**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





(Mark
      One)





[X] 
      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year ended December 31, 2005








[ 
      ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934





For
      the
      transition period from _________ to ________





Commission
      file number 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)





**3473
      High Ridge Road, Boynton Beach, FL 33426**


(Address
      of principal executive offices)





**(954)
      509-0911**


(Issuer's
      telephone number)





**Securities
      registered under Section 12(b) of the Exchange Act:** None





**Securities
      registered under Section 12(g) of the Exchange Act:** Common
      Stock, $0.001 par value





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 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 [  ]





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. [  ]





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
      registrant's revenues for the fiscal year ended December 31, 2005 were
      $0.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of April
      18,
      2006 is $12,563,017.





As
      of
      April 18, 2006, there were 71,797,182 shares of common stock issued and
      outstanding.





Transitional
      Small Business Disclosure Format (Check one): Yes [  ] No [X]





INDEX





Part
                IItem
                1.
            Description
                of Business
            1Item
                2.
            Description
                of Property
            13Item
                3.
            Legal
                Proceedings
            14Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            14Part
                IIItem
                5.
            Market
                for Common Equity and Related Stockholder Matters
            14Item
                6.
            Management's
                Discussion and Analysis or Plan of Operation
            21Item
                7.
            Financial
                Statements
            25Item
                8.
            Changes
                in and Disagreements with Accountants and Financial
                Disclosure
            25Item
                8A.
            Controls
                and Procedures
            25Item
                8B.
            Other
                Information
            26Part
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of the Exchange Act
            26Item
                10.
            Executive
                Compensation
            29Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management
                and Related Stockholder Matters
            30Item
                12.
            Certain
                Relationships and Related Transactions
            32Item
                13.
            Exhibits
            33Item
                14.
            Principal
                Accountant Fees and Services
            34Signatures
            
            35








Forward-Looking
      Statements





This
      Annual Report on Form 10-KSB, including our "Plan of Operations" on page 21,
      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. (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." All statements other than statements
      of
      historical fact, are statements that could be deemed forward-looking statements,
      including any projections of revenue, gross margin, expenses, earnings or losses
      from operations, synergies or other financial items; any statements of the
      plans, strategies and objectives of management for future operations and; 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.





**PART
      I**


**Item
      1. Description of Business**





HOW
      WE
      ARE ORGANIZED





We
      were
      incorporated in California on February 1, 2000. We have been conducting our
      operations as a development stage company under the name, Nutra Pharma Corp.
      since October 31, 2001. We have never been the subject of a bankruptcy,
      receivership, material reclassification, merger, consolidation, or purchase
      or
      sale of a significant amount of assets not in the ordinary course of business,
      or similar such proceeding or event. As of December 31, 2005, we had 69,297,182
      shares of our common stock outstanding. As of April 18, 2006, we had 71,797,182
      shares of our common stock outstanding.





BUSINESS
      OVERVIEW





We
      are a
      biopharmaceutical company specializing in the acquisition, licensing and
      commercialization of pharmaceutical products and technologies for the management
      of neurological disorders, cancer, autoimmune and infectious diseases. Entities
      with which we are affiliated conduct basic drug discovery research and clinical
      development in connection with the following disorders and
      diseases:




o     
      Multiple Sclerosis;


o    
       HIV;


o     
      Chronic pain;


o     
      Myasthenia Gravis (Autoimmune Disease); and


o     
      AMN.





We
      currently have the following holdings, licenses, or investment:





o ReceptoPharm,
      Inc. - In February 2004, we agreed to invest $2,000,000 in cash to acquire
      up to
      a 49.5% equity interest in ReceptoPharm Inc., a privately held development
      stage
      biopharmaceutical company located in Fort Lauderdale, Florida, which is
      developing technologies for the development of drugs for Multiple Sclerosis
      ("MS") and HIV.  On February 10, 2006, we completed our $2,000,000
      investment and at that date, we owned approximately 38% of the issued and
      outstanding common stock of ReceptoPharm.  We received less than a 49.5%
      interest in ReceptoPharm because our interest was diluted as a result of
      ReceptoPharm issuing additional shares of its common stock to various
      consultants and employees in exchange for services rendered. On March 27, 2006,
      we lent ReceptoPharm $200,000 for its working capital purposes.








-1-





o
      Designer Diagnostics, Inc. (“Designer Diagnostics”) - We formed Designer
      Diagnostics in January 2006 as a Nevada corporation, at which time it became
      our
      wholly owned subsidiary. Designer Diagnostics is engaged in marketing of
      diagnostic test kits that are used for the rapid identification of infectious
      human diseases such as Tuberculosis (TB) and Mycobacterium avium-intracellulare
      (MAI). Research and development is a continuing process with our diagnostic
      test
      kits.





o
      XenaCare - We have agreed to invest up to $250,000 in 15 Site of Care
      physician’s offices with XenaCare, LLC, a healthcare management company. To
      date, we have invested $175,000. XenaCare is engaged in the business of
      manufacturing and distributing non-prescription pharmaceuticals to physicians'
      offices.





We
      will
      continue to attempt to develop therapeutic approaches to diseases that lack
      therapeutic options in the current market.





STRATEGY





Long-term
      goal - Our long-term goal is to continue research efforts based on our drug
      discovery platform and to license the resulting drugs in the field of
      neurological diseases, infectious diseases and autoimmune disorders. Due to
      our
      limited financial and operational resources, this goal will require us to
      establish strategic partners or alliances with pharmaceutical companies,
      academic institutions, biotechnology companies, and clinical diagnostic
      laboratories, which will:




·
            complement
                our research and development
                efforts;


·
            reduce
                the risks associated with our undertaking the entire drug development
                and
                marketing process; and


·
            generate
                licensing based revenue streams.





We
      will
      continue our efforts to identify and acquire intellectual property and companies
      in the biotechnology arena.





Mid
      term
      goal - Our mid term strategy is to license our AMN, MS and HIV technologies
      in
      our attempt to bring these technologies to market within the next five
      years.





OUR
      POTENTIAL REVENUE SEGMENTS





Our
      potential revenue segments are composed of the following:




·
            License
                Revenues - We will attempt to develop licensing agreements with
                pharmaceutical companies, biotechnology companies, and clinical diagnostic
                laboratories that provide for our receiving licensing fees;


·
            Drug
                Sales - Should we be successful in obtaining Federal Food and Drug
                Administration approval for any drugs that we develop, we will receive
                revenues from direct sales of our drug products, although we are
                more
                likely to develop drugs through licensing agreements with pharmaceutical
                or biotechnology companies; and


·
            Test
                Kit Sales - We are actively marketing Designer Diagnostics’ test kits to
                pharmaceutical companies, diagnostic laboratories, and hospitals,
                although
                we have not generated any sales to
                date.





MARKETING





We
      currently do not have a marketing program for our drug products. If and when
      we
      have US Food and Drug Administration approved drug treatments, we intend to
      market such treatments through pharmaceutical companies, other biotechnology
      companies, and diagnostic laboratories. Our Chief Executive Officer, Rik
      Deitsch, will market the treatments to licensing and development officers of
      those companies and will otherwise direct our marketing program. Additionally,
      we will attempt to secure consulting agreements with marketing consultants
      who
      will actively market our products to such companies and/or provide our Chief
      Executive Officer with marketing guidance. Our diagnostic test kits are being
      marketed through our wholly owned subsidiary, Designer Diagnostics, Inc., under
      Neil Roth’s direction. Roth is the President of Designer
      Diagnostics.





-2-




EMPLOYEES





As
      of
      April 18, 2006, we had 3 full time employees:




·
            Rik
                Deitsch, our President;


·
            Neil
                Roth, President of Designer Diagnostics; and


·
            Nina
                Goldstein, our Executive Administrative Assistant.





Additionally,
      on an as needed basis, we utilize the services of consultants for financial
      analysis, human resources, and due diligence in licensing or
      acquisitions.





CURRENT
      TECHNOLOGIES





ReceptoPharm,
      Inc.





ReceptoPharm
      is developing potential drugs for the treatment of MS and HIV. ReceptoPharm
      has
      three patents pending for the protection of its own proprietary technologies
      in
      these areas. Additionally, ReceptoPharm is engaged in the research and
      development of potential drugs for other viral, auto-immune and
      neuro-degenerative diseases, which are being developed based on novel, modified
      proteins that have been studied as treatments for several clinical disorders.
      ReceptoPharm’s drug product production involves a specific chemical process for
      the modification of cobratoxin or cobra venom that eliminates its poisonous
      effect. As a result of this process, the modified cobratoxin or cobra venom
      retains some of the affinities of the native toxin, but to a diminished degree.
      These drugs have successfully completed Phase I safety studies in the United
      States and Europe. ReceptoPharm is now focusing its near term drug development
      efforts on initiating a Phase II human clinical trial for its HIV drug. Phase
      II
      is meant to show preliminary efficacy in a human population and is usually
      a
      smaller trial in one or two locations. Phase III is the last step before
      potential regulatory approval and usually consists of a large, multi-center,
      multi-national trial and would provide data for proper dosage, potential side
      effects and potential contraindications. With HIV, the Phase II trial would
      most
      likely involve fewer than 50 patients and last fewer than 10 weeks. The trial
      would only need to show a reduction in viral load.





