Nutra Pharma Swings to Q1 Loss Amid Derivative Hit, Sales Up

TL;DR

**Nutra Pharma is a financial black hole, with a massive net loss and a 'going concern' warning that screams 'stay away' to any rational investor.**

AI Summary

NUTRA PHARMA CORP. (Nutra Pharma) reported a net loss of $592,560 for the three months ended March 31, 2023, a significant decline from the net income of $5,013,462 in the same period of 2022. This shift was primarily driven by a negative change in the fair value of convertible notes and derivatives, which swung from a gain of $5,546,361 in Q1 2022 to a loss of $51,871 in Q1 2023. Despite the net loss, total net sales increased substantially to $155,024 in Q1 2023 from $22,198 in Q1 2022, with related party sales contributing $100,502. Gross profit also rose to $103,099 from $7,792 year-over-year. However, operating expenses surged to $501,785 in Q1 2023, up from $316,216 in Q1 2022, largely due to a $105,465 bad debt expense from a related party. The company continues to face significant liquidity challenges, with a working capital deficit of $12,976,943 and a stockholders' deficit of $12,970,012 as of March 31, 2023, and relies heavily on debt and equity funding to sustain operations.

Why It Matters

Nutra Pharma's substantial net loss and persistent working capital deficit of $12,976,943 raise serious red flags for investors, indicating a company struggling with financial viability. The reliance on related party sales, which accounted for $100,502 of the $155,024 total net sales, and a significant bad debt expense from a related party, suggest potential governance issues and revenue quality concerns. For employees, the 'going concern' warning signals job insecurity, while customers might face uncertainty regarding product availability and support. In a competitive biotechnology industry, Nutra Pharma's inability to generate consistent profits and its 'Expert Market' listing severely limit its ability to compete and innovate, making it a high-risk proposition for any stakeholder.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt regarding our ability to continue as a going concern' due to recurring significant losses, an accumulated deficit of $74,144,678, a working capital deficit of $12,976,943, and a stockholders' deficit of $12,970,012 as of March 31, 2023. Furthermore, its common stock is on the OTC Market Group's Expert Market, severely limiting capital raising capabilities.

Analyst Insight

Investors should avoid NUTRA PHARMA CORP. given the explicit 'going concern' warning, significant accumulated deficit, and inability to raise capital effectively. The company's financial instability and reliance on related party transactions present an unacceptably high risk profile.

Financial Highlights

debt To Equity

N/A

revenue

$155,024

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$592,560

eps

N/A

gross Margin

66.5%

cash Position

N/A

revenue Growth

+598.7%

Revenue Breakdown

Key Numbers

• $592,560 — Net Loss (Q1 2023, a swing from $5,013,462 net income in Q1 2022)
• $155,024 — Total Net Sales (Q1 2023, up from $22,198 in Q1 2022)
• $100,502 — Related Party Net Sales (Q1 2023, a significant portion of total sales)
• $105,465 — Bad Debt Expense - Related Party (Q1 2023, contributing to increased operating expenses)
• $12,976,943 — Working Capital Deficit (as of March 31, 2023, indicating severe liquidity issues)
• $74,144,678 — Accumulated Deficit (as of March 31, 2023, highlighting historical losses)
• $12,970,012 — Stockholders' Deficit (as of March 31, 2023, indicating negative equity)
• 7,099,727,214 — Common Stock Shares Outstanding (as of October 16, 2025)

Key Players & Entities

• NUTRA PHARMA CORP. (company) — registrant and holding company
• ReceptoPharm, Inc. (company) — wholly-owned subsidiary conducting drug discovery
• Designer Diagnostics Inc. (company) — inactive wholly-owned subsidiary
• $592,560 (dollar_amount) — net loss for Q1 2023
• $5,013,462 (dollar_amount) — net income for Q1 2022
• $155,024 (dollar_amount) — total net sales for Q1 2023
• $100,502 (dollar_amount) — net sales to a related party for Q1 2023
• $12,976,943 (dollar_amount) — working capital deficit as of March 31, 2023
• $74,144,678 (dollar_amount) — accumulated deficit as of March 31, 2023
• OTC Market Group's Expert Market (regulator) — current trading venue for common stock

FAQ

Risk Factors

• Severe Liquidity and Going Concern Risk [high — financial]: The company has a working capital deficit of $12,976,943 and a stockholders' deficit of $12,970,012 as of March 31, 2023. This, coupled with an accumulated deficit of $74,144,678, indicates significant financial distress and raises substantial doubt about the company's ability to continue as a going concern.
• Dependence on Debt and Equity Financing [high — financial]: Nutra Pharma Corp. relies heavily on debt and equity funding to sustain its operations. This dependence exposes the company to risks associated with market conditions for capital raising, interest rate fluctuations, and potential dilution for existing shareholders.
• Significant Bad Debt Expense from Related Party [medium — operational]: A substantial bad debt expense of $105,465 was recognized in Q1 2023, directly attributed to a related party. This highlights potential issues with creditworthiness or financial stability of related entities and impacts operating profitability.
• Volatility from Convertible Notes and Derivatives [medium — financial]: The company experienced a significant swing from a $5,546,361 gain in Q1 2022 to a $51,871 loss in Q1 2023 related to the fair value of convertible notes and derivatives. This volatility can materially impact net income and financial reporting.
• Intense Competition in Nutraceuticals [medium — market]: The nutraceutical and pharmaceutical industries are highly competitive, requiring continuous innovation, significant marketing investment, and regulatory compliance. Failure to compete effectively could impact sales growth and market share.

