from a loss of $114,000 for the three months ended June 30, 2022 to a loss of $0 for the three months ended June 30, 2023. This decrease in loss was primarily due to no debts being settled in the three months ended June 30, 2023 compared to the same period in 2022.

As a result of the foregoing, our net loss decreased by $366,554 or 56.76%, from a loss of $645,800 for the quarter ended June 30, 2022 to a loss of $279,246 for the quarter ended June 30, 2023.

Results of Operations - Comparison of Six Months Periods Ended June 30, 2023 and June 30, 2022

Net sales to unrelated customers were $106,920 for the six months ended June 30, 2023, compared to $42,190 for the same period in 2022-an increase of $64,730, or approximately 153.42%. The increase primarily reflects higher sales of Nyloxin and Pet Pain-Away.

Net sales to a related party were $212,991 for the six months ended June 30, 2023, compared to $70,386 for the same period in 2022-an increase of $142,605, or approximately 202.6%. The increase primarily reflects stronger demand for existing products. The prior-year same period included only initial sales following the products launch in March 2022, before full market adoption.

Cost of sales for the six-month period ended June 30, 2023 is $132,177 compared to $75,203 for the six-month period June 30, 2022. Our cost of sales includes the direct costs associated with manufacturing, shipping and handling costs. Our gross profit margin for the six-month period ended June 30, 2023 is $187,734 or 58.68% compared to $37,373 or 33.2% for the six-month period ended June 30, 2022. The margin improvement primarily reflects lower manufacturing costs associated with sales to a related party.

Selling, general and administrative expenses decreased $1,825 or 0.27% from $665,084 for the six months ended June 30, 2022 to $663,259 for the six months ended June 30, 2023. This is due to higher professional fees, particularly legal fees, incurred in the first quarter of 2023, which were offset by lower expenses in the second quarter of 2023 as business activity slowed and operations were limited in response to the unresolved lawsuit. In addition, we incurred bad debt expense of $105,465 and $21,799 from the receivables from companies controlled by the Company's CEO for the six months ended June 30, 2023 and 2022.

Other income was $32,794 and $12,005 for the six months ended June 30, 2023 and 2022, respectively. The amounts primarily relate to services rendered in exchange for a convertible note receivable and the amortization of debt discounts on convertible notes receivable, which were fully settled during the second quarter of 2023.

Interest expense, including related party interest expense, decreased $160,044 or 40.71%, from $393,119 for the six months ended June 30, 2022 to $233,075 for the six months ended June 30, 2023. This decrease was primarily due to decrease in amortization of loan discounts in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

We carry certain of our debentures and common stock warrants at fair value. Due to the fact that the number of shares of common stock issuable could exceed the Company's authorized share limit, the equity environment is tainted, and all additional convertible debt, options and warrants are included in the value of the derivative liabilities. For the six months ended June 30, 2023 and 2022, the liability related to these hybrid instruments fluctuated, resulting in a loss of $90,185 and a gain of $5,549,845, respectively. Interest expense on these debentures is included in the fair value loss in the accompanying unaudited condensed consolidated statements of operations.

Loss on settlement of debts decreased $151,209 or 100.25%, from a loss of $151,559 for the six months ended June 30, 2022 to a loss of $350 for the six months ended June 30, 2023. This decrease in loss was primarily due to fewer debts being settled in the six months ended June 30, 2023 compared to the same period in 2022.

As a result of the foregoing, our net income decreased by $5,239,468 or 119.96%, from an income of $4,367,662 for the six months ended June 30, 2022 to a loss of $871,806 for the six months ended June 30, 2023.

Liquidity and Capital Resources

We have incurred significant losses from operations and working capital and stockholders' deficits raise substantial doubt about our ability to continue as a going concern. Further, as stated in Note 1 to our condensed consolidated unaudited financial statements for the period ended June 30, 2023, we have an accumulated deficit of $74,423,924 at June 30, 2023. In addition, we have a significant amount of indebtedness in default, a working capital deficit of $13,276,462 and a stockholders' deficit of $13,249,258 at June 30, 2023.

Our ability to continue as a going concern is contingent upon our ability to secure additional financing, increase ownership equity, and attain profitable operations. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in established markets and the competitive environment in which we operate. As of the date of the filing of this report, we do not believe that our source of cash is adequate for the next 12 months of operation and there is substantial doubt about our ability to continue as a going concern. In addition, our common stock is presently on the OTC Market Group's Expert Market, which means that the Company's common stock is not eligible for proprietary broker-deal quotes.

Current operations are primarily being funded through a combination of product sales and convertible notes. During the six months ended June 30, 2023, we raised $25,000 through the issuance of convertible notes and $116,200 through the issuance of promissory notes.

We expect to utilize the proceeds from these funds and additional capital to manufacture Nyloxin and Pet Pain-Away and reduce our debt level. We estimate that we will require approximately $600,000 to fund our existing operations over the next twelve months. These costs include: (i) compensation for six (6) full-time employees; (ii) compensation for various consultants who we deem critical to our business; (iii) general office expenses including rent and utilities; (iv) product liability insurance; and (v) outside legal and accounting services. These costs reflected in (i) - (v) do not include research and development costs or other costs associated with clinical studies.

Our ability to meet our future operating expenses is highly dependent on the amount of such future revenues. To the extent that future revenues from the sales of Nyloxin and Pet Pain-Away are insufficient to cover our operating expenses we may need to raise additional equity capital, which could result in substantial dilution to existing shareholders. There can be no assurance that we will be able to raise sufficient equity capital to fund our working capital requirements on terms acceptable to us, or at all. We may also seek additional loans from our officers and directors; however, there can be no assurance that we will be successful in securing such additional loans.

The accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Impact of COVID-19 on our Operations

The COVID-19 pandemic did not have a material impact on the Company's business, operations, or financial results for the periods presented. While the pandemic created significant global disruption in prior years, the Company's operations have returned to normal, and management does not currently expect COVID-19 to have a material adverse effect on future results. However, the Company will continue to monitor any public health developments and related economic conditions that could affect its business.

Uncertainties and Trends

Our operations and possible revenues are dependent now and in the future upon the following factors:

	●	Whether we successfully develop and commercialize products from our research and development activities.
	●	If we fail to compete effectively in the intensely competitive biotechnology area, our operations and market position will be negatively impacted.
	●	If we fail to successfully execute our planned partnering and out-licensing of products or technologies, our future performance will be adversely affected.
	●	The recent economic downturn and related credit and financial market crisis may adversely affect our ability to obtain financing, conduct our operations and realize opportunities to successfully bring our technologies to market.
	●	Biotechnology industry related litigation is substantial and may continue to rise, leading to greater costs and unpredictable litigation.
	●	If we fail to comply with extensive legal/regulatory requirements affecting the healthcare industry, we will face increased costs, and possibly penalties and business losses.

Off-Balance Sheet Arrangements

We have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under whom we have:

	●	An obligation under a guarantee contract.
	●	A retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets.
	●	Any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument.
	●	Any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by us and material to us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us.

We do not have any off-balance sheet arrangements or commitments that have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material, other than those which may be disclosed in this Management's Discussion and Analysis of Financial Condition and the audited Consolidated Financial Statements and related notes.