ReceptoPharm's
      Multiple Sclerosis (MS) Applications





Background
      Information Pertaining to MS





MS
      is a
      neurological disorder affecting approximately 2.0 million people globally and
      is
      believed to be an autoimmune disease in which the body's immune system damages
      primarily the central nervous system. People with MS may experience diverse
      signs and symptoms. MS symptoms may include pain, fatigue, cognitive impairment,
      tremors, loss of coordination and muscle control, loss of touch sensation,
      slurred speech and vision impairment. The course of the disease is unpredictable
      and for most MS patients, the disease initially manifests a
      "relapsing-remitting" pattern. Periods of apparent stability are punctuated
      by
      acute exacerbations that are sudden unpredictable episodes that might involve
      impaired vision, diminished ability to control a limb, loss of bladder control,
      or a great variety of other possible neurologic deficits. In relapsing-remitting
      MS, some or all of the lost function returns, however, the patient sustains
      an
      unceasing, often insidious, accumulation of neuronal damage. As the burden
      of
      neural damage grows, new lesions are more likely to produce irreversible
      impairment of function. Typically, about eight to fifteen years after onset,
      MS
      patients enter the secondary-progressive phase. Eventually, progressive MS
      sufferers become wheelchair-bound, and may become blind and even incapable
      of
      speech. There is currently no approved drug that reverses the course of the
      progressive form of MS.





-3-





ReceptoPharm's
      Proposed Drug for Treatment of MS





ReceptoPharm's
      proposed drug for the treatment of MS is derived from alpha-cobratoxin. This
      compound binds strongly to the acetylcholine receptors on the post-synaptic
      nerve. Normally, this action stops the progression of a signal through the
      nerve
      and this has the effect of slowing or paralyzing muscles - including muscles
      responsible for heart and lung function. The process used to chemically modify
      the alpha-cobratoxin weakens its binding potential. ReceptoPharm's researchers
      believe that by binding weakly to these receptors, the drug controls nerve
      function by regulating the charges distributed down the nerve pathway (much
      like
      a resistor on an electrical circuit). Early in-vitro studies conducted by
      ReceptoPharm's researchers have shown that conduction in demyelinated nerves
      is
      stabilized in the presence of the drug. In pre-clinical studies, the drug has
      been found to significantly affect the disease process of MS. It had a
      significant affect on the genes in the cytokine pathway as well as the
      myelination pathway. The cytokine pathway genes play a role in marshaling the
      attack on the nervous system by immune cells. Since this is one of the principle
      pathways that lead to the forward progression of MS, it is notable that if
      these
      results are replicated in the patient population it may greatly reduce the
      severity of the disease. Additionally, genes responsible for repair and
      maintenance of the myelin sheathes of neurons were upregulated. MS patients
      have
      a loss of myelin, the insulating material that surrounds the nerve fibers in
      the
      brain, spinal cord, and optic nerves. This damage or loss of myelin can prevent
      nerve signals from being conducted, or can cause those signals to be conducted
      too slowly. The data from this study suggests that the drug may aid the patient
      in reversing some of the damage caused to the myelin by their
      disease.





ReceptoPharm's
      HIV/AIDS Applications





Background
      Information Pertaining to HIV/AIDS





More
      than
      forty million people are infected with HIV, the virus that causes AIDS.
      Globally, an estimated 5 million people were newly infected and 3 million people
      died of AIDS in 2003. Three-quarters of those who have the disease live in
      Africa, where AIDS is now the leading cause of death. According to a recently
      published report by the financial services firm Griffin Securities, the market
      for HIV therapies is expected to triple in size by 2007, growing from $5 billion
      dollars in sales to over $13 billion in sales by 2007. Growth in the HIV therapy
      market will continue to be driven by the rapidly growing HIV and AIDS
      population. In the absence of therapeutic intervention, the vast majority of
      individuals infected with HIV will ultimately develop AIDS, on average in about
      10 years, which has a mortality rate approaching 100%. Experts say that the
      drugs currently available only extend life on average 1.8 years.





To
      cause
      infection, HIV needs to gain entry into cells through the attachment to
      receptors on the cell membrane. These receptors are called chemokine receptors.
      There are two principal types, CCR5 and CXCR4. Different HIV strains use one
      of
      these types. A single drug that would block all of the chemokine receptors
      ("tropism-independent") could be more useful, for several reasons, than a
      mixture of molecules that would have to be used to do the same.





New
      drugs
      and adjunct therapies with novel mechanisms of action or unique resistance
      profiles are needed in the fight against HIV. Constant innovation, in terms
      of
      efficacy, side effect profile and dosing are occurring. Current research and
      development for HIV is focused on adjunctive therapy, which when combined with
      existing HAART (Highly Active Anti-Retroviral Therapy) regimens reduce side
      effects, enhance the efficacy of existing treatments and delay the progression
      of the HIV virus.








-4-




ReceptoPharm's
      Treatments of HIV





Results
      from completed assays have indicated that ReceptoPharm's drug inhibited by
      over
      90%, the infection rate of two strains of HIV, one specific to the CCR5 receptor
      and the other specific for the CXCR4 receptor. Based on these results,
      ReceptoPharm intends to initiate a Phase II human trial in HIV. The early work
      in HIV will continue with further in-vitro assays to provide definitive data
      on
      the efficacy of the drug as an inhibitor of HIV fusion. These assays should
      also
      yield information on the drug's potential to cause viral mutations.





Bio-Therapeutics,
      Inc.





We
      have a
      non-exclusive license to certain intellectual property of Bio Therapeutics,
      Inc,
      which consists of the following two distinct technology platforms:





o
      Alteration of Proteins and Peptides - These include patented methods for
      altering the 3-Dimensional structure of certain proteins and peptides. The
      natural peptides bind to receptors in the body with toxic effects. This
      technology allows us to alter the structure of these peptides, preserving their
      receptor-binding characteristics, while making them non-toxic and therapeutic.
      Different receptors have various functions in many disease states. By the
      peptides binding to these receptors in a controlled fashion certain symptoms
      of
      diseases may be treated. In connection with MS, binding to the acetylcholine
      receptor on the nerves allows for more efficient nerve conduction. With HIV,
      binding to chemokine receptors may prevent the virus from entering and infecting
      new cells;





o
      Innovative aerosolized drug delivery system - Many therapeutic agents cannot
      be
      effectively delivered by aerosol formulation due to their large size and/or
      irregular shapes. Since these therapeutic agents cannot be ingested orally
      without being degraded by the digestive system, patients have no alternative
      but
      to inject these drugs directly. We have a non-exclusive license to a proprietary
      aerosol formulation, for which a patent is now pending, which greatly enhances
      the permeability of the mucous membranes found on the roof of the mouth and
      the
      back of the throat. This allows for the easy and efficient systemic delivery
      into the bloodstream of a much wider variety of proteins and peptides. This
      non-exclusive license for "Buccal Delivery System" (patent-pending) includes
      claims that identify the active mucosal enhancer, its combination with
      therapeutic agents and the mode of delivery through aerosol. This may allow
      for
      the effective and pain-free delivery of peptide and protein therapeutics for
      the
      treatment of HIV and MS.





As
      more
      fully described on page 14, during April 2005, Bio Therapeutics filed a Motion
      to Enforce a Settlement Agreement against us in the Circuit Court of Broward
      County Florida alleging breaches of a license agreement we have with Bio
      Therapeutics.





Designer
      Diagnostics, Inc.





NonTuberculosis
      Mycobacterium (NTM)





NonTuberculosis
      Mycobacterium (NTM), also known as atypical Tuberculosis (Atypical TB) or
      Mycobacterium other than Tuberculosis (MOTT) are bacteria that can be found
      in
      water, some domestic and wild animals, and soil. NTM is a primary cause of
      respiratory disease in humans and is a leading cause of death in HIV/AIDS
      patients.





-5-




The
      NTM
      bacteria usually enter the body through inhalation or by drinking water that
      has
      been contaminated by the NTM bacteria. Additionally, the NTM bacteria can enter
      the body through open wounds. These bacteria cannot be spread directly between
      people. There are over 20 different types of NTM, which include:




·
            Para-Tuberculosis


·
            Nocardia


·
            Pseudomonas


·
            MAC
                (M.avium Complex)





Tuberculosis
      (TB)





Tuberculosis
      (TB) is a contagious disease. Like the common cold, it spreads through the
      air.
      Only people who are sick with TB in their lungs are infectious. When infectious
      people cough, sneeze, talk or spit, they propel TB germs, known as bacilli,
      into
      the air. A person needs only to inhale a small number of these to be infected.
      Left untreated, each person with active TB disease will infect on average
      between 10 and 15 people every year. It is
      estimated that 1.7 million deaths resulted from TB in 2004. Strains of TB
      resistant to all major anti-TB drugs have recently emerged. A particularly
      dangerous form of drug-resistant TB is multidrug-resistant TB (MDR-TB), which
      is
      defined as the disease caused by TB bacilli resistant to at least isoniazid
      and
      rifampicin, the two most powerful anti-TB drugs. Rates of MDR-TB are high in
      some countries, especially in the former Soviet Union, and threaten TB control
      efforts.





Designer
      Diagnostics’ kits allow for the early detection of the disease, which may lead
      to treatment of the patient before dangerous (often fatal) symptoms appear.
      The
      kits can also be used for antibiotic sensitivity testing which allows the
      treating physician to create a customized treatment protocol for the patient
      and
      bypasses any issues with multi-drug resistant strains of the bacteria. This
      antibiotic testing can also be used by Biotech and Pharmaceutical companies
      to
      test new drugs in the treatment of emerging strains of bacteria that are known
      to be drug resistant.




