The following discussion and analysis of the results of operations and financial condition of the Company for the quarters ended June 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 ("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.

Six Months Ended June 30, 2021 and 2020

We had sales of $175,469 and $802,584 for the six months ended June 30, 2021 and 2020, respectively, or a 78.1% decrease.

Cost of sales was $132,284 compared to $432,301 for the six months ended June 30, 2021 and 2020, respectively, or a 69.4% 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 margin was $43,185 and $370,283 for the six months ended June 30, 2021 and 2020, respectively, or an 88.3% decrease. This is the result of the disruptions in operations resulting from the pandemic.

General and administrative expenses were $907,340 compared to $928,312 for the six months ended June 30, 2021 and 2020, respectively, or a 2.3% decrease. This decrease is primarily due to the disruptions in the Company's operations from the pandemic.

Stock based compensation was $2,394,514 and $47,023 for the six months ended June 30, 2021 and 2020, respectively, or a 4992.2% increase.

Finance costs were $298,202 compared to $667,980 for the six months ended June 30, 2021 and 2020, respectively, an increase of $369,778. This increase 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 ($3,349,581) compared to ($1,337,567) for the six months ended June 30, 2021 and 2020, respectively.

Three Months Ended June 30, 2021 and 2020

We had sales of $39,096 and $610,536 for the three months ended June 30, 2021 and 2020, respectively, or a 93.6% decrease.

Cost of sales was $35,416 compared to $164,838 for the three months ended June 30, 2021 and 2020, respectively, or a 78.5% 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 margin was $3,680 and $445,698 for the three months ended June 30, 2021 and 2020, respectively, or a 99.2% decrease. This is the result of the disruptions in operations resulting from the pandemic.

General and administrative expenses were $465,373 compared to $576,432 for the three months ended June 30, 2021 and 2020, respectively, or a 19.3% decrease. This decrease is primarily due to the disruptions in the Company's operations from the pandemic.

Stock based compensation was $200,000 and $0 for the three months ended June 30, 2021 and 2020, respectively, or a 100% increase.

Finance costs were $178,274 compared to $152,486 for the three months ended June 30, 2021 and 2020, respectively, an increase of $25,788. 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 ($848,495) compared to ($317,735) for the three months ended June 30, 2021 and 2020, respectively.





4

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 June 30, 2021, the Company had a cash balance of $12,655.

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.

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.

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.

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

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 six months of 2021, the Company's operating activities used cash of $629,456, compared to the first six months of 2020 which used cash of $688,703. For details of the operating cash flows refer to the condensed consolidated statements of cash flows in Part I - Financial Information.





Financing Activities

During the six months ended June 30, 2021, we received proceeds of $193,000 from the sale of common stock and warrants, $243,275 from the second SBA loan and $215,000 from the issuance of debt net of $9,906 for the payment of finance leases.

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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