BDPT Bioadaptives Inc (PK)

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

FORWARD LOOKING STATEMENTS

This current report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, “Company” and “BioAdaptives” mean BioAdaptives Inc., unless otherwise indicated.

1.  OUR BUSINESS

Overview

BioAdaptives’ core business is to investigate, market and distribute natural plant, algal and mushroom-based products and medical devices that improve health and wellness for humans and animals, with an emphasis on pain relief, anti-viral function, and anti-aging properties.

Effective November 15, 2021, the Company entered into a marketing agreement for an FDA-cleared Class II medical device, the Lung Flute™.. The Company is also exploring agreements with other medical device manufacturers; the owners of intellectual property relating to medical devices and processes; and marketing companies associated with these manufacturers and owners.

The Company’s current products include dietary supplements using natural ingredients and proprietary methods of optimizing the availability of nutrients in foods and beverages. Human products are designed to aid memory, cognition and focus; assist in sleep and fatigue reduction; provide pain relief and healing; and improve overall emotional and physical wellness.  The science behind our human products has proven to be effective for performance enhancement and pain relief for horses and dogs as well as providing improvements in appearance.

Our current product line for humans includes PluriPain®, PrimiLungs™, SleepEZ™(formerly PrimiSleep) and MindnMemory™, which is an improvement on the discontinued PrimiLive® product. The Company has recently launched Cell Rejuven™, an anti-aging cell rejuvenation formulation. We also market the Lung Flute™ and PrimiLungs™ product in our Lung Armor™ packaging, emphasizing the anti-viral properties of the nutraceutical and general respiratory health benefits from use of the non-invasive FDA-cleared device.  MindNMemory™ is a nootropic formulation designed to enhance mental clarity and memory; SleepEZ™ is a natural soporific that aids relaxation and sleep quality.  We acquired the SleepEZ™ license in 2021 as PrimiSleep™, and the revised formulation for MindnMemory™ during 2022, and have commenced marketing activities for these products.  Sales of the LungFlute™ have not met our expectations and we anticipate concentrating in marketing this device through wholesale channel instead.

Our animal products include an Equine All-in-One™ formulation, which we market to trainers, horse owners and boarding stables, and a Canine All-in-One™ that we market directly to consumers.  Anecdotal and testimonial reports are that the equine products provide significant relief from exercise induced pulmonary hemorrhaging, as well as improved coat and mane appearance and hoof health.  The canine products have demonstrated significant rejuvenating benefits for older dogs, improving overall appearance and energy levels.

Effective February 2, 2022, the Company acquired the option to purchase U.S. Patent No. 9,783,432B (the “Patent”), covering technology used in enhancing the capability of water to hold significantly larger amounts of oxygen.  Since June 6, 2022, we entered into a services agreement with Wildpack Beverages in Las Vegas, Nevada to co-pack a pilot run (1333 cases) of this Product.  However, since technical problems prevented completion of the planned pilot run, we are still working with Wildpack to rectify these issues. 

While we continue to investigate and acquire nutraceutical products for humans and animals, all of our current activities are reliant on marketing and distributing products developed and owned by others. Currently, we do not own the formulations for our key products and manufacture and market them under an agreement with the developer that requires payment of a royalty and license agreement. We are negotiating towards acquiring some of these formulations.

We are reliant on direct web sales of the nutraceutical lines for humans and the All-in-One animal products for revenues, none of which has produced any significant revenue yet.  Because of this, we are now exploring the wholesale and affiliate markets for their sales. We have very limited experience in marketing and have yet to develop reliable sales expectations and forecasting.

Market and Marketing

We market our science-based, quality nutraceuticals to a broad base of the population in the U.S., and are exploring marketing prospects in Asia, Australasia, the Middle East, and Europe. The Company’s current target markets also include equine and canine companion animals and equine competitors in the U.S., Australasia and the Middle East.

During June 2021, we commenced use of social media professionals and existing connections to create awareness about our human products’ benefits.  The initial results were not satisfactory and a recast, animal product-specific program that followed later in 2021, did not achieve the desired results.  We are developing affiliate marketing opportunities and recognize that a broader campaign using traditional advertising along with social media and more contemporary marketing tools is necessary.  We started to re-launch our internet-based marketing activities in Q3 2022, commencing with a series of individual product websites, and are exploring wholesale, white-label and strong affiliate marketing opportunities.

We are pursuing scientific surveys and other testing to demonstrate the usefulness of our products.  While we do not anticipate developing testing protocols suitable for FDA approvals, we expect anecdotal and testimonial reports that will be useful in our marketing efforts.  The Company participated in a survey involving the use of PluriPain® by patients suffering from Gadolinium Deposition Disease (“GDD”), and a combination of products for COVID Long Hauler patients.   In the GDD survey, 60% of a small subject sample reported significant relief.  The COVID Long Hauler survey has limited participation to date and no reported results.  We expect to continue these explorations in the 4Q 2022.