On
      January 24, 2006, we entered into an Agreement with NanoLogix whereby we
      exchanged our entire holding of NanoLogix common stock for the intellectual
      property pertaining to the manufacture of test kits for the rapid isolation,
      detection and antibiotic sensitivity testing of certain microbacteria. We then
      placed that intellectual property into our wholly owned subsidiary, Designer
      Diagnostics. Designer Diagnostics owns 11 issued patents and has licensing
      rights to 18 issued patents related to the rapid isolation, growth,
      identification and antibiotic sensitivity of disease causing pathogens such
      as
      Tuberculosis ("TB") and Mycobacterium avium-intracellulare ("MAI"). The patented
      technologies are related to a technique known as "paraffin baiting". The
      researchers discovered that certain grades of paraffin wax, when used in
      conjunction with a microscope slide, and combined with a nutrient broth,
      provides for the rapid isolation, growth and identification of various disease
      causing pathogens. Designer Diagnostics markets a diagnostic test kit based
      on
      this technology. They are currently establishing licensing and distribution
      arrangements with large, well-established medical diagnostic companies. Designer
      Diagnostics markets will potentially include hospitals, clinical laboratories,
      medical research institutions, medical schools, physician's offices, and even
      pharmaceutical companies, as the antibiotic sensitivity testing methodology
      may
      be useful in creating new drugs to treat paraffinophilic microorganisms.
      Designer Diagnostics is currently working with third-party researchers in
      academia to provide a current validation of their technology for submission
      to
      the FDA.





-6-





GOVERNMENT
      REGULATION





The
      production and marketing of potential drug products as well as research and
      development activities generally are subject to regulation by numerous
      governmental authorities in the United States and other countries. In the United
      States, vaccines, drugs and certain diagnostic products are subject to Food
      an d
      Drug Administration ("FDA") review of safety and efficacy. The Federal Food,
      Drug and Cosmetic Act, the Public Health Service Act and other federal statutes
      and regulations govern or influence the testing, manufacture, safety, labeling,
      storage, record keeping, approval, advertising and promotion of such products.
      Noncompliance with applicable requirements can result in criminal prosecution
      and fines, recall or seizure of products, total or partial suspension of
      production, or refusal of the government to approve Biological License
      Applications ("BLAs"), Product License Applications ("PLAs"), New Drug
      Applications ("NDAs") or refusal to allow a company to enter into supply
      contracts. The FDA also has the authority to revoke product licenses and
      establishment licenses previously granted.





In
      order
      to obtain FDA approval to market a new biological or pharmaceutical product,
      proof of product safety, purity, potency and efficacy, and reliable
      manufacturing capability must be submitted. This requires companies to conduct
      extensive laboratory, preclinical and clinical tests. This testing, as well
      as
      preparation and processing of necessary applications, is expensive,
      time-consuming and often takes several years to complete. There is no assurance
      that the FDA will act favorably in making such reviews. Our partners or we
      may
      encounter significant difficulties or costs in their efforts to obtain FDA
      approvals, which could delay or preclude from marketing any products that may
      be
      developed. The FDA may also require post-marketing testing and surveillance
      to
      monitor the effects of marketed products or place conditions on any approvals
      that could restrict the commercial applications of such products. Product
      approvals may be withdrawn if problems occur following initial marketing, such
      as, compliance with regulatory standards is not maintained. Delays imposed
      by
      governmental marketing approval processes may materially reduce the period
      during which a company will have the exclusive right to exploit patented
      products or technologies. Refusals or delays in the regulatory process in one
      country may make it more difficult and time consuming to obtain marketing
      approvals in other countries.





The
      FDA
      approval process for a new biological or pharmaceutical drug involves completion
      of preclinical studies and the submission of the results of these studies to
      the
      FDA in an Initial New Drug application, which must be approved before human
      clinical trials may be conducted. The results of preclinical and clinical
      studies on biological or pharmaceutical drugs are submitted to the FDA in the
      form of a BLA, PLA or NDA for product approval to commence commercial sales.
      In
      responding to a BLA, PLA or NDA, the FDA may require additional testing or
      information, or may deny the application. In addition to obtaining FDA approval
      for each biological or chemical product, an Establishment License Application
      ("ELA") must be filed and the FDA must inspect and license the manufacturing
      facilities for each product. Product sales may commence only when both BLA/
      PLA/
      NDA and ELA are approved. In certain instances in which a treatment for a rare
      disease or condition is concerned, the manufacturer may request the FDA to
      grant
      the drug product Orphan Drug status for a particular use. "Orphan" status refers
      to serious ailments affecting less than 250,000 individuals. In this event,
      the
      developer of the drug may request grants from the government to defray the
      costs
      of certain expenses related to the clinical testing of such drug and be entitled
      to marketing exclusivity and certain tax credits.





In
      order
      to gain broad acceptance in the marketplace of a medical device, our partners
      or
      we will need to receive approval from the FDA and other equivalent regulatory
      bodies outside of the United States. This approval will be based upon clinical
      testing programs at major medical centers. Data obtained from these institutions
      will enable us, or our partners, to apply to the FDA for acceptance of its
      technology as a "device" through a 510(k) application or exemption process.
      Once
      the data has been fully gleaned, it is expected that this process would take
      less than ninety days.





-7-





According
      to the FDA, a "device" is: "an instrument, apparatus, implement, machine,
      contrivance, implant, in vitro reagent, or other similar or related article,
      including a component part, or accessory which is recognized in the official
      National Formulary, or the United States Pharmacopoeia, or any supplement to
      them, intended for use in the diagnosis of disease or other conditions, or
      in
      the cure, mitigation, treatment, or prevention of disease, in man or other
      animals, or intended to affect the structure or any function of the body of
      man
      or other animals, and which does not achieve any of it's primary intended
      purposes through chemical action within or on the body of man or other animals
      and which is not dependent upon being metabolized for the achievement of any
      of
      its primary intended purposes."





The
      FDA
      classifies devices as either Class I/II-exempt, Class II, or Class
      III.





Class
      III: Pre-Marketing Approval, or PMA: A Pre-Marketing Approval or PMA is the
      most
      stringent type of device marketing application required by FDA. A PMA is an
      application submitted to FDA to request clearance to market, or to continue
      marketing of a Class III medical device. A PMA is usually required for products
      with which FDA has little previous experience and in such cases where the safety
      and efficacy must be fully demonstrated on the product. The level of
      documentation is more extensive than for a 510(k) application and the review
      timeline is usually longer. Under this level of FDA approval, the manufacturing
      facility will be inspected as well as the clinical sites where the clinical
      trials are being or have been conducted. All the appropriate documents have
      to
      be compiled and available on demand by the FDA. The manufacturing facility
      is
      registered with the FDA and the product or device is registered with the
      FDA.





Class
      II:
      510(k). This is one level down from the PMA and it is applied to devices with
      which the FDA has had previous experience. A 510(k) is a pre-marketing
      submission made to FDA to demonstrate that the device to be marketed is as
      safe
      and effective, that is, substantially equivalent, to a legally marketed device
      that is not subject to pre-market approval. Applicants must compare their 510(k)
      device to one or more similar devices currently on the U.S. market and make
      and
      support their substantial equivalency claims. The legally marketed device to
      which equivalence is drawn is known as the "predicate" device. Applicants must
      submit descriptive data and, when necessary, performance data to establish
      that
      their device is SE to a predicate device. Again, the data in a 510(k) is to
      show
      comparability, that is, substantial equivalency (SE) of a new device to a
      predicate device. Under this level of approval, the manufacturing facility
      is
      registered with the FDA and the product or device is registered with the FDA.
      Inspections under this classification are possible. All the appropriate cGMP
      and
      clinical data backing the claims made must be on file and available on demand
      by
      the FDA.





Class
      I/II Exemption: This is the lowest level of scrutiny. Most Class I devices
      and a
      few Class II devices are exempt from the pre-marketing notification requirements
      subject to the limitations on exemptions. However, these devices are not exempt
      from other general controls. All medical devices must be manufactured under
      a
      quality assurance program, be suitable for the intended use, be adequately
      packaged and properly labeled, and have establishment registration and device
      listing forms on file with the FDA. However, as described above, all the
      appropriate documentation including cGMP and clinical data supporting the claims
      being made has to be on hand and available on demand by the FDA. The data must
      be available to support all the product claims.





Sales
      of
      biological and pharmaceutical products and medical devices outside the United
      States are subject to foreign regulatory requirements that vary widely from
      country to country. Whether or not FDA approval has been obtained, approval
      of a
      product or a device by a comparable regulatory authority of a foreign country
      must generally be obtained prior to the commencement of marketing in that
      country.





-8-




Designer
      Diagnostics is also subject to regulation by the Occupational Safety and Health
      Administration ("OSHA") and the Environmental Protection Agency ("EPA") and
      to
      regulation under the Toxic Substances Control Act, the Resource Conservation
      and
      Recovery Act and other regulatory statutes, and may in the future be subject
      to
      other federal, state or local regulations. Designer Diagnostics believes that
      they are in compliance with regulations regarding the disposal of its
      biological, radioactive and chemical waste. Designer Diagnostics voluntarily
      complies with NIH guidelines regarding research involving recombinant DNA
      molecules. Such guidelines, among other things, restrict or prohibit certain
      recombinant DNA experiments and establish levels of biological and physical
      containment that must be met for various types of research.





