NEUROMETRIX : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

Introduction

Our business during the first quarter of 2021 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 our first quarter of 2021 and thereafter, the following has occurred:

On February 12, 2021 we announced that we are focusing on our intellectual
property portfolio and have engaged new IP attorneys at Christopher & Weisberg
P.A.

On February 23, 2021 we provided updates on our work in improving our existing
facilities for manufacturing and validation of our drug products. This included
the renewal of our lease for our current lab space and bringing all of
manufacturing in-house.

On March 11, 2021 we announced that we had engaged AccuReg, Inc. as outside
Regulatory and Quality Assurance consultants as part of our work in improving
our existing facilities for manufacturing and validation of our drug products.

On March 16, 2021 we announced our plans for the marketing and distribution 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.

On April 15, 2021 we announced that our newest product, Luxury Feet, was
available for purchase on Amazon.com.

On May 24, 2021, we announced plans for expanding the marketing of our
over-the-counter pain relievers and anti-inflammatory products by working with
influencers on several social media platforms. These will include celebrities as
well as professional and Olympic athletes that have benefitted from our
products.

On May 27, 2021, we provided updates on increasing our manufacturing
capabilities for the production of our line of over-the-counter pain relievers
and anti-inflammatory drugs. As part of this process, we have completed the
design and purchase for a new liquid filling line that includes automatic
filling, capping, coding, labeling and heat shrinking for most of our products.

The new equipment will allow production of up to 40 bottles per minute, which
greatly increases our manufacturing capacity. The equipment was validated,
certified and in production in August of 2021.

On June 2, 2021, we announced that we had signed an agreement with professional
snowboarder Jake Vedder as a celebrity endorser of Nyloxin for Chronic Pain
relief. Mr. Vedder will provide marketing content, videos and testimonials on
the use of our product and as a social media influencer.

On June 4, 2021, we announced our plans for increasing sales of our
over-the-counter pain relievers through private label agreements that will
rebrand Nyloxin. The first private label distributor contract has been executed
with sales expected to start within the next 4-6 weeks. Their marketing plan
includes direct sales, targeted landing pages and aggressive marketing through
social media.

On June 8, 2021, we announced that Diverse Health Services of Metro-Detroit has
added the Nyloxin line of products to their offerings. Nyloxin is already being
sold in-house at their facilities and will be added shortly to their online
marketplace. Their marketing plan includes direct sales to patients and other
medical facilities, sales through their websites and social media utilizing
their online platforms as well as videos featuring Dr. Randall Tent.

On July 15, 2021, we announced that we had engaged the Washington DC-based
government affairs consulting firm, Vitello Consulting. The firm will work with
elected officials as well as governmental agencies to increase the awareness of
Nutra Pharma’s products and technologies with the goal of improving sales,
garnering grants and potentially speeding drug applications.

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On July 23, 2021, we announced that we filed a new provisional patent to protect
our intellectual property surrounding our development of nerve agent counter
measures.

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 and on www.Amazon.com/nyloxin. 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.

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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, we have waited to complete the approval process to begin distributing
Nyloxin® and expect to re-engage in the process in 2021.

On February 1, 2018 we announced a Distribution Agreement with the Australian
company, Pharmachal PTY LTD to market and distribute Nyloxin® in Australia and
New Zealand. Pharmachal has begun the registration process with the TGA
(Therapeutic Goods Administration). At this time, we do not know if our products
will qualify for TGA registration and cannot provide a timeline for the eventual
distribution in Australia.

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.

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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 has the ability to earn the
exclusive distribution rights for the product by reaching certain sales
milestones. DEG has 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. In March of 2021
we announced plans for the marketing and distribution of Luxury Feet and on
April 15, 2021 we announced that the product was available for purchase on
Amazon. We will continue with the marketing efforts of Luxury Feet throughout
2021 with plans to start social media campaigns and a retail rollout later in
the year.

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.

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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. We expect to begin the trial in FY2021.

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.

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.