Industry Context

Nutra Pharma operates in the highly competitive nutraceutical and pharmaceutical sectors. This industry is characterized by rapid innovation, stringent regulatory oversight (e.g., FDA), and significant marketing expenditures. Success often depends on effective R&D, robust clinical trials, and navigating complex supply chains and distribution channels.

Regulatory Implications

As a pharmaceutical company, Nutra Pharma is subject to extensive regulations from bodies like the FDA concerning product development, manufacturing, marketing, and safety. Non-compliance can lead to significant fines, product recalls, and reputational damage, impacting financial performance and operational continuity.

What Investors Should Do

1. Scrutinize the sustainability of revenue growth, particularly the reliance on related party sales ($100,502 of $155,024 in Q1 2023).
2. Assess the company's ability to manage its severe liquidity crisis, evidenced by a $12.98M working capital deficit and negative stockholders' equity.
3. Evaluate the long-term viability given the substantial accumulated deficit of $74.14M and ongoing operational losses.
4. Monitor the impact of convertible note and derivative fair value fluctuations on net income volatility.
5. Understand the financial health and creditworthiness of related parties contributing significantly to sales and potential bad debt.

Glossary

Working Capital Deficit

Occurs when a company's current liabilities exceed its current assets, indicating a potential short-term inability to meet its obligations. (Nutra Pharma has a significant deficit of $12,976,943 as of March 31, 2023, highlighting severe liquidity challenges.)

Stockholders' Deficit

Represents a negative net worth, where total liabilities exceed total assets, meaning the company has negative equity. (Nutra Pharma's deficit of $12,970,012 as of March 31, 2023, indicates the company is technically insolvent from an equity perspective.)

Accumulated Deficit

The cumulative net losses of a company over its lifetime that have not been offset by net income or other gains. (The company's accumulated deficit of $74,144,678 as of March 31, 2023, shows a history of significant unrecovered losses.)

Fair Value of Convertible Notes and Derivatives

The estimated market price of financial instruments like convertible debt and related options or contracts, which can fluctuate based on market conditions and company performance. (Changes in fair value significantly impacted Nutra Pharma's net income, swinging from a large gain in Q1 2022 to a loss in Q1 2023.)

Bad Debt Expense

An expense recognized when accounts receivable are deemed uncollectible and written off. (A $105,465 bad debt expense from a related party in Q1 2023 significantly increased operating expenses.)

Year-Over-Year Comparison

Compared to Q1 2022, Nutra Pharma Corp. has seen a dramatic shift from net income ($5,013,462) to a net loss (-$592,560) in Q1 2023, primarily due to a negative swing in the fair value of financial instruments. While total net sales have surged by 598.7% to $155,024, gross profit also improved significantly. However, operating expenses have escalated, driven by a notable bad debt expense from a related party, exacerbating the overall financial deterioration despite top-line growth.

Filing Documents

• form10-q.htm (10-Q) — 1666KB
• ex31-1.htm (EX-31.1) — 20KB
• ex32-1.htm (EX-32.1) — 7KB
• 0001493152-25-018328.txt ( ) — 10274KB
• nphc-20230331.xsd (EX-101.SCH) — 67KB
• nphc-20230331_cal.xml (EX-101.CAL) — 70KB
• nphc-20230331_def.xml (EX-101.DEF) — 317KB
• nphc-20230331_lab.xml (EX-101.LAB) — 516KB
• nphc-20230331_pre.xml (EX-101.PRE) — 433KB
• form10-q_htm.xml (XML) — 1679KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION F-1

Financial Statements

Item 1. Financial Statements F-1 Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022 F-1 Condensed Consolidated Statements of Operations for the Three months ended March 31, 2023 and 2022 (Unaudited) F-2 Condensed Consolidated Statements of Changes in Stockholders' Deficit for the Three months ended March 31, 2023 and 2022 (Unaudited) F-3 Condensed Consolidated Statements of Cash Flows for the Three months ended March 31, 2023 and 2022 (Unaudited) F-4 Notes to Condensed Consolidated Financial Statements (Unaudited) F-5

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 4

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 9

Controls and Procedures

Item 4. Controls and Procedures 9

OTHER INFORMATION

PART II. OTHER INFORMATION 10

Legal Proceedings

Item 1. Legal Proceedings 10

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 12

Mine Safety Disclosure

Item 4. Mine Safety Disclosure 12

Other Information

Item 5. Other Information 12

Exhibits

Item 6. Exhibits 12 2 Nutra Pharma Corp ("Nutra Pharma") and its wholly owned subsidiary, ReceptoPharm, Inc. ("ReceptoPharm"), are referred to herein as "we", "our" or "us" (ReceptoPharm is also individually referred to herein). Forward Looking Statements This Quarterly Report on Form 10–Q for the period ending March 31, 2023, contains forward–looking statements that involve risks and uncertainties, as well as assumptions that if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward–looking statements. The words or phrases "would be," "will allow, "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward–looking statements." We are subject to risks detailed in Item 1(a). All statements other than statements of historical fact are statements that could be deemed forward–looking statements, including: (a) any projections of revenue, gross margin, expenses, earnings or losses from operations, synergies or other financial items; and (b) any statements of the plans, strategies and objectives of management for future operations; and (c) any statement concerning developments, plans, or performance. Unless otherwise required by applicable law, we do not undertake and we specifically disclaim any obligation to update any forward–looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements NUTRA PHARMA CORP. Condensed Consolidated Balance Sheets March 31, December 31, 2023 2022 (Unaudited) ASSETS Current assets: Cash $ - $ - Accounts receivable 21,699 21,664 Inventory, current portion 29,147 23,866 Convertible notes receivable, net of discount 219,296 225,396 Prepaid expenses and other current assets 57,649 6

View Full Filing

View this 10-Q filing on SEC EDGAR