PRODUCT
      LIABILITY





The
      design, development, and manufacture of drug products or diagnostic tests
      involve an inherent risk of product liability claims and corresponding damage
      to
      our brand name reputation, including claims of product failure or harm caused
      by
      the drug product. ReceptoPharm has product liability insurance for purpose
      of
      manufacturing the drugs currently under clinical trials. Designer Diagnostics
      has product liability insurance for its portfolio of test kits. Product
      liability claims may result in significant legal costs related to our defense
      of
      such actions and/or damage amounts exceeding our product liability insurance
      coverage.





RESEARCH
      AND DEVELOPMENT





During
      2004, we spent $1,104,968 on research and development activities. During 2005,
      we spent $224,349 on research and development activities.





COSTS
      ASSOCIATED WITH ENVIRONMENTAL COMPLIANCE





We
      have
      no present or anticipated direct future costs associated with environmental
      compliance, since we are not and will not be directly involved in manufacturing
      drug products as result of our research and development; however, we may be
      affected in the percentage licensing fees we receive, since a company may
      consider the environmental expense as an offset to a determination of the
      percentage amount we receive. ReceptoPharm produces a drug that has limited
      waste issues and related costs, but handles environmentally related matters
      through the FDA's Good Manufacturing Practices, the FDA mandated guidelines
      pertaining to the production of drugs in the United States.





SOURCES
      AND AVAILABILITY OF RAW MATERIALS





ReceptoPharm
      uses the raw material, cobra venom, which is the main ingredient for the drugs
      being studied by ReceptoPharm. Apart from that, we do not currently use raw
      materials in our business.





CUSTOMER
      DEPENDENCY





Our
      potential customers consist of men and women using the drugs that are developed
      through relationships with pharmaceutical and other companies; as such, we
      do
      not plan on being dependent upon one single customer or just a few customers.
      Nonetheless, one of our revenue segment models seeks to develop licensing fees
      with pharmaceutical companies; should we be successful in securing such a
      licensing agreement, the termination of that agreement may negatively affect
      our
      ability to generate revenues.





PATENTS
      AND INTELLECTUAL PROPERTY





We
      seek
      patent and other intellectual property rights to protect and preserve our
      proprietary technology and our right to capitalize on the results of our
      research and development activities. We also rely on trade secrets, know-how,
      continuing technological innovations and licensing opportunities to develop
      new
      products.





-9-





Bio
      Therapeutics Patents





We
      hold a
      license to certain intellectual property from Bio Therapeutics. These patents
      include:





-
            U.S.
                Patent No. 5,989,857, which was granted in November 1999 with 10
                claims.





-
            U.S.
                Patent No. 6,670,148, which was granted in December 2003, with 9
                claims.
                The
                patent further describes the method for preparing a bioactive peptide(protein)
                found in cobra venom, in a stable, inactivated form, by treating
                thepeptide
                with ozone.





-
            Buccal
                Delivery System, on which a patent is pending. This application describes
                a throat spray that permits efficient delivery of the modifiedpeptide
                drugs to the body through oral
                mucosa.





-
            Technology
                contained in one pending U.S. patent application for the further
development
                of bioactive peptides in cobra venom for use in the treatment ofHIV
                and MS.





-
            Technology
                contained in two pending U.S. patent applications for Immunokine
Composition
                and Method, which describes a method for developing modifiedpeptides
                from alpha-cobratoxin.





-
            Technology
                contained in two patents pending for the topical delivery of our
proprietary
                wound healing treatment, which was developed in conjunction withBio
                Therapeutics. One of these products is in the form of  an ointment
                styleskin
                protectant and the other a foaming
                aerosol.





Designer
      Diagnostics Patents





We
      own 11
      issued U.S. patents and have licensing rights to 18 issued U.S. patents covering
      technologies related to growing, detecting, identifying, defining antibiotic
      sensitivity and designing apparatus for the detection of 32 different
      paraffin-eating microorganisms.





Owned
      Patents





U.S.
                Patent Nos.
            Description#5,989,902
            Method
                for determining the antimicrobial agent sensitivity of a
                nonparaffinophilic hydrophobic microorganism and an associated apparatus#5,981,210
            Method
                for determining a presence or absence of a nonparaffinophilic hydrophobic
                microorganism in a body specimen by using a DNA extraction procedure
                and a
                novel DNA extraction procedure#5,935,806
            Method
                and apparatus for speciating and identifying MAI (Mycobacterium Avium
                Intracellulare) and testing the same for antibiotic sensitivity#5,882,920
            Apparatus
                for determining the presence or absence of a paraffinophilic microorganism#5,854,014
            Apparatus
                for testing paraffinophilic microorganisms for antimicrobial sensitivity#5,846,760
            Method
                for determining a presence or absence of a nonparaffinophilic hydrophobic
                microorganism in a body specimen and an associated
                kit




-10-


#5,776,722
            Method
                of testing a body specimen taken from a patient for the presence
                or
                absence of a microorganism a further associated method and associated
                apparatus#5,569,592
            Apparatus
                for testing MAI (Mycobacterium Avium Intracellulare) for antimicrobial
                agent sensitivity#5,472,877
            Apparatus
                for determining the presence or absence of MAI (Mycobacterium Avium
                Intracellulare)#5,316,918
            Method
                and apparatus for testing MAI (Mycobacterium Avium Intracellulare)
                for
                antimicrobial agent sensitivity#5,153,119
            Method
                for speciating and identifying MAI (Mycobacterium Avium
                Intracellulare)Licensed
                PatentsU.S.
                Patent Nos.
            Description#5,962,306
            Method
                of determining the presence or absence of a nonparaffinophilic
                microorganism in a specimen and an associated apparatus#5,891,662
            Method
                for determining the antimicrobial agent sensitivity of a
                nonparaffinophilic hydrophobic microorganism#5,882,919
            Apparatus
                for determining the presence or absence of a nonparaffinophilic
                microorganism in a specimen#5,854,013
            Method
                of determining presence or absence of a nonparaffinophilic microorganism
                in a specimen#5,804,406
            Determining
                sensitivity of paraffinophilic microorganisms to
                antimicrobials#5,801,009
            Method
                for determining the antimicrobial sensitivity of a paraffinophilic
                microorganism using various milieus and an associated
                apparatus#5,750,363
            Method
                for determining the antibiotic agent sensitivity of a nonparaffinophilic
                microorganism and an associated apparatus#5,726,030
            Method
                for automatically testing the antibiotic sensitivity of a
                nonparaffinophilic microorganism#5,721,112
            Method
                of determining the presence or absence of a nonparaffinophilic
                microorganism in a specimen and an associated apparatus#5,707,824
            Method
                of determining the presence or absence of a paraffinophilic
                microorganism#5,698,414
            Method
                and apparatus for testing paraffinophilic microorganisms for antimicrobial
                agent sensitivity#5,677,169
            Method
                for determining the antimicrobial agent sensitivity of a
                nonparaffinophilic microorganism and an associated
                apparatus#5,668,010
            Method
                for determining the antimicrobial agent sensitivity of a
                nonparaffinophilic microorganism using various milieus and an associated
                apparatus





-11-





#5,663,056
            Method
                for determining the antimicrobial agent sensitivity of a
                nonparaffinophilic microorganism and an associated
                apparatus#5,654,194
            Method
                of identifying a nonparaffinophilic microrganism using various milieus
                and
                an associated apparatus#5,641,645
            Method
                for determining the antimicrobial agent sensitivity of a
                nonparaffinophilic microrganism using various milieus and an associated
                apparatus#5,639,675
            Method
                of identifying a nonparaffinophilic microorganism using various mileus
                and
                an associated apparatus#5,637,501
            Apparatus
                for automatically testing the antibiotic sensitivity of a paraffinophilic
                microorganism





Our
      business is dependent upon our ability to protect our proprietary technologies
      and processes. Despite our efforts to protect our proprietary rights,
      unauthorized parties may attempt to obtain and use proprietary information.
      We
      will rely on patent and trade secret law and nondisclosure and other contractual
      arrangements to protect such proprietary information. We will file patent
      applications for our proprietary methods and devices for patient treatments.
      Our
      efforts to protect our proprietary technologies and processes are subject to
      significant risks, including that others may independently develop equivalent
      proprietary information and techniques, gain access to our proprietary
      information, our proprietary information being improperly disclosed, or that
      we
      may ineffectively protect our rights to unpatented trade secrets or other
      proprietary information.





COMPETITION





The
      biotechnology research and development field is extremely competitive and is
      characterized by rapid change. Our competitors have substantially greater
      financial, scientific, and human resources, and as a result greater research
      and
      product development capabilities. Our competitors have competitive advantages
      with greater potential to develop revenue streams. Our competitors are located
      in the United States as well as around the world.





ReceptoPharm
      and Designer Diagnostics will compete with many new and emerging companies
      as
      well as established pharmaceutical companies, all of which have superior
      financial resources than we do.





Currently,
      there are 19 AIDS drugs on the market, falling into four general classes:
      Nucleoside Reverse Transcriptase Inhibitors (NRTIs), Protease Inhibitors (PIs),
      Entry Inhibitors (EIs); and Non-Nucleoside Reverse Transcriptase Inhibitors
      (nNRTIs). These drugs are usually used in combinations of three or more to
      create an effective antiviral therapy. In addition, almost 100 investigational
      new drug applications (INDs) have been submitted to the U.S. Food and Drug
      Administration to conduct clinical trials on HIV candidates.