We believe that our critical accounting policies and estimates include our
ability to continue as a going concern, revenue recognition, accounts receivable
and allowance for doubtful accounts, inventory obsolescence, accounting for
long-lived assets and accounting for stock based compensation.

Ability to Continue as a Going Concern: 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.

Revenue Recognition: The Company accounts for revenue from contracts with
customers in accordance with Financial Accounting Standard Board (“FASB”)
Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with
Customers (“ASC 606”). Under ASC Topic 606, revenue recognition has a five-step
process: a) Determine whether a contract exists; b) Identify the performance
obligations; c) Determine the transaction price; d) Allocate the transaction
price; and e) Recognize revenue when (or as) performance obligations are
satisfied.

Our revenues are primarily derived from customer orders for the purchase of our
products. We recognize revenues as performance obligations are fulfilled when
control passes to our customers. We record revenues net of promotions and
discounts. For certain product sales to a distributor, we record revenue
including a portion of the cash proceeds that is remitted back to the
distributor.

Accounts Receivable and Allowance for Doubtful Accounts: We grant credit without
collateral to our customers based on our evaluation of a particular customer’s
credit worthiness. Accounts receivable are due 30 days after the issuance of the
invoice. In addition, allowances for doubtful accounts are maintained for
potential credit losses based on the age of the accounts receivable and the
results of periodic credit evaluations of our customers’ financial condition.
Accounts receivable are written off after collection efforts have been deemed to
be unsuccessful. Accounts written off as uncollectible are deducted from the
allowance for doubtful accounts, while subsequent recoveries are netted against
the provision for doubtful accounts expense. We generally do not charge interest
on accounts receivable. We use third party payment processors and are required
to maintain reserve balances, which are included in accounts receivable.

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Our accounts receivable are stated at estimated net realizable value. Accounts
receivable are comprised of balances due from customers net of estimated
allowances for uncollectible accounts. In determining collectability, historical
trends are evaluated and specific customer issues are reviewed to arrive at
appropriate allowances.

Inventory Obsolescence: Inventories are valued at the lower of average cost or
market value. We periodically perform an evaluation of inventory for excess,
impairments and obsolete items. At March 31, 2021, our inventory consisted
entirely of raw materials and finished goods that are utilized in the
manufacturing of finished goods. These raw materials generally have expiration
dates in excess of 10 years. We classify inventory as short-term or long-term
inventory based on timing of when it is expected to be consumed.

Long-Lived Assets: The carrying value of long-lived assets is reviewed annually
and on a regular basis for the existence of facts and circumstances that may
suggest impairment. If indicators of impairment are present, we determine
whether the sum of the estimated undiscounted future cash flows attributable to
the long-lived asset in question is less than its carrying amount. If less, we
measure the amount of the impairment based on the amount that the carrying value
of the impaired asset exceeds the discounted cash flows expected to result from
the use and eventual disposal of the impaired assets.

Derivative Financial Instrument: Management evaluates all of its financial
instruments to determine if such instruments are derivatives or contain features
that qualify as embedded derivatives. For derivative financial instruments that
are accounted for as liabilities, the derivative instrument is initially
recorded at its fair value and is then re-valued at each reporting date, with
changes in the fair value reported as charges or credits to income. For
option-based simple derivative financial instruments, the Company uses the
Black-Scholes option-pricing model to value the derivative instruments at
inception and subsequent valuation dates. The classification of derivative
instruments, including whether such instruments should be recorded as
liabilities or as equity, is re-assessed at the end of each reporting period.
Derivative instrument liabilities are classified in the balance sheet as current
or non-current based on whether or not net-cash settlement of the derivative
instrument could be required within 12 months of the balance sheet date.

We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks.

Convertible Debt: For convertible debt that does not contain an embedded
derivative that requires bifurcation, the conversion feature is evaluated to
determine if the rate of conversion is below market value and should be
categorized as a beneficial conversion feature (“BCF”). A BCF related to debt is
recorded by the Company as a debt discount and with the offset recorded to
equity. The related convertible debt is recorded net of the discount for the
BCF. The discount is amortized as additional interest expense over the term of
the debt with the resulting debt discount being accreted over the term of the
note.

