UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





(Mark
One)





x
            QUARTERLY REPORT UNDER SECTION 13
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934.





For the
quarterly period ended March 31, 2010





 ̈
            TRANSITION REPORT UNDER SECTION
      13 OR 15(d) OF THE EXCHANGE
ACT





For the
transition period from _________ to ________





Commission
file numbers 000-32141





NUTRA
PHARMA CORP.





(Name of
registrant as specified in its charter)





California
              
              91-2021600(State
      or Other Jurisdiction of Organization)
              
              (IRS
      Employer Identification
Number)





2776 University Drive, Coral Springs,
      Florida
            
            33065(Address of principal executive offices)
            
            (Zip
      Code)




(954)
509-0911





(Issuer's
telephone number)





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.


Yes x No  ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes  ̈ No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.




Large
      accelerated filer  ̈
            Accelerated
      filer  ̈Non-accelerated
      filer  ̈
            Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes  ̈ No x





The
number of shares outstanding of the registrant's common stock, par value $0.001
per share, as of May 17, 2010 was 275,675,232.





TABLE OF
CONTENTS





PART
      I. FINANCIAL INFORMATION
                
                3Item
      1. Financial Statements
                
                3Condensed
      Consolidated Balance Sheets as of  March 31, 2010 (Unaudited)
      and December 31, 2009
                
                3Condensed
      Consolidated Statements of Operations for the Three Months Ended March 31,
      2010 and 2009 (Unaudited)
                
                4Condensed
      Consolidated Statements of Cash Flows for the three months ended March 31,
      2010 and 2009 (Unaudited)
                
                5Notes
      to Condensed Consolidated Financial Statements (Unaudited)
                
                6Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
                
                11Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
                
                16Item
      4. Controls and Procedures
                
                16PART
      II. OTHER INFORMATION
                
                17Item
      1. Legal Proceedings
                
                17Item
      1A. Risk Factors
                
                17Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                
                17Item
      3. Defaults Upon Senior Securities
                
                17Item
      5. Other Information
                
                17Item
      6. Exhibits
                
                18




2


PART
I. FINANCIAL INFORMATION





Item
1.  Financial Statements





NUTRA
PHARMA CORP.


Condensed
Consolidated Balance Sheets




March 31,
                
                
                December 31,2010
                
                
                2009(Unaudited)ASSETSCurrent
      assets:Cash
                
                $
                242,820
                
                
                $
                802,875Accounts
      receivable
                
                
                491,674
                
                
                
                239,583Inventory
                
                
                300,965
                
                
                
                165,786Prepaid
      expenses
                
                
                48,267
                
                
                
                23,290Total
      current assets
                
                
                1,083,726
                
                
                
                1,231,534Property
      and equipment, net
                
                
                64,250
                
                
                
                12,369Other
      assets
                
                
                74,069
                
                
                
                8,803TOTAL
      ASSETS
                
                $
                1,222,045
                
                
                $
                1,252,706LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable
                
                $
                358,409
                
                
                $
                104,223Accrued
      expenses and other liabilities
                
                
                958,048
                
                
                
                960,548Due
      to officers
                
                
                1,164,570
                
                
                
                1,252,385Other
      loans payable
                
                
                80,000
                
                
                
                80,000Total
      current liabilities
                
                
                2,561,027
                
                
                
                2,397,156Stockholders'
      deficit:Common
      stock, $0.001 par value, 2,000,000,000 shares authorized; 272,925,232 and
      270,425,232 shares issued and outstanding, respectively
                
                
                272,926
                
                
                
                270,426Additional
      paid-in capital
                
                
                25,261,717
                
                
                
                25,157,967Accumulated
      deficit
                
                
                (26,873,625
                )
                
                
                (26,572,843
                )Total
      stockholders' deficit
                
                
                (1,338,982
                )
                
                
                (1,144,450
                )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                1,222,045
                
                
                $
                1,252,706




See the
accompanying notes to the condensed consolidated financial
statements.


3


NUTRA
PHARMA CORP.


Condensed
Consolidated Statements of Operations  - Unaudited




Three Months Ended March 31,2010
                
                
                2009Net
      sales
                
                $
                864,424
                
                
                $
                18,230Cost
      of sales
                
                
                402,542
                
                
                
                260Gross
      profit
                
                
                461,882
                
                
                
                17,970Costs
      and expenses:Salaries
      and employee benefits
                
                
                257,433
                
                
                
                127,226Selling,
      general and administrative - including stock based compensation of
      $106,250 and $20,000
                
                
                437,229
                
                
                
                125,116Research
      and development
                
                
                54,813
                
                
                
                70,220Interest
      expense
                
                
                13,189
                
                
                
                16,321Total
      costs and expenses
                
                
                762,664
                
                
                
                338,883Net
      loss
                
                $
                (300,782
                )
                
                $
                (320,913
                )Per
      share information - basic and diluted:Loss
      per common share
                
                $
                (0.00
                )
                
                $
                (0.00
                )Weighted
      average common shares outstanding
                
                
                271,369,676
                
                
                
                211,276,482





See the
accompanying notes to the condensed consolidated financial
statements.