Leadership
      in entry inhibitors include: Roche/Trimeris' fusion inhibitor T-20, Progenics
      Pharmaceuticals' CD4 receptor blocker, PRO-542, and Aethlon Medical's
      extracorporeal entry inhibitor, the HIV-Hemopurifier. These products will be
      used in addition to, rather than instead of existing regimens, and should serve
      to expand the overall market.





The
      only
      current competitive agent to ReceptoPharm's proposed HIV drug is Trimeris'
      drug,
      T-20 (Fuzeon). This is an entry inhibitor that has recently been approved by
      the
      FDA. The cost of Fuzeon to the patient is roughly $20,000 per year. Because
      of
      production constraints, the drug will be available to no more than 15,000
      persons worldwide during the next 12 months. Fuzeon must be administered by
      subcutaneous injection twice daily. Fuzeon is also known to naturally select
      for
      viral mutations, leading patients to grow resistant to the drug.





-12-





The
      pharmaceutical market for MS therapy is currently dominated by interferon-based
      drugs - Tysabri from BIogen-Idec and Elan, Avonex(R) from Biogen-Idec,
      Betaseron(R) from Berlex Laboratories and Schering, and Rebif(R)from Serono
      and
      Pfizer. The only other major market brand is Copaxone(R) (glatiramer acetate)
      from Teva and Aventis.





The
      only
      competing products to Designer Diagnsotics’ test kits are the conventional solid
      media, such as Lowenstein Jensen, and Middlebrook Media. These media are not
      capable of distinguishing between TB and Non-TB media, have a short shelf life
      and require extensive pre-preparation. In addition, these media require
      refrigeration.





Purchase
      and Licensing of NanoLogix Patents





On
      January 24, 2006 we entered into an Agreement with NanoLogix whereby we
      exchanged our entire holding of NanoLogix common stock for intellectual property
      pertaining to the manufacture of test kits for the rapid isolation, detection
      and antibiotic sensitivity testing of certain microbacteria. The agreement
      provides that: (a) NanoLogix has reassigned to us 11 key patents protecting
      the
      diagnostics test kit technology in exchange for our entire holding of NanoLogix
      stock represented by 4,556,174 shares of that stock; (b) NanoLogix has licensed
      to us the remaining 18 patents that protect the diagnostics test kit technology
      in exchange for a 6% royalty on the gross sales of the products based on the
      licensed technology; (c) we issued to NanoLogix 1 million options of our
      restricted common stock at $.20 per share; and (d) we will allow NanoLogix
      to
      continue their use of these patents for development of their hydrogen technology
      and other technologies unrelated to medical diagnostic test kits.





REPORTS
      TO SECURITY HOLDERS





We
      are
      subject to the informational requirements of the Securities Exchange Act of
      1934. Accordingly, we file annual, quarterly and other reports and information
      with the Securities and Exchange Commission. You may read and copy these reports
      in Washington, D.C. Our filings are also available to the public from commercial
      document retrieval services and the Internet world wide website maintained
      by
      the Securities and Exchange Commission at www.sec.gov.





**Item
      2.     Description of Property**





Our
      March
      2004 verbal lease agreement between Stan Cherelstein, on Waiora, Inc.’s behalf
      as its President and Rik Deitsch, as our President and out behalf, provides
      for
      our use 800 square feet of Waiora’s lease of office space at 3473 High Ridge
      Road, Boynton Beach, Florida. We make no cash payment for the use of this space;
      instead, we are permitted to use such space in return for our President serving
      as Waiora’s Chairman of its Scientific Advisory Board. The lease further
      provides that: (a) there is no expiration date to this agreement, but Waiora,
      Inc may terminate the lease at any time. Waiora's lease term expires April
      2007;
      (b) 800 square feet of office space is allotted specifically to us; (b) Waiora
      provides us with access to a conference room, office equipment, and a T-1
      Internet connection; and (c) Stan Cherelstein serves as one of our Directors
      and
      is Chair of our Audit and Compensation Committees. Our offices are in good
      condition and are sufficient to conduct our operations.





-13-




**Item
      3.    Legal Proceedings**




On
      April
      4, 2005, a Motion to Enforce Settlement Agreement was filed against us in the
      Circuit Court of Broward County Florida by Bio Therapeutics, Inc. f/k/a Phylomed
      Corp. in Nutra Pharma Corp. v. Bio Therapeutics, Inc. (17th Judicial Circuit,
      Case No. 03-008928 (03)). This proceeding results from our alleged breach of
      a
      settlement agreement that was entered into between Bio Therapeutics and us
      in
      resolution of a previous lawsuit between us and Bio Therapeutics that was
      resolved by entering into a Settlement Agreement. We also entered into a related
      License Agreement and Amendment to the License Agreement ("License Agreement")
      with Bio Therapeutics.




In
      the
      April 4, 2005 motion, Bio Therapeutics alleges that we breached certain
      provisions of the License Agreement and requests that the Court grant its motion
      to enforce the Settlement Agreement by declaring the License Agreement
      terminated, enjoining us from further use of license products that was granted
      to us by the License Agreement, and awarding attorneys fees and costs to Bio
      Therapeutics. We intend to defend against this action. We do not believe that
      this action will have a material effect upon our operations and financial
      condition.







**Item
      4.    Submission of Matters to a Vote of Security
      Holders**





There
      were no matters submitted to a vote of security holders in 2005.





**PART
      II**




**Item
      5.    Market for Common Equity and Related Stockholder
      Matters**





Our
      common stock is quoted on the over-the-counter bulletin board under the trading
      symbol "NPHC." The following table sets forth the high and low bid prices for
      each quarter within the last two fiscal years.




2004
            2005High
                Bid
            Low
                Bid
            High
                Bid
            Low
                BidFirst
                Quarter
            0.76
            0.45
            0.40
            0.25Second
                Quarter
            0.77
            0.36
            0.40
            0.27Third
                Quarter
            0.43
            0.22
            0.35
            0.25Fourth
                Quarter
            0.60
            0.21
            0.28
            0.13





The
      above
      quotations reflect inter-dealer prices, without retail mark-up, markdown or
      commission and may not represent actual transactions.





PENNY
      STOCK CONSIDERATIONS





Our
      shares of common stock are "penny stocks" as that term is generally defined
      in
      the Securities Exchange Act of 1934 as equity securities with a price of less
      than $5.00. Our shares are subject to rules that impose sales practice and
      disclosure requirements on broker-dealers who engage in certain transactions
      involving a penny stock.





Under
      the
      penny stock regulations, a broker-dealer selling a penny stock to anyone other
      than an established customer or "accredited investor" must make a special
      suitability determination regarding the purchaser and must receive the
      purchaser's written consent to the transaction prior to the sale, unless the
      broker-dealer is otherwise exempt. Generally, an individual with a net worth
      in
      excess of $1,000,000 or annual income exceeding $200,000 individually or
      $300,000 together with his or her spouse is considered an accredited
      investor.








-14-





In
      addition, under the penny stock regulations the broker-dealer is required
      to:





o
            Deliver,
                prior to any transaction involving a penny stock, adisclosure
                schedule prepared by the Securities and Exchange Commission relating
                to the penny stock market, unless the broker-dealer or the transaction
                is otherwise exempt;





o
            Disclose
                commission payable to the broker-dealer and its registeredrepresentatives
                and current bid and offer quotations for thesecurities;





o
            Send
                monthly statements disclosing recent price information pertainingto
                the penny stock held in a customer's account, the account's valueand
                information regarding the limited market in penny stocks;
                and





o
            Make
                a special written determination that the penny stock is asuitable
                investment for the purchaser and receive the purchaser's written
                agreement
                to the transaction, prior to conducting any penny stock
                transaction in the customer's
                account.




Because
      of these regulations, broker-dealers may encounter difficulties in their attempt
      to sell shares of our common stock, which may affect the ability of shareholders
      to sell their shares in the secondary market and have the effect of reducing
      the
      level of trading activity in the secondary market. These additional sales
      practice and disclosure requirements could impede the sale of our securities.
      In
      addition, the liquidity for our securities may be adversely affected, with
      a
      corresponding decrease in the price of our securities. Our shares are subject
      to
      such penny stock rules and our shareholders will, in all likelihood, find it
      difficult to sell their securities.





HOLDERS





At
      December 31, 2005, based upon records obtained from our transfer agent, there
      were 254 holders of record of our common stock. Our transfer agent records
      do
      not account for other holders of our common stock that are held in street name
      or by broker dealers as custodian for individual holders of our stock. We have
      one class of common stock outstanding.





DIVIDENDS





We
      have
      not declared any cash dividends on our common stock since our inception and
      do
      not anticipate paying such dividends in the foreseeable future. We plan to
      retain any future earnings for use in our business. Any decisions as to future
      payment of dividends will depend on our earnings and financial position and
      such
      other factors as the Board of Directors deems relevant.





SECURITIES
      AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS





Equity
      Compensation Plan Information





On
      December 3, 2003, our Board of Directors approved the Employee/Consultant Stock
      Compensation Plan (the "Plan"). The Plan was not submitted to our shareholders
      for approval. The purpose of the Plan is to further our growth by allowing
      us to
      compensate employees and consultants who have provided bona fide services to
      us
      through the award of our common stock. The maximum number of shares of common
      stock that may be issued under the Plan is 2,500,000.