Although we believe our newly formulated MindNMemory™ product is a substantial improvement over PrimiLive™, our other products have not substantially changed:  We offer premium nutraceutical preparations containing the best quality all-natural botanical, algal and mushroom ingredients.  We will continue to emphasize the unique qualities, use and function of our nutraceuticals.  We intend to create market share in our target demographic by (i) emphasizing the benefits of our proprietary algal-mushroom based, all-natural, stimulant-free, sugar-free, non-GMO ingredients that combine with proven Traditional Chinese Medicine and Ayurvedic botanicals into science-based formulations, (ii) investigating additional products in response to market demand and testing, and (iii) utilizing our marketing operation to act as its sales and distribution arm to seek additional channels for sales coverage. 

As noted above, we entered into licensing agreements for the PrimiLive® and Primisleep™ products during 2021 and  changed the name PrimiSleep™ to SleepEZ™ to reflect on its capabilities as well as developing our reformulated MindnMemory™ during 2022. We also launched the advanced Cell product, Cell Rejuven™ and we are finishing the soon to launch PROTEINnMORE™, a protein nutritional supplement to enhance physical performance. While these products are all-natural botanical formulations, as our other nutraceutical products, they represent a departure from our existing product lines because they are targeted to specific markets:  MindnMemory™ is a nootropic, intended to improve concentration and mental acuity; our initial marketing efforts are oriented toward Seniors and e-gamers.  SleepEZ™ is intended for use as an aid to relaxation, with an emphasis on improving the quality of sleep. Cell Rejuven™ is an improved primitive cell anti-aging formulation that promotes high quality hair and nail growth, improves mood  We believe these products can be used in a complementary manner, to maintain on-task endurance and then to unwind and recover from such activities. 

In addition, we are investigating the use of a formulation of PluriPain® targeted toward the symptoms of pre-menstrual syndrome and menstrual pain.  Anecdotal and testimonial reports have long noted that users obtain relief from these symptoms with use of the PluriPain® product, and we have made adjustments and additions to the formulation to target these symptoms.  Early reports are promising, and we expect marketing efforts to emphasize the usefulness of our product to alleviate PMS-related symptoms.

We are also currently exploring the food and beverage market in formulating protein powder with complete proteins and also an energy coffee alternative for 4Q.

We are also exploring the combination of PluriPain®, PrimiLung™ and SleepEZ™ for COVID Long Haulers in the on-going Survey conducted by Regina Sutton, M.D. These specific formulations address some of the most troubling symptoms of long-term COVID sufferers, including brain fog, pain and sleep problems.

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With regard to animal products, the Company’s Livestock Impact Division entered into a Marketing Agreement with the owners of its Equine All-in-One™ products. The President of the Division is Bruce Colclasure, a National Cutting Horse Association champion who owns and operates the Flying C Bar Ranch and is the breeder and trainer of over 80 NCHA champion cutting horses.  Mr. Colclasure uses and endorses our Equine All-in-One™ and booster products and provides valuable feedback and testimonials regarding its function.  In addition, a high-performance formulation of our All-in-One product is used by quarter horse trainers at facilities in Oklahoma and New Mexico, with exceptional results.  We expect to use these results in our marketing efforts in 2022 and to expand our outreach program for performance horse trainers.

In light of the failures of our social media campaigns, in 2021, we commenced a marketing affiliate outreach program for the equine products, directly contacting the principals of horse clubs and associations, offering discounts, samples and other inducements, seeking to develop “product champion” and “maven” relationships.  We contacted principals in organizations with thousands of members and many more thousands of horses.  We distributed samples and marketing materials to approximately 40 principals and influencers in regional and breed-specific equine associations and anticipate feedback from these marketing initiatives in the fourth quarter.

Based in part on these initial returns, effective March 3, 2022, we commenced print and internet ad campaigns in two equine sports magazines, Quarterhorse News and Barrel Horse News; print ads in these two magazines began in April 2022, and has continued  throughout 3Q in 2022.

Manufacturing

All of the Company’s nutraceutical products are considered dietary supplements or natural foods, and we carefully avoid making health, drug or disease cure claims that could trigger regulatory compliance issues and affect our ability to market BioAdaptives products. Our active ingredients are all plant-, algal and mushroom-based and sourced worldwide from reputable suppliers who employ stringent compliance and sustainable agriculture practices .