4


NUTRA
PHARMA CORP.


Condensed
Consolidated Statements of Cash Flows - Unaudited




Three
      Months Ended March 31,2010
                                                
                                                
                                                2009Net
      cash used in operating activities
                                                
                                                $
                                                (406,560
                                                )
                                                
                                                $
                                                (277,359
                                                )Cash
      flows from investing activities:Acquisition
      of property and equipment
                                                
                                                
                                                (53,495
                                                )
                                                
                                                
                                                -Net
      cash used in investing activities
                                                
                                                
                                                (53,495
                                                )
                                                
                                                
                                                -Cash
      flows from financing activities:Common
      stock issued for cash
                                                
                                                
                                                -
                                                
                                                
                                                
                                                35,000Repayment
      of notes payable
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Repayment
      of stockholder loans
                                                
                                                
                                                (100,000
                                                )
                                                
                                                
                                                -Loans
      from stockholders
                                                
                                                
                                                -
                                                
                                                
                                                
                                                249,000Net
      cash (used in) provided by financing activities
                                                
                                                
                                                (100,000
                                                )
                                                
                                                
                                                284,000Net
      (decrease) increase in cash
                                                
                                                
                                                (560,055
                                                )
                                                
                                                
                                                6,641Cash
      - beginning of period
                                                
                                                
                                                802,875
                                                
                                                
                                                
                                                50,910Cash
      - end of period
                                                
                                                $
                                                242,820
                                                
                                                
                                                $
                                                57,551Supplemental
      disclosure of cash flow information and non-cash financing
      activities:Cash
      paid for interest
                                                
                                                $
                                                1,004
                                                
                                                
                                                $
                                                2,761Cash
      paid for income taxes
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -Stock
      issued for deferred compensation
                                                
                                                $
                                                1,275,000
                                                
                                                
                                                $
                                                -Common
      stock issued for services
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                20,000





See the
accompanying notes to the condensed consolidated financial
statements.


5


NUTRA
PHARMA CORP.


Notes
to Condensed Consolidated Financial Statements  -
Unaudited


March
31, 2010





1.           BASIS
OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Organization





Nutra
Pharma Corp. ("Nutra Pharma" or "the Company") is a holding company that owns
intellectual property and operations in the biotechnology
industry.  Nutra Pharma incorporated under the laws of the state of
California on February 1, 2000, under the original name of
Exotic-Bird.com.  The Company was in the development stage through
September 30, 2009.





Through
its wholly-owned subsidiaries, ReceptoPharm, Inc. (“ReceptoPharm”) and
Designer Diagnostics Inc. (“Designer Diagnostics”), the Company conducts drug
discovery research and development activities.  In October 2009, the
Company launched its first consumer product called Cobroxin, an over-the-counter
pain reliever designed to treat moderate to severe chronic pain.





Principles
of Consolidation





The
condensed consolidated financial statements presented herein include the
accounts of Nutra Pharma and its wholly-owned subsidiaries Designer Diagnostics
and ReceptoPharm.





All
intercompany transactions and balances have been eliminated in
consolidation.





Basis
of Presentation





The
condensed consolidated financial statements and notes are presented in
accordance with the rules and regulations of the Securities and Exchange
Commission and do not contain certain information included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2009.  In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included and are of a normal, recurring nature. Interim
results are not necessarily indicative of results for a full year. 
Therefore, the interim condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
contained in the Company’s Annual Report on Form 10-K.





The
Company's condensed consolidated financial statements are presented on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.





The
Company has experienced a net loss of $300,782 for the three months ended
March 31, 2010, and has an accumulated deficit of $26,873,625 at March 31,
2010.  In addition, the Company used $406,560 of cash for operations
during the three months ended March 31, 2010 and had working capital and
stockholders’ deficits at March 31, 2010 of $1,477,301 and
$1,338,982.





The items
discussed above raise substantial doubt about the Company’s ability to continue
as a going concern.





The
Company's ability to continue as a going concern is contingent upon its ability
to secure additional financing, increase ownership equity and attain profitable
operations.  In addition, the Company's 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 the Company operates.





The
Company is pursuing additional financing for its operations and seeking
additional investments.  In addition, the Company is seeking to expand
its revenue base.  Failure to secure such additional financing or to
raise additional equity capital and to establish a revenue base may result in
the Company depleting its available funds and not being able pay its
obligations.





The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.





Use
of Estimates





The
accompanying condensed consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States of
America which require management to make certain estimates and
assumptions.  These estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense.  Significant estimates include our belief that we
will be able to raise and/or generate sufficient cash to continue as a going
concern, the allowance for doubtful accounts, the recoverability of long-lived
assets and the fair value of stock-based compensation.  Actual results
could differ from those estimates.


6


NUTRA
PHARMA CORP.