Our
      board
      of directors is responsible for the administration of the Plan and has full
      authority to grant awards under the Plan. Awards may take the form of stock
      grants, options or warrants to purchase common stock. Our Board of Directors
      has
      the authority to determine; (a) the employees and consultants that will receive
      awards under the Plan, (b) the number of shares, options or warrants to be
      granted to each employee or consultant, (c) the exercise price, term and vesting
      periods, if any, in connection with an option grant, and (d) the purchase price
      and vesting period, if any, in connection with the granting of a warrant to
      purchase shares of our common stock.




-15-


On
      December 9, 2003, we filed a Registration Statement on Form S-8 with the
      Securities and Exchange Commission that covered the issuance of up to 2,500,000
      shares of common stock under the Plan. As of December 31, 2003, we had issued
      a
      total of 15,000 shares under the Plan. These shares were issued to a consultant
      for services rendered during 2003. During 2004, we issued an additional
      2,480,000 shares to consultants for services rendered.





The
      following table summarizes our equity compensation plan information as of
      December 31, 2005.




Number
                  of
              
              Weighted
              
              Number
                  ofSecurities
                  to
              
              average
              
              securitiesbe
                  issued upon
              
              exercise
                  price
              
              remainingexercise
                  of
              
              of
                  outstanding
              
              availableoutstanding
              
              options,
              
              foroptions,
                  warrants
              
              warrants
              
              futurePlan
                    Category
              
              and
                  rights
              
              and
                  rights
              
              issuanceEquity
                  compensationplans
                  approved by
              
              N/A
              
              N/A
              
              N/Asecurity
                  holdersEquity
                  compensationplans
                  notapproved
                  bysecurity
                  holders
              
              -0-
              
              N/A
              
              5,000Total
              
              -0-
              
              N/A
              
              5,000





RECENT
      SALES OF UNREGISTERED SECURITIES





During
      2005, as specifically described below, we sold and/or issued shares of our
      restricted common stock for cash, services rendered, and in connection with
      the
      settlement of debt. We relied upon Sections 4(2) and 4(6) of the Securities
      Act
      of 1933, as amended ("the Securities Act") for the offer and sale of these
      shares. We believed Section 4(2) was available because:





·
            There
                was no general solicitation or general advertising involved in the
                offer
                or sale;


·
            All
                purchasers were accredited investors;


·
            We
                placed restrictive legends on the certificates representing these
                securities issued to the accredited investors stating that the securities
                were not registered under the Securities Act and are subject to
                restrictions on their transferability and resale; and


·
            The
                offer and sale did not involve a public
                offering.





On
      January 5, 2005, we sold 30,000 shares of our restricted common stock to an
      accredited investor at $0.17 per share or an aggregate of $5,100.





On
      January 12, 2005, we sold 60,000 shares of our restricted common stock to an
      accredited investor at $0.17 per share or an aggregate of $10,200.





-16-





On
      January 26, 2005, we issued 500,000 shares of our restricted common stock to
      Dr.
      Tanvir Khandaker in connection his appointment to our Board of Directors. These
      shares were valued at $0.40 per share or an aggregate of $200,000, which was
      equal to the market value of our common stock on the date of grant.





On
      February 1, 2005, we sold 411,765 shares of our restricted common stock to
      an
      accredited investor at $0.17 per share or an aggregate of $70,000.





On
      February 28, 2005, we issued 100,000 shares of our restricted common stock
      to a
      consultant in exchange for services rendered. These shares were valued at $0.34
      per share or an aggregate of $34,000, which was equal to the market value of
      our
      common stock on the date of grant.





On
      March
      4, 2005, we sold 147,059 shares of our restricted common stock to an accredited
      investor at $0.17 per share or an aggregate of $25,000.





On
      March
      17, 2005, we sold 58,823 shares of our restricted common stock to an accredited
      investor at $0.17 per share or an aggregate of $10,000.





On
      March
      24, 2005, we sold 82,353 shares of our restricted common stock to an accredited
      investor at $0.17 per share or an aggregate of $14,000.





On
      April
      1, 2005, we sold 30,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $6,000.





On
      April
      1, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      1, 2005, we sold 80,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $16,000.





On
      April
      4, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      4, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      4, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      4, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      5, 2005, we sold 100,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $20,000.





On
      April
      5, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      6, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      6, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      6, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      6, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      6, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





-17-




On
      April
      6, 2005, we sold 35,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $7,500.





On
      April
      7, 2005, we sold 100,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $20,000.





On
      April
      7, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      11, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      11, 2005, we sold 80,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $16,000.





On
      April
      12, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      14, 2005, we sold 200,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $40,000.





On
      April
      14, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at$0.20 per share or an aggregate of $10,000.





On
      April
      14, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at$0.20 per share or an aggregate of $5,000.





On
      April
      15, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      18, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      18, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      19, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      20, 2005, we sold 100,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $20,000.





On
      April
      20, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      20, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      21, 2005, we sold 100,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $20,000.





On
      April
      21, 2005, we sold 52,500 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,500.





On
      April
      21, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      26, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      April
      27, 2005, we sold 1,260,000 shares of our restricted common stock to an
      accredited investor at $0.20 per share or an aggregate of $252,000.





-18-





On
      April
      29, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      29, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      April
      29, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      May
      13, 2005, we issued 66,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.31 per share
      or an aggregate of $20,460, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      13, 2005, we issued 3,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.31 per share
      or an aggregate of $930, which was equal to the market value of our common
      stock
      on the date of grant.





On
      May
      23, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      May
      24, 2005, we sold 205,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $41,000.





On
      May
      26, 2005, we issued 5,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.37 per share
      or an aggregate of $1,850, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      26, 2005, we issued 20,500 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.37 per share
      or an aggregate of $7,585, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      26, 2005, we issued 15,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.37 per share
      or an aggregate of $5,550, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      26, 2005, we issued 10,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.37 per share
      or an aggregate of $3,700, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      26, 2005 we issued 10,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.37 per share
      or an aggregate of $3,700, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      26, 2005, we issued 125,000 shares of our restricted common stock to a
      consultant in exchange for services rendered. These shares were valued at $0.37
      per share or an aggregate of $46,250, which was equal to the market value of
      our
      common stock on the date of grant.





On
      May
      27, 2005, we issued 450,000 shares of our restricted common stock to a
      consultant in exchange for services rendered. These shares were valued at $0.35
      per share or an aggregate of $157,500, which was equal to the market value
      of
      our common stock on the date of grant.





On
      May
      27, 2005, we issued 350,000 shares of our restricted common stock to a
      consultant in exchange for services rendered. These shares were valued at $0.35
      per share or an aggregate of $122,500, which was equal to the market value
      of
      our common stock on the date of grant.





-19-


On
      May
      27, 2005, we issued 42,000 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.35 per share
      or an aggregate of $14,875, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      31, 2005, we issued 20,050 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.36 per share
      or an aggregate of $7218, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      31, 2005, we issued 250 shares of our restricted common stock to a consultant
      in
      exchange for services rendered. These shares were valued at $0.36 per share
      or
      an aggregate of $90, which was equal to the market value of our common stock
      on
      the date of grant.





On
      May
      31, 2005, we issued 20,200 shares of our restricted common stock to a consultant
      in exchange for services rendered. These shares were valued at $0.36 per share
      or an aggregate of $7,272, which was equal to the market value of our common
      stock on the date of grant.





On
      May
      31, 2005, we issued 150,000 shares of our restricted common stock to a
      consultant in exchange for services rendered. These shares were valued at $0.36
      per share or an aggregate of an aggregate of $54,000, which was equal to the
      market value of our common stock on the date of grant.





On
      June
      2, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $5,000.





On
      June
      14, 2005, we sold 110,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $22,000.





On
      August
      1, 2005, we sold 50,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $10,000.





On
      August
      9, 2005, we sold 100,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $20,000.





On
      August
      9, 2005, we sold 25,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of$5,000.





On
      August
      10, 2005, we sold 150,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $30,000.





On
      August
      12, 2005, we sold 250,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $50,000.





On
      August
      17, 2005, we sold 275,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $55,000.





On
      August
      23, 2005, we sold 500,000 shares of our restricted common stock to an accredited
      investor at $0.20 per share or an aggregate of $100,000.





On
      September 16, 2005, we issued 120,000 shares of our restricted common stock
      to a
      consultant in exchange for services rendered. These shares were valued at $0.26
      per share or an aggregate of $31,200, which was equal to the market value of
      our
      common stock on the date of grant.





On
      October 3, 2005, we sold 100,000 shares of our restricted common stock to an
      accredited investor at $0.20 per share or an aggregate of$20,000.





-20-





On
      November 2, 2005, we sold 50,000 shares of our restricted common stock to an
      accredited investor at $0.20 per share or an aggregate of $10,000.