The Fair Value Measurement Option: We have elected the fair value measurement
option for convertible debt with embedded derivatives that require bifurcation,
and record the entire hybrid financing instrument at fair value under the
guidance of ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”). The
Company reports interest expense, including accrued interest, related to this
convertible debt under the fair value option, within the change in fair value of
convertible notes and derivatives in the accompanying consolidated statement of
operations.

Derivative Accounting for Convertible Debt and Options and Warrants: The Company
evaluated the terms and conditions of the convertible debt under the guidance of
ASC 815, Derivatives and Hedging. The conversion terms of some of the
convertible notes are variable based on certain factors, such as the future
price of the Company’s common stock. The number of shares of common stock to be
issued is based on the future price of the Company’s common stock. The number of
shares of common stock issuable upon conversion of the debt is indeterminate.
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 and options and warrants are included in the value
of the derivative liabilities. Pursuant to ASC 815-15, Embedded Derivatives, the
fair values of the convertible debt, options and warrants and shares to be
issued were recorded as derivative liabilities on the issuance date and revalued
at each reporting period.

Share-Based Compensation: We record share-based compensation in accordance with
FASB ASC 718, Stock Compensation. FASB ASC 718 requires that the cost resulting
from all share-based transactions are recorded in the financial statements over
the respective service periods. It establishes fair value as the measurement
objective in accounting for share-based payment arrangements and requires all
entities to apply a fair-value-based measurement in accounting for share-based
payment transactions with employees. FASB ASC 718 also establishes fair value as
the measurement objective for transactions in which an entity acquires goods or
services from non-employees in share-based payment transactions.

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Results of Operations – Comparison of Three Months Periods Ended March 31, 2021
and March 31, 2020

Sales for the three-month period ended March 31, 2021 were $22,023 compared to
$17,116 for the three-month period ended March 31, 2020. The increase in net
sales is primarily attributable to the increase in Pet Pain-Away sales.

Cost of sales for the three-month period ended March 31, 2021 is $5,634 compared
to $5,279 for the three-month period March 31, 2020. 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 March 31, 2021 is $16,389
or 74.42% compared to $11,837 or 69.16% for the three-month period ended March
31, 2020. The increase in our profit margin is primarily due to decrease in the
manufacturing cost.

Selling, general and administrative expenses (“SG&A”) increased $266,151 or
111.62% from $238,441 for the quarter ended March 31, 2020 to $504,592 for the
quarter ended March 31, 2021, generally due to the overall increase in
professional fees. In addition, we incurred bad debt expense of $53,000 from the
receivables from companies owned by the Company’s CEO for the three months ended
March 31, 2021. We had a bad debt recovery from the receivables from companies
owned by the Company’s CEO for $39,500 for the three months ended March 31,
2020.

Interest expense, including related party interest expense, increased $42,691 or
58.01%, from $73,594 for the quarter ended March 31, 2020 to $116,285 for the
quarter ended March 31, 2021. This increase was primarily due to increase in
amortization of loan discounts in the quarter ended March 31, 2021 compared to
the quarter ended March 31, 2020.

We carry a convertible notes receivable obtained during the first quarter of
2021 at fair value. For the three months ended March 31, 2021, the unrealized
gain is $43,899.

We carry certain of our debentures and common stock warrants at fair value. For
the three months ended March 31, 2021 and 2020, the liability related to these
hybrid instruments fluctuated, resulting in a loss of $32,876,870 and a gain of
$2,542,942, respectively.

Loss on settlement of debts increased $396,297 or 1,801.35%, from a loss of
$22,000 for the three months ended March 31, 2020 to a loss of $418,297 for the
three months ended March 31, 2021. This increase was primarily due to increase
in losses on settlement of debt through issuance of shares of common stock.
Stock issued for loan modification increased $30,300 or 39.25% from $77,200 for
the three months ended March 31, 2020 to $107,500 for the three months ended
March 31, 2021.