Notes
to Condensed Consolidated Financial Statements  -
Unaudited
 March
31, 2010





Revenue
Recognition





In
general, the Company records revenue when persuasive evidence of an arrangement
exists, services have been rendered or product delivery has occurred, the sales
price to the customer is fixed or determinable, and collectability is reasonably
assured.




Cash
and Cash Equivalents





The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.





Accounts
Receivable





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.  There was no allowance at March 31,
2010.





Inventories





Inventories
are valued at the lower of cost or market on an average cost basis and consist
primarily of raw materials and finished goods.





Research
and Development





Research
and development is charged to operations as incurred.





Reclassifications





Certain
amounts in the accompanying condensed consolidated financial statements have
been reclassified to conform with the current period presentation.





Stock-Based
Compensation





The
Company records stock-based compensation in accordance with FASB ASC 718, Stock
Compensation.  FASB ASC 718 requires that the cost resulting
from all share-based transactions be 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.  It 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.





Net
Loss Per Share





Net loss
per share is calculated in accordance with FASB ASC 260, Earnings per
Share.  Basic earnings (loss) per share are calculated by
dividing net income (loss) by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share are calculated by
dividing net income (loss) by the weighted average number of common shares and
dilutive common stock equivalents outstanding.  During periods in
which we incur losses, common stock equivalents, if any, are not considered, as
their effect would be anti-dilutive or have no effect on earnings per
share.





Recent
Accounting Pronouncements





The
following Accounting Standards Codification Updates have been issued, or became
effective, since the beginning of the current period covered by these financial
statements:


7


NUTRA
PHARMA CORP.
 Notes
to Condensed Consolidated Financial Statements  -
Unaudited
 March
31, 2010


Pronouncement
            
            Issued
            
            TitleASU
      No. 2010-01
            
            January 
      2010
            
            Equity
      (Topic 505):  Accounting for Distributions to Shareholders with
      Components of Stock and Cash – a consensus of the FASB Emerging Issues
      Task ForceASU
      No. 2010-02
            
            January 
      2010
            
            Consolidation
      (Topic 810):  Accounting and Reporting for Decreases in Ownership of
      a Subsidiary – a Scope ClarificationASU
      No. 2012-03
            
            January
      2010
            
            Extractive
      Activities – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and
      DisclosuresASU
      No. 2010-04
            
            January
      2010
            
            Accounting
      for Various Topics: Technical Corrections to SEC
  ParagraphsASU
      No. 2010-05
            
            January
      2010
            
            Compensation 
      - Stock Compensation (Topic718): Escrowed Share Arrangements and the
      Presumption of CompensationASU
      No. 2010-06
            
            January
      2010
            
            Fair
      Value Measurements and Disclosures (Topic 820): Improving Disclosures
      about Fair Value Measurements





ASU
      No. 2010-07
                
                January
      2010
                
                Not-for-Profit
      Entities (Topic 958): Not-for-Profit Entities – Mergers and
      AcquisitionsASU
      No. 2010-08
                
                February
      2010
                
                Technical
      Corrections to Various TopicsASU
      No. 2010-09
                
                February
      2010
                
                Subsequent
      Events (Topic 855): Amendments to Certain Recognition and Disclosure
      RequirementsASU
      No. 2010-10
                
                February
      2010
                
                Consolidation
      (Topic 810): Amendments for Certain Investment FundsASU
      No. 2010-11
                
                March 
      2010
                
                Derivatives
      and Hedging (Topic 815): Scope Exception Related to Embedded Credit
      DerivativesASU
      No. 2010-12
                
                April
      2010
                
                Income
      Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health
      Care Reform Acts (SEC Update)ASU
      No. 2010-13
                
                April
      2010
                
                Compensation—Stock
      Compensation (Topic 718): Effect of Denominating the Exercise Price of a
      Share-Based Payment Award in the Currency of the Market in Which the
      Underlying Equity Security Trades—a consensus of the FASB Emerging Issues
      Task ForceASU
      No. 2010-14
                
                April
      2010
                
                Accounting
      for Extractive Activities—Oil & Gas—Amendments to Paragraph
      932-10-S99-1 (SEC Update)ASU
      No. 2010-15
                
                April
      2010
                
                Financial
      Services—Insurance (Topic 944): How Investments Held through Separate
      Accounts Affect an Insurer’s Consolidation Analysis of Those Investments—a
      consensus of the FASB Emerging Issues Task ForceASU
      No. 2010-16
                
                April
      2010
                
                Entertainment—Casinos
      (Topic 924): Accruals for Casino Jackpot Liabilities—a consensus of the
      FASB Emerging Issues Task ForceASU
      No. 2010-17
                
                April
      2010
                
                Revenue
      Recognition—Milestone Method (Topic 605): Milestone Method of Revenue
      Recognition—a consensus of the FASB Emerging Issues Task
    ForceASU
      No. 2010-18
                
                April
      2010
                
                Receivables
      (Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool
      That is Accounted for as a Single Asset—a consensus of the FASB Emerging
      Issues Task ForceASU
      No. 2010-19
                
                May
      2010
                
                Foreign
      Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency
      Exchange Rates


8


NUTRA
PHARMA CORP.