In
      addition to the above described sales and issuances, in November 2004, in
      accordance with the terms of completed Subscription Agreements, we received
      total proceeds of $206,750 from four (4) investors. These agreements
      provided that upon the expiration of a 6 month term from the date of
      execution, each of the four investors had the option of: (a) being repaid
      the amount of their investment together with 15% interest per annum; (b)
      converting their investment into shares of the Company’s common stock at a
      conversion price of $0.17 per share up to an aggregate of 1,216,176 shares,
      if
      all four investors convert; or (c) converting their investment into a number
      of
      shares of our common stock equal to the sum of the principal and accrued
      interest on the note, divided by the conversion price equal to a price which
      is
      35% below (i) the average of the last reported sales prices for the shares
      of Common Stock on the NASDAQ National Market, the American Stock Exchange,
      the
      NASDAQ Small Cap Market or the Over-the-Counter Bulletin Board for the 5 trading
      days immediately prior to such date or (ii) if there have been no sales on
      any such market on any applicable day, the average of the highest bid and lowest
      ask prices on such market at the end of any applicable day, or (iii) if the
      market value cannot be calculated as of such date on any of the foregoing bases,
      the fair market value as reasonably determined in good faith by our Board of
      Directors. Each investor had piggyback registration rights that would have
      required the Company to register any shares held by them if the Company
      voluntarily filed a registration statement, or immediately if an investor
      decided to convert their investment into shares of common stock. In
      May 2005, the loan holders amended their original agreements. The new
      agreements released us from the requirement to register the loan holders’
shares. Each loan holder received approximately ten percent of additional shares
      as part of the new agreement. In full settlement of the debt, we issued an
      aggregate of 1,458,000 restricted shares of our common stock to the four
      investors. The fair value of these shares at the date of the settlement was
      $481,140 or $0.33 per share, which was equal to the market price of our common
      stock on the date of the settlement.








**Item
      6.   Management's Discussion and Analysis of Plan of
      Operations**





PLAN
      OF
      OPERATIONS





Pending
      adequate financing, we plan on spending total estimated expenses of $500,000
      for
      the next 12 months, which will include: (a) $380,000 pertaining directly to
      our
      own operations and (b) $120,000 pertaining to funding Designer Diagnostics’
operations.





EXPENSES
      PERTAINING TO OUR OPERATIONS


Type
                  Expenditure
              
              Total
                Expenditure
              
              Monthly
                ExpenditureSalaries*
              
              $
              175,000
              
              $
              14,583Travel
                  related expenses
                  for our Chief
                  Executive Officerpertaining
                  diligence to
                  research and due
              
              $
              40,000
              
              $
              3,333Professional
                    Fees
                    -Legaland Accounting
              
              $
              165,000
              
              $
              13,750Total
              
              $
              380,000
              
              $
              31,666




*
      Salaries include the following: (a) Chief Executive Officer - $130,000; and
      (b)
      Administrative Assistant - $45,000





-21-




FUNDING
      OF DESIGNER DIAGNOSTICS, INC.




Type
                  Expenditure
              
              Total
                Expenditure
              
              Monthly
                ExpenditureOperating
                    Expenses(Rent,
                    supplies, utilities)
              
              $
              50,000
              
              $
              4,167Salaries(President)
              
              $
              70,000
              
              $
              5,833Total:
              
              $
              120,000
              
              $
              10,000





OUR
      PLAN
      OF OPERATIONS TO DATE:





To
      date,
      we have accomplished the following in our Plan of Operations:





·
            In
                February 2006 we completed the funding of
                ReceptoPharm;


·
            In
                January 2006 we established Designer Diagnostics to sell NonTuberculois
                Mycobacterium test kits;


·
            To
                date, we invested a total of $175,000 of a $250,000 committed investment
                in XenaCare for the investment in 15 Site of Care physician’s offices with
                XenaCare, LLC, a healthcare management company;


·
            On
                January 24, 2006, we obtained NanoLogix’s intellectual property pertaining
                to the manufacture of test kits for the rapid isolation, detection
                and
                antibiotic sensitivity testing of certain microbacteria, which includes
                reassignment to us of 11 key patents protecting the diagnostics test
                kit
                technology and NanoLogix licensing to us the remaining 18 patents
                that
                protect the diagnostics test kit technology;


·
            Designer
                Diagnostics held a Continuing Medical Education Seminar at the Mahatma
                Gandhi Institute in India on March 24, 2006 during the World Stop
                TB Day.
                At that meeting, Designer Diagnostics officially began marketing
                their
                test kits for the rapid isolation, detection and antibiotic-sensitivity
                testing of microbacteria. In March 2006, we made our first sales
                of
                Designer Diagnostics’ test kits;


·
            In
                approximately October 2005, we completed pre-clinical studies with
                various
                companies that ReceptoPharm has agreements with pertaining to
                ReceptoPharm’s Multiple Sclerosis (MS) and HIV drugs, which consisted of
                (a) and (b) below:




(a)
      MS
      Drug under Development (RPI-78M) - ReceptoPharm conducted microarray and
      histoculture studies and related


analysis
      of the cells of Multiple Sclerosis patients to ascertain how RPI-78M affected
      the cells of these patients. Microarray analysis is the study of the gene
      expression of cells. Histoculture is the study of the entire cellular
      environment. We measured the effect of RPI-78M on gene expression using cDNA
      microarray technology to identify any potentially unique changes in gene
      expression that may be caused by RPI-78M. After statistical evaluation of the
      data, the researchers found more than sixty genes with significant changes
      in
      expression as compared to the control. In analyzing the affected genes, at
      least
      thirty of them may have a specific role in the progression of the disease and
      symptoms of MS; and





-22-




(b)
      HIV
      Drug under Development (RPI-MN) - Viral isolates are common mutations of HIV.
      ReceptoPharm, through an agreement with the University of California, San Diego,
      conducted research to study the effect of ReceptoPharm’s drug under development
      on different viral isolates to determine the drug’s efficacy in mutated forms of
      the HIV virus. The ability of the HIV virus to establish resistance to
      therapeutic drugs through genetic mutation is a major concern in the treatment
      of HIV/AIDS. HIV does not always make perfect copies of itself. With billions
      of
      viruses being made every day, lots of small, random differences can occur.
      The
      differences are called mutations and these mutations can prevent drugs from
      working effectively. When a drug no longer works against HIV, this is called
      drug resistance and the virus with the mutation is considered to be ‘resistant’
to the drug. With the increasing number of drug-resistant patients, it is of
      great importance in the development of new HIV/AIDS therapeutics that they
      will
      be effective against HIV of known resistance characteristics. The inhibition
      of
      multi-resistant HIV-1 strains by RPI-MN preparations was investigated at the
      La
      Jolla Institute of Molecular Medicine. The results from these trials indicate
      that the drug is effective against drug-resistant strains of HIV.





OUR
      TWELVE-MONTH PLAN OF OPERATIONS PENDING ADEQUATE FINANCING





We
      intend
      to accomplish the following regarding our Plan of Operations over the next
      twelve months.





*Designer
      Diagnostics, Inc.*




Designer
      Diagnostics’ NTM Test Kits are now being marketed and will continue to be
      marketed to a global audience, including:




·
            Hospitals;


·
            Pharmaceutical
                companies;


·
            Biotechnology
                companies;


·
            Medical
                device distributors; and


·
            Governmental
                organizations.





Over
      the
      next twelve months, Designer Diagnostics will attempt to distribute the Test
      Kits to provide a revenue stream that we will use to fund drug research and
      clinical studies in the area of MS and HIV.





Third-party
      researchers are currently validating Designer Diagnostics’ TB Test Kit and we
      expect the research to be complete by the end of our second quarter of 2006.
      Designer Diagnostics has an agreement with Svizera Pharmaceuticals in India
      for
      the distribution of these Test Kits. This distribution agreement is contingent
      upon a thirty-day test of the TB Test Kits and required validation. Svizera
      is
      the exclusive supplier of current TB diagnostic kits to the World Health
      Organization. During 2005, Svizera supplied over 15 million of those kits to
      the
      World Health Organization.





Designer
      Diagnostics’ President will attempt to develop a distribution network and
      actively market the test kits to supply administrators of hospitals,
      pharmaceutical and biotechnology companies, medical device distributors, and
      governmental organizations. Additionally, Designer Diagnostics will attempt
      to
      acquire other medical diagnostic products to market primarily to distributors,
      but also to pharmaceutical and biotechnology companies and government
      organizations.





*Our
      President*




Our
      President’s responsibilities will primarily focus on seeking license agreements
      to develop revenue streams in the area of drug discovery, drug development,
      and
      new medical device technologies.





-23-




*ReceptoPharm*





Clinical
      Studies




ReceptoPharm
      plans to conduct the clinical studies described in (a) and (b)
      below:





(a)
      Adrenomyeloneuropathy (AMN)


Adrenomyeloneuropathy
      (AMN) is a genetic disorder that affects the central nervous system. The disease
      causes neurological disability that is slowly progressive over several decades.
      Throughout our twelve month Plan of Operations and for 3 months thereafter,
      ReceptoPharm plans to conduct clinical studies of its Adrenomyeloneuropathy
      (AMN) drug, which is currently under development. ReceptoPharm has an agreement
      with the Charles Dent Metabolic Unit located in London, England to conduct
      a
      clinical study that provides for:




·
            Recruitment
                of 20 patients with AMN;


·
            Administering
                ReceptoPharm's AMN drug under development;
                and


·
            Monitoring
                patients throughout a 15-month
                protocol.





The
      clinical study is classified as a Phase III study and is the final step required
      for regulatory approval of the drug.





(b)
      HIV
      and MS


ReceptoPharm
      also plans to conduct clinical studies of its HIV and MS drugs under
      development. These "Phase II" studies will either prove or disprove the
      preliminary efficacy of ReceptoPharms's HIV/MS drugs under development.
      ReceptoPharm is in the process of attempting to secure agreements with third
      parties to conduct such clinical studies.





