The following discussion and analysis of the results of operations and financial
condition of the Company for the quarters ended March 31, 2022 and 2021, 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 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, 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.
Three Months Ended March 31, 2022 and 2021
We had sales of $80,478 and $136,373 for the three months ended March 31, 2022
and 2021, respectively, or 41% decrease from the first quarter of 2021. This
decrease is directly related to the decrease in sales and production volume
resulting from the shutdowns and business disruptions due to the pandemic and
overall industry changes as a result.
Cost of sales was $123,125 compared to $96,868 for the three months ended March
31, 2022 and 2021, respectively, or 27% increase. This decrease is directly
related to the decrease in sales and production volume resulting from the
shutdowns and business disruptions from the pandemic.
Gross profit (loss) was ($42,647) and $39,505 for the three months ended March
31, 2022 and 2021, respectively, or 208% decrease. This is the result of the
disruptions in operations resulting from the pandemic and its residual effects.
The Company is currently ramping up production and has incurred direct costs
that currently exceed sales.
General and administrative expenses were $379,074 compared to $437,555 for the
three months ended March 31, 2022 and 2021, respectively, a decrease of 13%.
This decrease is primarily due to the disruptions in the Company's operations
from the pandemic.
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Stock based compensation was $215,540 and $2,194,514 for the three months ended
March 31, 2022 and 2021, respectively, a decrease of $1,978,974.
Our finance costs were $355,383 compared to $119,928 for the three months ended
March 31, 2022 and 2021, respectively, an increase of $235,455.
We incurred a net loss of ($1,084,213) compared to ($2,501,086) for the three
months ended March 31, 2022 and 2021, 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, proceeds from lending and proceeds from the
issuance of stock.
As of March 31, 2022, the Company had a cash balance of $58,256. 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.
Cash Flow Activities
As of March 31, 2022, the Company had a cash balance of $58,256.
Operating Activities
Cash used in operating activities is net income adjusted for certain non-cash
items and changes in certain assets and liabilities, such as those included in
working capital.
For the first three months of 2022, the Company's operating activities used cash
of $453,190, compared to the first quarter of 2021 which used cash of $356,008.
For details of the operating cash flows refer to the condensed consolidated
statements of cash flows in Part I - Financial Information.
Investing Activities
During the three months ended March 31, 2022, the Company's investing activities
included the acquisition of a license for $500,000 and an investment of $225,000
for an aggregate of $725,000.
Financing Activities
During the three months ended March 31, 2022, we received proceeds of $975,000
for revenue share agreements, $65,000 from the issuance of debt net of $44,500
for the repayment of debt and $4,823 for the payment of finance leases.
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Critical Accounting Policies and Estimates
Our financial statements have been prepared in accordance with U.S. GAAP. The
preparation of our financial statements requires us to make estimates and
assumptions that affect the amounts and disclosures in the financial statements.
Our estimates are based on our historical experience, knowledge of current
events and actions we may undertake in the future, and on various other factors
that we believe are reasonable under the circumstances. Our critical accounting
policies and estimates are described in "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Critical Accounting Policies" in
our Annual Report on Form 10-K filed with the SEC on April 11, 2022. There were
no material changes to our accounting policies during the three months ended
March 31, 2022.
Recent Accounting Pronouncements
(See "Recently Issued Accounting Pronouncements" in Note 2 of Notes to the
Condensed Consolidated Financial Statements.)
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