Notes
to Condensed Consolidated Financial Statements  -
Unaudited
 March
31, 2010





To the
extent appropriate, the guidance in the above Accounting Standards Codification
Updates is already reflected in our condensed consolidated financial statements
and management does not anticipate that these accounting pronouncements will
have any future effect on our consolidated financial statements.





2.  INVENTORIES





Inventories
are valued at the lower of cost or market on an average cost
basis.  At March 31, 2010, inventory of $300,965 consisted of $241,585
of raw materials and $59,380 of finished goods.  At December 31, 2009,
inventory of $165,786 consisted entirely of raw materials.





3.  DUE
TO OFFICERS





Officer
Loans





During
the year ended December 31, 2009, the Company borrowed $546,530 from its
President, Rik Deitsch, and repaid him $709,663, bringing the total amount owed
to Mr. Deitsch to $1,151,361 at December 31, 2009.  Included in the
amount owed to Mr. Deitsch is $211,119 of accrued interest.





During
the three month period ended March 31, 2010, the Company repaid Mr. Deitsch an
additional $100,000 bringing the total amount owed to Mr. Deitsch to $1,062,306
at March 31, 2010.  This amount includes $222,064 of accrued
interest.  This loan is due on demand and bears interest at a rate of
4% per annum.





At March
31, 2010, the Company was indebted to Paul Reid, President of ReceptoPharm in
the amount of $102,264.  This amount includes accrued interest of
$22,437.  This loan is due on demand and bears interest at a rate of
5% per annum.  The loan is secured by certain intellectual property of
ReceptoPharm.  At December 31, 2009 the Company owed Mr. Reid
$101,024, of which amount $21,197 was for accrued interest.





4.  STOCKHOLDERS'
DEFICIT





Common
Stock Issued for Services





On
February 26, 2010, the Company issued 2.5 million shares to a consultant for
services to be rendered from March 1, 2010 to February 28, 2011.  Of this
total, 2.0 million shares were restricted and 500,000 shares were free-trading
pursuant to the Company’s S-8.  The shares were valued at $0.51 per share
which was the fair market value of the Company’s common stock on February 26,
2010.  The expense is being recorded in selling, general and
administrative over the service period of one year.





5.  STOCK
OPTIONS AND WARRANTS





On March
31, 2010, the Company had a total of 50,315,000 stock options and warrants
outstanding at a weighted average exercise price of $0.11.  There were
no awards of options or warrants, and no exercises of such, during the three
months ended March 31, 2010 and all outstanding options are vested and
exercisable at that date.





6.  COMMITMENTS
AND CONTINGENCIES





Patricia
Meding, et. al. v. ReceptoPharm, Inc. f/k/a Receptogen, Inc.


9


NUTRA
PHARMA CORP.


Notes
to Condensed Consolidated Financial Statements  -
Unaudited
 March
31, 2010





On August
18, 2006, ReceptoPharm was named as a defendant in Patricia Meding, et. al. v.
ReceptoPharm, Inc. f/k/a Receptogen, Inc., Index No.:18247/06 (New York Supreme
Court, Queens County).  The original proceeding claimed that
ReceptoPharm owed the Plaintiffs, including Patricia Meding, a former
ReceptoPharm officer and shareholder and several corporations that she claims to
own, the sum of $118,928 plus interest and counsel fees on a series promissory
notes that were allegedly executed in 2001 and 2002.  On August 23,
2007, the Queens County New York Supreme Court issued a decision denying
Plaintiffs motion for summary judgment in lieu of a complaint, concluding that
there were issues of fact concerning the enforceability of the promissory
notes.  On May 23, 2008, the Plaintiffs filed an amended complaint in
which they reasserted their original claims and asserted new claims seeking
damages of no less than $768,506 on their claims that in or about June 2004
ReceptoPharm breached its fiduciary duty to the Plaintiffs as shareholders of
ReceptoPharm by wrongfully canceling certain of their purported ReceptoPharm
share certificates. The damages associated with the Plaintiff's claims could
rise as the result of increases in the Company's share price as the Receptopharm
shares may be convertible into the Company's common shares.





In late
2009, Plaintiffs filed a motion seeking to further amend their complaint
alleging that ReceptoPharm violated Plaintiffs contractual and statutory rights
by cancelling additional 1,214,800 Receptopharm share certificates and failing
to permit the Plaintiffs to exercise dissenting shareholder rights with respect
to those share certificates. In a decision and order dated March 22, 2010, the
court denied Plaintiffs' motion to further amend their complaint to assert
claims regarding the 1,214,800 shares. However, the Plaintiffs have moved to
reargue the court's decision on their motion to amend, and also have filed a
notice of appeal of the court's decision denying the motion to amend, in the
event that the court - on reargument - affirms its previous decision denying the
motion to amend.