As a result of the foregoing, our net income/loss decreased by $36,199,300 or
1,658.20%, from income of $2,183,044 for the quarter ended March 31, 2020 to a
loss of $34,016,256 for the quarter ended March 31, 2021.

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 March 31, 2021, we have an
accumulated deficit of $102,649,724 at March 31, 2021. In addition, we have a
significant amount of indebtedness in default, a working capital deficit of
$41,220,790 and a stockholders’ deficit of $42,854,404 at March 31, 2021.

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.

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Historically, we have relied upon loans from our Chief Executive Officer, Rik
Deitsch, to fund our operations. At March 31, 2021, the balance due to our
President and CEO, Rik Deitsch, is $196,643, which is an unsecured demand loan
that bears interest at 4%. Additionally, accrued interest on the demand loan was
$1,956 and is included in the due to officer account.

During the three months ended March 31, 2021, we raised $719,058 through the
issuance of convertible notes. Current operations are being funded through a
combination of product sales, loans from our CEO and convertible 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 $200,000 quarterly to fund our existing
operations and ReceptoPharm’s operations for the next twelve months from the
date of filing. These costs include: (i) compensation for three (3) 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.

We began generating revenues from the sale of Cobroxin® in the fourth quarter of
2009 and from the sale of Nyloxin® during the first quarter of 2011. We began
generating revenues from the sale of Pet Pain-Away™ in the fourth quarter of
2014. 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.

Impact of COVID-19 on our Operations

The ramifications of the outbreak of the novel strain of COVID-19 are filled
with uncertainty and changing quickly. Our operations have continued during the
COVID-19 pandemic and we have not had significant disruption. Beginning in June
2020, the Company experienced a delay in retail rollout as a downstream
implication of the slowing economy. We also closed our Coral Springs office in
effort to save money. During May 2020, we received approval from SBA to fund our
request for a PPP loan for $64,895. We used the proceeds primarily for payroll
costs. We expect forgiveness of this loan under the current terms of requirement
by the SBA. During April and June 2020, we obtained the loan in the amount of
$150,000 from SBA under its Economic Injury Disaster Loan assistance program. We
used the proceeds primarily for rent, payroll, utilities, accounting and legal
expenses.

The Company is operating in a rapidly changing environment so the extent to
which COVID-19 impacts its business, operations and financial results from this
point forward will depend on numerous evolving factors that the Company cannot
accurately predict. Those factors include the following: the duration and scope
of the pandemic; governmental, business and individuals’ actions that have been
and continue to be taken in response to the pandemic; and the distribution of
testing and a vaccine.

Uncertainties and Trends

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

?whether Nyloxin®, Nyloxin® Extra Strength and Pet Pain-Away will be accepted by
retail establishments where they are sold;

?because Nyloxin® is a novel approach to the over-the-counter pain market,
whether it will be accepted by consumers over conventional over-the-counter pain
products;

?whether Nyloxin® Military Strength will be successfully launched and be
accepted in the marketplace;

?whether our international drug applications will be approved and in how many
countries;

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?whether we will be successful in marketing Nyloxin®, Nyloxin® Extra Strength
and Pet Pain-Away in our target markets and create nationwide and international
visibility for our products;

?whether our drug delivery system, i.e. oral spray and gel, will be accepted by
consumers who may prefer a pain pill delivery system;

?whether competitors’ pain products will be found to be more attractive to
consumers;

?whether we successfully develop and commercialize products from our research
and development activities;

?whether we compete effectively in the intensely competitive biotechnology area;

?whether we successfully execute our planned partnering and out-licensing
products or technologies;

?whether the current economic downturn and related credit and financial market
crisis will adversely affect our ability to obtain financing, conduct our
operations and realize opportunities to successfully bring our technologies to
market;

?whether we are subject to litigation and related costs in connection with use
of products;

?whether we will successfully contract with domestic
distributor(s)/advertiser(s) for our products and whether that will cause
interruptions in our operations;

?whether we comply with FDA and other extensive legal/regulatory requirements
affecting the healthcare industry.

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 other than
those disclosed in this report 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.

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