The following discussion and analysis of the results of operations and financial condition of the Company for the quarters ended September 30, 2021 and 2020, should be read in conjunction with the other sections of this Quarterly Report, including the Financial Statements and notes thereto of the Company included in this Quarterly Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Quarterly Report as well as other matters over which we have no control. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results may differ materially. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.





Overview

Nutralife BioSciences F/K/A NutraFuels, Inc, a Florida corporation (the "Company," "us", "we" or "our") was formed as a limited liability company in the state of Florida on April 1, 2010, to engage in the development and distribution of nutritional and dietary oral spray products. On December 3, 2012, we converted from a Limited Liability Company to a Florida Corporation.

We manufacture and distribute oral spray nutritional and dietary products. Our distribution strategy includes selling to private label customers retailers, distributors, and consumers through retail outlets.

Three Months Ended September 30, 2021 and 2020

We had sales of $70,655 and $153,766 for the three months ended September 30, 2021 and 2020, respectively, or a 54.1% decrease.

Cost of sales was $43,568 compared to $162,030 for the three months ended September 30, 2021 and 2020, respectively, or a 73.1% decrease. This decrease is directly related to the decrease in sales and production volume resulting from the shutdowns and business disruptions from the pandemic. The Company also significantly increased its production labor force.

Gross profit (loss) was $27,087 and ($8,264) for the three months ended September 30, 2021 and 2020, respectively, or a 427.8% decrease. This is the result of the disruptions in operations resulting from the pandemic.

General and administrative expenses were $413,304 compared to $398,944 for the three months ended September 30, 2021 and 2020, respectively, or a 3.6% increase.

Stock based compensation was $120,000 and $0 for the three months ended September 30, 2021 and 2020, respectively, or a 100% increase.

Finance costs were $179,795 compared to $132,419 for the three months ended September 30, 2021 and 2020, respectively, an increase of $47,376. This increase is the result of the recognizing the expense related to the discount on convertible debt and beneficial conversion features.

We incurred a net loss of ($688,257) compared to ($571,931) for the three months ended September 30, 2021 and 2020, respectively.





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Nine Months Ended September 30, 2021 and 2020

We had sales of $246,124 and $956,350 for the nine months ended September 30, 2021 and 2020, respectively, or a 74.3% decrease.

Cost of sales was $175,852 compared to $594,331 for the nine months ended September 30, 2021 and 2020, respectively, or a 54.3% decrease. This decrease is directly related to the decrease in sales and production volume resulting from the shutdowns and business disruptions from the pandemic. The Company also significantly increased its production labor force.

Gross profit was $70,272 and $362,019 for the nine months ended September 30, 2021 and 2020, respectively, or a 80.6% decrease. This is the result of the disruptions in operations resulting from the pandemic.

General and administrative expenses were $1,320,644 compared to $1,327,256 for the nine months ended September 30, 2021 and 2020, respectively, or a 0.5% decrease.

Stock based compensation was $2,514,514 and $47,023 for the nine months ended September 30, 2021 and 2020, respectively, or an 5,247.5% increase.

Finance costs were $477,997 compared to $800,399 for the nine months ended September 30, 2021 and 2020, respectively, an decrease of $322,402. This decrease is the result of the recognizing the expenses related to the discount on convertible debt and beneficial conversion features.

We incurred a net loss of ($4,037,838) compared to ($1,909,498) for the nine months ended September 30, 2021 and 2020, respectively.

Liquidity and Capital Resources

Historically, the Company's primary cash needs have been related to working capital items, which the Company has largely funded through our revenues, working capital, cash on hand, and proceeds from the issuance of stock.





Cash Flow Activities

As of September 30, 2021, the Company had a cash balance of $130,502.

In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in China, and began to spread around the world in early 2020. In reaction to decreased supply of and increased demand for sanitizer products, the Company shifted its manufacturing to produce sanitizer products. The Company's other business operations have been impacted negatively by COVID-19 due to government restrictions and the overall adverse effect on the global economy. The Company expects COVID-19 to continue to negatively impact its operating results and its ability to obtain financing.

Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management's potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.

The Company is currently in the process of raising capital to complete and finalize the build-out of its facility in Deerfield Beach for the purpose of consolidating its operations. The structure of the capital raise is currently in development. The Company is continuing its path to profitability through increased business development, marketing and sales of the Company's multiple lines of topical, ingestible and skincare health and wellness products. The Company is also focused on completing an efficacy clinical study on its patented mosquito bug patch with plans upon a successful conclusion to launch globally in the very near future, adding to the Company's suite of wellness products.





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We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.





Operating Activities

Our cash increased $129,760 for the nine months ended September 30, 2021. Cash used in operating activities is net loss adjusted for certain non-cash items and changes in certain assets and liabilities, such as those included in working capital.

For the first nine months of 2021, the Company's operating activities used cash of $959,286, compared to the first nine months of 2020 which used cash of $900,513. For details of the operating cash flows refer to the condensed consolidated statements of cash flows in Part I - Financial Information.





Investing Activities

Cash used in investing activities during the first nine months of 2021 and 2020 was $0 and $0, respectively.





Financing Activities

During the nine months ended September 30, 2021, we received proceeds of $348,000 from the sale of common stock, $512,500 from promissory notes with shareholders, and an aggregate of $243,275 from SBA financing, under the Paycheck Protection Program and CARES act.

Critical Accounting Policies and Estimates

For detailed information regarding our critical accounting policies and estimates, see our financial statements and notes thereto included in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2020. There have been no material changes to our critical accounting policies and estimates from those disclosed in our most recent Annual Report on Form 10-K.

Recent Accounting Pronouncements

(See "Recently Issued Accounting Pronouncements" in Note 2 of Notes to the Condensed Consolidated Financial Statements.)

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