The
damages associated with the Plaintiff's claims could rise in the event that the
court ultimately permits them to assert their proposed new claims regarding the
1,214,800 shares.





ReceptoPharm
believes the suit is without merit and has filed an answer denying the material
allegations of the amended complaint and asserted a series of counterclaims
against the Plaintiffs alleging claims for declaratory judgment, fraud, breach
of fiduciary duty, conversion and unjust enrichment as a result of the
promissory notes.  In addition, Receptopharm has opposed the
Plaintiffs' recent motion to amend and the motion is currently pending before
the Court.  Discovery in this matter is ongoing. The
Company intends to vigorously contest this matter.





Concentrations





During
the three months ended March 31, 2010, all of the Company’s product sales
were to a single customer.   At March 31, 2010, $491,674 was due from
this customer, which represents 100% of our receivable
balance.





7.  SUBSEQUENT
EVENTS





Exercise
of Common Stock Warrants





In April
2010, the Company sold an aggregate of 2,500,000 shares of restricted common
stock to three (3) investors at a price per share of $0.10 and received proceeds
of $250,000.  These shares were sold pursuant to warrant agreements
between the Company and the investors.





Stock
Based Compensation





On May 5,
2010, the Company issued 250,000 shares to a consultant for services to be
rendered during 2010.  The shares were valued at $0.32 per share which was
the fair market value of the Company’s common stock on May 5,
2010.


10


Forward
Looking Statements





This
Quarterly Report on Form 10-Q for the period ending March 31, 2010 contains
forward-looking statements that involve risks and uncertainties, as well as
assumptions that, if they never materialize or prove incorrect, could cause the
results of Nutra Pharma Corp. and its subsidiaries (hereafter referred to as
"we", "our" or "us") 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 the following risks,
among others,  in connection with our business: (a) we have
experienced recurring net losses and have a working capital deficiency, which
raises substantial doubt about our ability to continue as a going concern; (b)
our history of losses makes it difficult to evaluate our current and future
business and our future financial results;  (c) our operational plans
are dependent upon generating sufficient revenues from product sales and
clinical research services and/or obtaining equity or
other  financing; (d) we are subject to substantial U.S. Food and Drug
Administration ("FDA") and other regulations which may increase our costs or
otherwise adversely affect our operations; (e) a market for our products may
never develop; (f) if we fail to adequately protect our patents, we may be
unable to proceed with development of potential drug products; (g) we are
dependent upon patents, licenses and other proprietary rights from third
parties; should we lose such rights our operations will be negatively affected;
(h) to date, we have not generated any significant revenues; (i) to date, none
of our proposed products have received FDA approval; (j) should we continue to
have insufficient funds to conduct our operations, development of our possible
future products will be negatively impacted; (k) we may be unable to compete
against our competitors in the homeopathic product, medical device and
biopharmaceutical markets since our competitors have superior financial and
technical resources than we do; (l) we completed our acquisition of ReceptoPharm
as our wholly owned subsidiary in April 2008; our operations and financial
condition will be negatively affected if we fail to efficiently manage their
operations and their expansion plans pending adequate financing; and (m) if we
fail to generate adequate revenues from our first product, Cobroxin, our
financial condition will be negatively affected.





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; (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.





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





Introduction





Our
business during the first quarter of 2010 has focused upon marketing our fully
developed three homeopathic drugs for the treatment of pain:


·
            Cobroxin,
      an over-the-counter pain reliever designed to treat moderate to severe
      (Stage 2) chronic pain; and


·
            Nyloxin
      OTC (Stage 2 Pain) and Nyloxin Rx (Stage 3 Pain), stronger versions
      of Cobroxin.





We will
continue this focus through the remainder of 2010.





During
the first quarter of 2010, we generated revenues of $864,424 from Cobroxin
sales.  During the first quarter of 2010, we continued to focus on
expanding brand awareness for our over-the-counter pain relievers, Cobroxin,
Nyloxin OTC and Nyloxin Rx by hiring our first Chief Marketing Officer, David
Isserman, to: (a) coordinate marketing and awareness for those pain relievers
through attendance at various conferences; (b) seek out additional international
distribution partners for our Nyloxin branded pain relievers, (c) assist
XenaCare Holdings, Inc. (“XenaCare”) our U.S. Cobroxin distributor, with the
creation of marketing and advertising materials including print advertisements,
television commercials, packaging enhancements and television interviews; (d)
coordinate our ongoing drug registration process in Europe, Canada, Brazil and
Colombia, including reviewing distributor candidates within those
territories.  XenaCare continues to expand its distribution network to
include retailers such as CVS and Walgreens. We plan to continue our brand
development and operations during the remainder of 2010 by continuing the above
efforts, researching potential product line extensions for our branded pain
relievers and organizing clinical studies that support our current drug products
and advance our current research and development pipeline.