We contract with manufacturers to assemble and package our products, all of which are subject to our inspection and approval. Fulfillment of retail internet and direct-to-reseller orders are conducted from our warehouse facilities. BioAdaptives actively investigates new products, techniques and novel applications of existing products or technology in our research. The Company’s research work has centered on investigations of all-natural supplement formulations that activate primitive cells, including stem cells and their derivatives, and natural ingredients that encourage stem cell proliferation.

As noted above, it is our intention to operate primarily as a research and  marketing company, developing consumer markets for nutraceutical products and medical devices that we license or market for others. 

Employees

The Company currently has 3 executive employees and 3 part-time employees.  We retain hourly labor on an as-needed basis and professional consultants to operate our business. Management of the Company expects to continue to use outside consultants, attorneys, and accountants, as necessary, so long as it is seeking and evaluating business opportunities. The need for additional employees, and their availability, will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.

2.  LIQUITITY AND CAPITAL RESOURCES:

Liquidity -- Financial Performance –  Three Months Ended September 30, 2022, and 2021

We had a net loss of $276,325 for the three-month period ended September 30, 2022, which was $$241,809 more  than the net loss of $$34,516 for the three-month period ended September 30, 2021. The change in our results is mainly due to the Change in fair value of derivative liabilities for September 30, 2021.

The following table summarizes key items of comparison and their related increase (decrease) for the three-month periods ended September 30, 2022, and 2021:

Revenue

Our revenues have been derived entirely from product sales.

Cost of Sales

Our cost of sales is primarily derived from contract manufacturing expenses and shipping and handling expenses related to customer fulfillment.  We also expense marketing expenses, which includes the cost of samples or products provided for promotional purposes and website content development.  We have contracted for consulting services relating to website and product label redesign and another web sales outreach campaign, and we expect expenses to accrue for such services in 4Q 2022, and beyond.

Operation Expenses

Our general, administrative and professional fees are largely attributable to office, rent, advertising, consultants and transfer agent, legal, accounting and audit fees related to our reporting requirements as a public company as well as stock-based compensation for officers, directors and consultants.

Other Income (Expense)

The Company recorded interest expenses of $94,106 and $64,543 for the three months ended September30, 2022, and 2021.

Net Loss

As a result of our operating expenses the Company reported a net loss of $276,326 and $34,516 for the three months ended September 30, 2022, and 2021.

Capital Resources – Balance Sheet and Cash Flows

Our balance sheet as of September 30, 2022, reflects current assets of $25,941, including cash in the amount of $17.909.  We currently meet cash requirements by infusions of cash from issuance of notes to finance partners and advances from shareholders. Most of these notes have conversion features that require accounting for derivative liabilities. We are hopeful that our pending Reg. A+ offering will reduce our financing costs but can provide no assurances as to whether our offering will be successful. 

Net cash used by operating activities during the nine months ended September 30, 2022, was $199,755, an increase of $76,507 from net cash used in operating activities during the nine months ended September 30, 2021.

Cash Flows from Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2022, was $134,728, a decrease of $50,272 from net cash provided in financing activities during the nine months ended September 30, 2021.

As of September 30, 2022, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Critical Accounting Estimates -- Going Concern

We are required to provide qualitative and quantitative information necessary to understand any critical accounting estimations, including uncertainties associated with such estimates.  Our critical accounting estimates, as well as the financial statements contained in this report, are all reliant on the assumption that we will continue as a going concern, which contemplates our ability to generate sufficient cash flows from operations and financing activities necessary to continue in business by employing our assets and satisfying our liabilities in the normal course of business. 

On September 30, 2022, we had $17,909 of cash on-hand and an accumulated deficit of $7,523,402, and as noted throughout this report and our financial statements and notes thereto, our independent auditors expressed their substantial doubt as to our ability to continue as a going concern as of December 31, 2021. We anticipate incurring significant losses in the future. We do not have an established source of revenue sufficient to cover our operating costs. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate profitably and/or raise additional capital through other means. If we are unable to reverse our losses, we will have to discontinue operations.

Because our business plan relies on marketing products we license from others, our capital requirements are generally limited to general operations and administration, including the costs of continuing as a public company, and our variable costs scale up or down based on our actual sales.  We believe that increasing our marketing expenses will be critical to establishing sales sufficient to cover our expenses and, if possible, generate a profit.  We anticipate using our existing financing operations to do so, which will almost certainly require either the issuance of equity or increases in existing levels of debt or, most likely, both.

Management’s plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating revenue through our business. However, even if we do raise sufficient capital to support our operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable us to develop business to a level where we will generate profits and positive cash flows from operations. These matters raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements are based on the application of accounting principles generally accepted in the United States (“US GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to US GAAP and are consistently and conservatively a that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Recent Accounting Pronouncements

The Company has evaluated recent pronouncements through Accounting Standards Updates (“ASU”) and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows.