BIOADAPTIVES, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)


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.




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1. OUR BUSINESS



Overview


BioAdaptives’ core business is to investigate, market and distribute natural
plant- and algal-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. The 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 PluriCell®, PluriPain®,
PrimiLungs™, PrimiLive® and PrimiSleep™. We also market the Lung Flute™ and
PrimiLungs™ as a combination product in our Lung Armor™ packaging, emphasizing
the anti-viral properties of the nutraceutical and general respiratory health
benefits from use of the device. PrimiLive® is a nootropic formulation that
enhances mental clarity and endurance; PrimiSleep™ is a natural soporific that
aids relaxation and sleep quality. We acquired the licenses for these products
during 2021, and have commence marketing activities for these products.

Our animal products include an Equine All-in-One® formulation, which we market
to trainers, horse owners and boarding stables. 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.

Effective February 2, 2022, the Company acquired the exclusive 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. The Agreement also allows the Company a two-year license to use the
technology covered by the Patent, including for further development of
oxygenated water products for consumers. The Agreement is more fully discussed
in the Company’s Form 8-K filed on February 6, 2022. The Company intends to
develop consumer products using the oxygenation technology, and has formed a
wholly-owned subsidiary, MORO2, Inc. to conduct these activities.

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. 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 reliant on direct and indirect sales of the Primi and Pluri lines for
humans and the All-in-One animal products for revenues, along with Lung Armor™,
none of which has produced any significant revenue yet. We have very limited
experience in marketing and have yet to develop reliable sales expectations and
forecasting.




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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, similarly failed. We are developing affiliate marketing
opportunities and recognized that a broader campaign using traditional
advertising along with social media and more contemporary marketing tools is
necessary. We anticipate a re-launch of our social media and internet-based
marketing activities in 2Q 2022, and have commenced this work with a complete
website redesign.

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 is currently
participating in a survey involving the use of PluriPain® by patients suffering
from Gadolinium Deposition Disease (“GDD”). The survey, conducted in
collaboration with a research team affiliated with Stanford University, has
produced promising results, with 60% of a small subject population reporting
significant relief. We have undertaken preliminary steps toward developing a
survey/research protocol for use of the Lung Flute™ by long-term tobacco smokers
and persons regularly exposed to second-hand tobacco smoke. We expect to
continue these explorations in 2Q and 3Q 2022.

Our products have not changed, except for refinements and improvements, and 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-based, all-natural,
stimulant-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. 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:
PrimiLive® is a nootropic, intended to improve concentration and mental acuity;
our initial marketing efforts are oriented toward e-gamers. PrimiSleep™ is
intended for use as an aid to relaxation, with an emphasis on improving the
quality of sleep. 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.

The Lung Flute™, especially when used with PrimiLungs™, shows great promise. The
device is an FDA-cleared Class II medical device that employs user-generated
acoustic waves to loosen lung secretions for expulsion. In short, the device
helps users clear their lungs. In conjunction with the anti-viral function of
PrimiLung™, the Lung Armor™ package presents great opportunities in view of
current concern related to an endemic viral environment.

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.

The Company believes that products using our oxygenated water technology will be
useful and commercially viable. Water products manufactured using the technology
demonstrate dissolved O2 levels approaching above 80mg/L that persist over an
extended period, which greatly exceeds levels and persistence in other
commercial products. Users of oxygenated water produced with our technology
report enhanced physical endurance, stamina and performance. We are currently
arranging a Pilot Run of an ingestible oxygenated water product and are
exploring usage in topical and other applications.




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With regard to animal products, the Company’s Livestock Impact Division markets
a line of effect 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, 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.
Initial returns are promising and we expect to complete our information returns
in 2Q 2022.

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 begin in one publication during April
2022
, to expand later in 2022. Internet ads are currently running.



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- or
algal-based and sourced worldwide from reputable suppliers who employ stringent
compliance and sustainable agriculture practices or operate NSF-certified (or
equivalent) facilities.

We contract exclusively with manufacturers that utilize pharmaceutical grade
facilities to assemble and package our products, all of which is 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 including those that
activate primitive cells, including stem cells and their derivatives,

With regard to medical devices, we purchase the LungFlute™, an FDA cleared Class
II device, from a company affiliated with the patent holder; it too is
manufactured in NSF-certified/GMP-compliant facilities. We do not expect to
develop any direct capability to manufacture medical devices for numerous
reasons, including a lack of capital and the fact that the amortized cost of
such facilities, if we were to construct or acquire them, is generally far
higher compared to the cost of purchase of a finished product.

We are exploring the means to bring one or more oxygenated water products to
market. Our technology has been tested in a large scale plant to produce bottled
water, so we know the process is viable and the machinery functional. The costs
of using our technology is modest – pennies per bottle – but we recognize there
are numerous better-capitalized manufacturers, many of whom also have excellent
branding. We are currently arranging a Pilot Run of our oxygenated water product
and intend to roll-out a marketing program based on user testimonials. We will
also consider licensing opportunities with competitors or other manufacturers.

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




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Employees


The Company currently has 3 full-time non-executive employees and 4 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 use of 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 March 31, 2022 and 2020

We had a net loss of $367,131 for the three-month period ended March 31, 2022,
which was $124,772 less than the net loss of $491,903 for the three-month period
ended March 31, 2021. The change in our results over the two periods is
primarily in a slight revenue increase generated and a considerable decrease in
operating and other expenses, specifically, stock-based compensation.

The following table summarizes key items of comparison and their related
increase (decrease) for the three-month periods ended March 31, 2022 and 2021:



                             2022           2021         Changes
Revenue                        5,533          4,518         1,015
Cost of Sales                  3,590          2,022         1,568
Operation Expenses           176,199        216,388       (40,189 )
Other income (expenses)     (192,875 )     (278,011 )      85,136
Net Income (loss)           (367,131 )     (492,903 )     124,772




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 a social media outreach campaign, and we expect
expenses to accrue for such services in 2Q 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 expense of $30,099 and $61,416 for the three
months ended March 31, 2022, and 2021.



Net Loss


As a result of our operating expenses the Company reported a net loss of
($367,131) and ($491,903) for the three months ended March 31, 2022 and 2021.




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Capital Resources – Balance Sheet and Cash Flows

Our balance sheet as of March 31, 2022 reflects current assets of $60,530,
including cash in the amount of $55,789 and working capital deficiency in the
amount of $1,424,695. We currently meet cash requirements by infusions of cash
from issuance of notes to finance partners. 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.



Working Capital (Deficiency)



                                March 31        March 31
                                  2022            2021           Change
Current Assets                      60,530          88,876         28,346
Current Liabilities              1,485,225       1,241,624       (243,601 )
Working Capital (Deficiency)     1,424,695       1,152,748       (271,947 )




Cash Flows



                                                          Three Months Ended March 31
                                                       2021          2021         Change
Cash provided by (used in) Operating Activities
Cash provided in Investing Activities                  (61,157 )     (60,361 )        (796 )
Cash provided by (used in) Financing Activities
Net Increase (Decrease) In Cash During Period           55,789        24,226        31,543




Net cash used by operating activities during the three months ended March 31,
2022
was $61,157, an increase of $796 from the $60,361 net cash used in
operating activities during the three months ended June 30, 2021.

Cash Flows from Financing Activities

Net cash provided by financing activities during the three months ended March
31, 2022
was $34,010, a decrease of $45,990 from the $80,000 net cash provided
in financing activities during the three months ended March 31, 2021.

As of March 31, 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.




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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 March 31, 2022, we had $55,789 of cash on-hand and an accumulated deficit of
$7,023,240, and as noted throughout this report and our financial statements and
notes thereto, our independent auditors have 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 of
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.




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