11


We offer
Cobroxin, our over-the-counter pain reliever clinically proven to treat moderate
to severe (Stage 2) chronic pain that was developed by ReceptoPharm, our drug
discovery arm and wholly owned subsidiary.  Cobroxin is marketed
online and at retailers through our United States distributor,
XenaCare.  In August 2009, we completed an agreement with XenaCare
granting it the exclusive license to market and distribute Cobroxin within the
United States.  In mid-October 2009, XenaCare began selling Cobroxin
online through its product website, Cobroxin.com.  In November 2009,
XenaCare began selling Cobroxin to brick-and-mortar retailers, including
distribution to CVS in March 2010 and Walgreens in May 2010. To support ongoing
sales, XenaCare intends to conduct an extensive marketing campaign, consisting
of print, online and broadcast advertising.





Cobroxin
is available at the following retailers, 6 of which were secured during the
first quarter of 2010:


·
            CVS


·
            Walgreens


·
            Winn
      Dixie


·
            Support
      Plus


·
            eVitamins


·
            Duane
      Reade


·
            Overstock.com


·
            Kerr
      Drug


·
            Meijer


·
            Quick2You.com


·
            Johnson
      Smith & Co


·
            Benchmark
      Brands


·
            Hannaford


·
            Kinney
      Drug


·
            Value
      Drug


·
            Amerimark


·
            Vitamin
      World


·
            Drugstore.com


·
            SweetBay


·
            CDMA


·
            Amazon.com


·
            Dr.
      Leonard's





Cobroxin
is currently 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.





Cobroxin
offers several benefits as a pain reliever.  With increasing concern
about consumers using opioid and acetaminophen-based pain relievers, Cobroxin
provides an alternative that does not rely on opiates or non-steroidal
anti-inflammatory drugs, otherwise known as NSAIDs, for its pain relieving
effects.  Cobroxin also has a well-defined safety profile. Since the
early 1930s, the active pharmaceutical ingredient (API) of Cobroxin, 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 Cobroxin include headache, nausea, vomiting, sore
throat, allergic rhinitis and coughing.




Nyloxin
OTC/Nyloxin Rx





Nyloxin
OTC and Nyloxin Rx are similar to Cobroxin in that they both contain the same
active ingredient as Cobroxin, Asian cobra venom.  The primary
difference between Nyloxin OTC/Nyloxin Rx and Cobroxin is the dilution level of
the venom, with Nyloxin OTC and Nyloxin Rx being more concentrated then Cobroxin
and Nyloxin Rx being more concentrated than Nyloxin OTC.




12




We intend
to market Nyloxin OTC and Nyloxin Rx as treatments for moderate to severe
chronic pain during our fourth quarter of 2010, pending successful completion of
international drug applications.   Nyloxin OTC will be available
as an oral spray for treating lower back pain, migraines, neck aches, shoulder
pain, cramps and neuralgia and as a topical gel for treating joint pain and pain
associated with repetitive stress and arthritis.  Nyloxin Rx will be
available as an oral spray and gel application for treating the same physical
indications, as well as Angina Pectoris,Angina Faucium and
Ovarian Pain, but is aimed at treating the most severe (Stage 3) pain that
inhibits one’s ability to function fully.





We intend
to begin selling Nyloxin Rx in the form of gel and spray products outside of the
United States upon completion of international drug registrations, which we
estimate will be completed during the fourth quarter of
2010.  Additionally, we plan to complete two additional human clinical
studies aimed at comparing the ability of Nyloxin Rx to replace prescription
pain relievers. Both of these studies are planned to begin during the second
quarter of 2010.





In
December 2009, we began marketing Nyloxin OTC and Nyloxin Rx at www.nyloxin.com.





Critical
Accounting Policies and Estimates





Our
consolidated 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 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:  In general, the Company records revenue when
persuasive evidence of an arrangement exists, services have been rendered or
product delivery has occurred, the sales price to the customer is fixed or
determinable, and collectability is reasonably assured. There was no
provision for sales returns at March 31, 2010 as all products sold as of that
date have been accepted by our customer and contractually we are not obligated
to accept returns.





Accounts Receivable and Allowance
for Doubtful Accounts: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.  There was no allowance for doubtful accounts at March 31,
2010.





Inventory
Obsolescence:  Inventories are valued at the lower of cost or
market value using the average cost method.  We periodically perform
an evaluation of inventory for excess and obsolete items.  At March
31, 2010, our inventory consisted of finished goods and raw materials that are
utilized in the manufacturing of finished goods.  These raw materials
generally have expiration dates in excess of 10 years.  We performed
an evaluation of our inventory and determined that at March 31, 2010, there were
no obsolete or excess items.


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.   We do not believe there to be any other impairments of
long-lived assets as of March 31, 2010.


13




Stock Based Compensation:We
record stock based compensation in accordance with FASB ASC 718, Stock
Compensation. FASB ASC 718 requires that the cost resulting from all share-based
transactions be 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.





Results
of Operations – Comparison of Three Month Periods Ended March 31, 2010 and March
31, 2009





Net sales
for the three months ended March 31, 2010 were $864,424 compared to $18,230 for
the three months ended March 31, 2009.  The increase in net sales is
due to the fact that during the quarter ended March 31, 2010, our net sales
consisted solely of sales of our consumer product Cobroxin, which we began
selling in the fourth quarter of 2009.  Our net sales for the three
months ended March 31, 2009 were generated from the provision of clinical
research services to independent third parties.





Cost of
sales for the three month period ended March 31, 2010 was $402,542 compared to
$260 for the three month period ended March 31, 2009.  Our cost of
sales includes the direct costs associated with the manufacturing of
Cobroxin.  Our gross profit margin for the three month period ended
March 31, 2010 was $461,882 or 53.4%.  A comparison of gross profit
from 2010 to 2009 is not meaningful since we did not sell Cobroxin during the
quarter ended March 31, 2009.





Salaries
and employee benefits for the three months ended March 31, 2010 were $257,433
compared to $127,226 for the comparable period in 2009.  The increase
of $130,207 or 102.3% was attributable to the increase in the number of
full-time employees from four in 2009 to ten in 2010.





Selling,
general and administrative expenses (“SG&A”) increased $312,113 or 249.5%
from $125,116 for the quarter ended March 31, 2009 to $437,229 for the quarter
ended March 31, 2010, generally due to increased operations.  Our
SG&A expenses include office expenses such as rent and utilities, product
liability insurance and outside legal and accounting services.  Also
included in SG&A expenses is stock based compensation expense which
increased $86,250 or 431.3% from $20,000 for the three month period ending March
31, 2009 to $106,250 for the three month period ending March 31,
2010.  During the quarter ended March 31, 2010 we entered into a lease
for office space which accounted for a portion of the overall increase in
SG&A expenses.





Research
and development expenses decreased $15,407 or 21.9% from $70,220 for the quarter
ended March 31, 2009 to $54,813 for the comparable period in
2010.  Our research expenses are related to ongoing research
activities pertaining to ReceptoPharm’s leading drug compound,
RPI-78.





Interest
expense decreased $3,132 or 19.2%, from $16,321 for the quarter ended March 31,
2009 to $13,189 for the comparable period in 2010.  This decrease was
due to an overall lower level of indebtedness in the quarter ended March 31,
2010 compared to the quarter ended March 31, 2009.





Our net
loss decreased by $20,131 or 6.3%, from $320,913 for the quarter ended March 31,
2009 to $300,782 for the comparable period in 2010.





Liquidity
and Capital Resources





Our
independent registered public accounting firm noted in their report on our
consolidated financial statements for the year ended December 31, 2009 that our
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
financial statements for the period ended March 31, 2010, we have an accumulated
deficit of $26,873,625 and working capital and stockholders’ deficits of
$1,477,301 and $1,338,982, respectively.





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.




Historically,
we have relied upon loans from our Chief Executive Officer Rik Deitsch, to fund
costs associated with our operations.  These loans are unsecured,
accrue interest at a rate of 4.0% per annum and are due on
demand.  During 2009, we borrowed $546,530 from Mr. Deitsch and repaid
him $709,663.  During the three month period ended March 31, 2010, we
repaid an additional $100,000 to Mr. Deitsch bringing the total amount owed to
Mr. Deitsch $1,062,306 as of March 31, 2010.  Included in this amount
is $222,064 of accrued interest.


14




During
the year ended December 31, 2009, we raised a total of $3,060,275 through
private placements of shares of our common stock.  Of the total,
$2,795,900 was raised through the sale of 34,948,750 shares at a price per share
of $0.08 and $264,375 was raised through the sale of 10,575,000 shares at a
price per share of $0.025.  We did not conduct any private placements
of shares of our common stock during the quarter ended March 31,
2010.





We
estimate that we will require approximately $1,600,000 to fund our existing
operations and the operations of our subsidiaries ReceptoPharm and Designer
Diagnostics over the next twelve months.  These costs include: (i)
compensation for our full-time employees; (ii) compensation for two (2)
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.  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 sale of Cobroxin 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.





Uncertainties
and Trends





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





·
            Whether
      Cobroxin, Nyloxin OTC, and Nyloxin Rx will be accepted by consumers in
      retail establishments where it is
sold;


·
            Because
      Cobroxin 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
      our international drug applications will be approved and in how many
      countries;


·
            Whether
      we will be successful in marketing Cobroxin, Nyloxin OTC, and Nyloxin Rx
      in our target markets, including whether we will 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.


·
            If
      we fail to compete effectively in the intensely competitive biotechnology
      area, our operations and market position will be negatively
      impacted.


·
            If
      we fail to successfully execute our planned partnering and out-licensing
      of products or technologies, our future performance will be adversely
      affected.


·
            The
      recent economic downturn and related credit and financial market crisis
      may adversely affect our ability to obtain financing, conduct our
      operations and realize opportunities to successfully bring our
      technologies to market.


·
            Biotechnology
      industry related litigation is substantial and may continue to rise,
      leading to greater costs and unpredictable
  litigation


·
            If
      we fail to comply with extensive legal/regulatory requirements affecting
      the healthcare industry, we will face increased costs, and possibly
      penalties and business losses.





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.


15




We do not
have any off-balance sheet arrangements or commitments 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.





Item
3. Quantitative and Qualitative Disclosures About Market Risk





Not
applicable





Item 4. Controls and
Procedures





Disclosure
Controls and Procedures





As
required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(“Exchange Act”) we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures. This evaluation was
carried out under the supervision of our Chief Executive Officer who is also our
Principal Financial and Accounting Officer. Following this inspection, this
officer concluded that our disclosure controls and procedures were effective as
of March 31, 2010, the end of the period covered by this report.





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer, who also acted as our Principal Financial Officer as appropriate, to
allow timely decisions regarding required disclosure.





Changes
in internal control over financial reporting





There was
no change in our internal control over financial reporting that occurred during
the period covered by this Quarterly Report on Form 10-Q that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting. We are aware that any system of controls, however well
designed and operated, can only provide reasonable, and not absolute, assurance
that the objectives of the system are met, and that maintenance of disclosure
controls and procedures is an ongoing process that may change over
time.


16


PART II.  OTHER INFORMATION





Item 1. Legal Proceedings





On August
18, 2006, ReceptoPharm was named as a defendant in Patricia Meding, et. al. v. ReceptoPharm,
Inc. f/k/a Receptogen, Inc., Index No.: 18247/06 (New York Supreme Court, Queens
County).  The original proceeding claimed that ReceptoPharm owed the
Plaintiffs, including Patricia Meding, a former ReceptoPharm officer and
shareholder and several corporations that she claims to own, the sum of $118,928
plus interest and counsel fees on a series promissory notes that were allegedly
executed in 2001 and 2002.  On August 23, 2007, the Queens County New
York Supreme Court issued a decision denying Plaintiffs’ motion for summary
judgment in lieu of a complaint, concluding that there were issues of fact
concerning the enforceability of the promissory notes.  On May 23,
2008, the Plaintiffs filed an amended complaint in which they reasserted their
original claims and asserted new claims seeking damages of no less than $768,506
on their claims that in or about June 2004 ReceptoPharm breached its fiduciary
duty to the Plaintiffs as shareholders of ReceptoPharm by wrongfully canceling
certain of their purported ReceptoPharm share certificates. The damages
associated with the Plaintiffs’ claims could rise as the result of increases in
the Company's share price as the ReceptoPharm shares may be convertible into the
Company's common shares.





In late
2009, Plaintiffs filed a motion seeking to further amend their complaint
alleging that ReceptoPharm violated Plaintiffs’ contractual and statutory rights
by cancelling additional 1,214,800 ReceptoPharm share certificates and failing
to permit the Plaintiffs to exercise dissenting shareholder rights with respect
to those share certificates. In a decision and order dated March 22, 2010, the
court denied Plaintiffs' motion to further amend their complaint to assert
claims regarding the 1,214,800 shares. However, the Plaintiffs have moved to
reargue the court's decision on their motion to amend, and also have filed a
notice of appeal of the court's decision denying the motion to amend, in the
event that the court, on re-argument, affirms its previous decision denying the
motion to amend. The damages associated with the Plaintiffs’ claims could rise
in the event that the court ultimately permits them to assert their proposed new
claims regarding the 1,214,800 shares.





ReceptoPharm
believes the suit is without merit and has filed an answer denying the material
allegations of the amended complaint and asserted a series of counterclaims
against the Plaintiffs alleging claims for declaratory judgment, fraud, breach
of fiduciary duty, conversion and unjust enrichment as a result of the
promissory notes.  In addition, ReceptoPharm has opposed the
Plaintiffs' recent motion to amend and the motion is currently pending before
the Court.  Discovery in this matter is ongoing. ReceptoPharm intends
to vigorously contest this matter.





There are
no other legal proceedings that occurred during our quarter ending March 31,
2010 that are reportable.





Item
1A.  Risk Factors





As a
Smaller Reporting Company, we are not required to provide the information
required by this item; however, our disclosure under Forward Looking Statements
above on page 11 of this report contains various risks that we are subject
to.





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





On
February 26, 2010, we issued 2.5 million shares to a consultant for services to
be rendered from March 1, 2010 to February 28, 2011.  Of this total, 2.0
million shares were restricted and 500,000 shares were free-trading pursuant
to our S-8.  The shares were valued at $0.51 per share, which was the
fair market value of our common stock on February 26, 2010.  The
expense is being recorded in selling, general and administrative over the
service period of one year.





Item
3. Defaults Upon Senior Securities





None





Item 5. Other Information





None


17


Item 6. Exhibits




Exhibit No.
            
            Title31.1
            
            Certification of
      Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.


SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.




Dated:  May
      21, 2010NUTRA
      PHARMA CORP.Registrant/s/ Rik J. DeitschRik
      J. DeitschChief
      Executive Officer/Chief Financial Officer


18