Liquidity
      and Capital Resources




Our
      independent registered public accounting firm has issued a going concern opinion
      on our audited financial statements for the fiscal year ended December 31,
      2005
      since we have experienced recurring net losses and at December 31, 2005, a
      working capital deficiency. Further, as stated in Note 1 to our consolidated
      financial statements included herein, we have experienced recurring net losses,
      and at December 31, 2005 we have a working capital deficiency that raises
      substantial doubt about our ability to continue as a going concern.





We
      have
      estimated expenses of $500,000 pertaining to our twelve month Plan of Operations
      or $41,666 of monthly expenditures. Based upon our current cash position at
      December 31, 2005 as well as our current outstanding obligations, we have
      insufficient funds to conduct our operations for more than one
      month.





We
      will
      attempt to satisfy our estimated cash requirements of $500,000 for our twelve
      month Plan of Operations through the sale of Designer Diagnostics’ test kits. If
      sales do not achieve adequate levels to provide for our operations, we may
      raise
      additional capital through divestiture of assets, a private placement of our
      equity securities or, if necessary, possibly through shareholder loans or
      traditional bank financing or a debt offering; however, because we are a
      development stage company with a limited operating history and a poor financial
      condition, we may be unsuccessful in obtaining shareholder loans, conducting
      a
      private placement of equity or debt securities, or in obtaining bank financing.
      In addition, if we only have nominal funds by which to conduct our operations,
      we may have to curtail our research and development activities, which will
      negatively impact development of our possible products. We have no alternative
      Plan of Operations. In the event that we do not obtain adequate financing to
      complete our Plan of Operations or if we do not adequately implement an
      alternative plan of operations that enables us to conduct operations without
      having received adequate financing, we may have to liquidate our business and
      undertake any or all of the following actions:




o
            Sell
                or dispose of our assets, if any;




o
            Pay
                our liabilities in order of priority, if we have available cash topay
                such liabilities;




o
            If
                any cash remains after we satisfy amounts due to our creditors,distribute
                any remaining cash to our shareholders in an amount equalto
                the net market value of our net
                assets;




o
            File
                a Certificate of Dissolution with the State of California todissolve
                our corporation and close our
                business;








-24-




o
            Make
                the appropriate filings with the Securities and ExchangeCommission
                so that we will no longer be required to file periodic andother
                required reports with the Securities and Exchange Commission,if,
                in fact, we are a reporting company at that time;
                and




o
            Make
                the appropriate filings with the National Association of SecurityDealers
                to effect a delisting of our common stock, if, in fact, ourcommon
                stock is trading on the Over-the-Counter Bulletin Board at thattime.





Based
      upon our current assets, however, we will not have the ability to distribute
      any
      cash to our shareholders. If we have any liabilities that we are unable to
      satisfy and we qualify for protection under the U.S. Bankruptcy Code, we may
      voluntarily file for reorganization under Chapter 11 or liquidation under
      Chapter 7. Our creditors may also file a Chapter 7 or Chapter 11 bankruptcy
      action against us. If our creditors or we file for Chapter 7 or Chapter 11
      bankruptcy, our creditors will take priority over our shareholders. If we fail
      to file for bankruptcy under Chapter 7 or Chapter 11 and we have creditors,
      such
      creditors may institute proceedings against us seeking forfeiture of our assets,
      if any.





We
      do not
      know and cannot determine which, if any, of these actions we will be forced
      to
      take. If any of these foregoing events occur, you could lose your entire
      investment in our shares.





**Item
      7.    Financial Statements**





The
      Financial Statements appear in a separate section of this report following
      Part
      III.





**Item
      8.    Changes in and Disagreements with Accountants on Accounting
      and** **Financial
      Disclosure**





Not
      applicable





**Item
      8A.    Controls and Procedures**





As
      required by Rule 13a-15 under the Exchange Act, as of December 31, 2005, the
      end
      of the period covered by this Annual Report on Form 10-KSB, we carried out
      an
      evaluation of the effectiveness of the design and operation of our disclosure
      controls and procedures. This evaluation was carried out by our sole executive
      officer Rik Deitsch, who is our Chief Executive Officer and Principal Financial
      Officer, and a member of our board of directors. Based upon his evaluation,
      Mr.
      Deitsch concluded that our disclosure controls and procedures are effective
      to
      ensure that information required to be disclosed by us in reports that we file
      or submit under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in Securities and Exchange Commission rules
      and forms. However, Mr. Deitsch did recommend to the Board of Directors that
      the
      Company should seek to hire an experienced Chief Financial Officer, which would
      improve the review process of our controls and procedures.








-25-





Changes
      in internal controls over financial reporting





There
      have been no changes in our system of internal control over financial reporting
      in connection with the evaluation by our Chief Executive Officer and Principal
      Financial Officer during our fiscal quarter ended December 31, 2005 that have
      materially affected, or are reasonably likely to materially affect, our internal
      control over financial reporting.








**ITEM
      8B.    Other Information**





None.





**PART
      III**





**Item
      9.    Directors, Executive Officers, Promoters and Control
      Persons; Compliance** **With
      Section 16(a) of the Exchange Act**





Directors
      and Executive Officers





Our
      Board
      of Directors elects our executive officers annually. Directors are elected
      to
      hold office until the next annual meeting. A majority vote of the directors
      who
      are in office is required to fill vacancies of our Board of Directors not caused
      by removal. Each director, including a Director elected to fill a vacancy,
      will
      hold office until the expiration of the term for which the Director was elected
      and until a successor has been elected. Our directors and executive officers
      are
      as follows:





Listed
      below are our executive officers and directors as of December 31,
      2005





Name
            
            Age
            
            Position
              with the
              Company
            
            Director
              SinceRik
                J. Deitsch
            
            38
            
            Chairman,
                President,
            
            2002Chief
                Executive Officer,and
                Chief Financial OfficerMichael
                Doherty
            
            
            
            Former
                Executive Chairman (1)
            
            June
                2005-April
                2006Stanley
                J Cherelstein
            
            47
            
            Director
                (2)
            
            2004Stewart
                Lonky, M.D.
            
            59
            
            Director
                (3)
            
            2004Tanvir
                Khandaker, M.D.
            
            36
            
            Director
            
            2005





(1) Michael Doherty
        was Executive Chairman of the Board from June 1, 2005 until his resignation
        on
        April 1, 2006.




(2) Stanley
      Cherelstein is the Chairman of our Audit Committee and Compensation Committee.
      Additionally, he is our Audit Committee Financial Expert.





(3) Dr.
      Lonky
      is a member of our Audit Committee and Compensation Committee.





**Michael
      Doherty.** On
      June 1, 2005, we apppointed Michael Doherty as our executive Chairman until
      he resigned on April 1, 2006. From December 1997 until May 2003, Michael Doherty
      was a Director, and since May 2003, Chairman of the Board of Tressel Holdings,
      a
      Securities and Exchange Commission reporting company. Since November 1999,
      Michael Doherty has been President of Doherty & Company, a firm specializing
      in venture capital and private equity funding for development stage companies.
      From February 1999 to October 1999, Mr. Doherty served as Senior
      Managing Director of Spencer Trask Securities Incorporated. Mr. Doherty
      served as Managing Director and Director of Private Equity at Cruttenden Roth.





-26-








**Rik
      J. Deitsch** has been
      our President, Chief Executive Officer, Chief Financial Officer, and a Director
      since November 7, 2002 and our Chairman of the Board from December 15, 2003
      until June 1, 2005 and from April 1, 2006 to present. From February 1998 through
      November 2002, Mr. Deitsch served as the President of NDA Consulting Inc.,
      a
      biotechnology research group that provided consulting services to the
      pharmaceutical industry. NDA Consulting specializes in the research of peptides
      derived from Cone Snail venom and Cobra venom. In October 1999, Mr. Deitsch
      founded Wellness Industries, a private corporation that provides formulations,
      research and education in the dietary supplement industry. Research conducted
      by
      Rik J Deitsch provided some of the beginning fundamentals for the development
      of
      drugs being studied for the treatment of cancer and intractable pain. Mr.
      Deitsch has several papers and posters on rational drug design using computer
      simulations. Mr. Deitsch received a B.S. in Chemistry and an M.S. in
      Biochemistry from Florida Atlantic University in June 1997 and December 1999,
      respectively. Throughout 1999 and 2000, he conducted research for the Duke
      University Medical School Comprehensive Cancer Center. Mr. Deitsch is an adjunct
      professor and teaches several courses for Florida Atlantic University's College
      of Business and Continuing Education Department. Mr. Deitsch also teaches
      physician CME courses internationally, lecturing on lifestyle choices in the
      prevention and treatment of chronic disease states. He is also the co-author
      of
      Are You Age-Wise, a book that reviews current research in healthy aging as
      it
      relates to lifestyle choices and supplementation. Mr. Deitsch has been the
      Chairman of Waiora's Scientific Advisory Board since April 2004. Waiora develops
      and markets natural, science-based dietary supplements and personal care
      products that provide healthy aging solutions.





**Stanley
      J. Cherelstein** has been
      our Director since September 28, 2004. Since December 2003, Mr. Cherelstein
      has
      been the Chief Executive Officer and President of Waiora, Inc., which develops
      and distributes Healthy Aging products. From August 2002 to July 2003, Mr.
      Cherelstein was the President and Chief Operating Officer of Unicity, Inc.,
      a
      $300 million nutritional supplement company with offices in thirteen countries
      in North America, Asia and Europe. From July 2001 to August 2002, Mr.
      Cherelstein was the Chief Operating Officer of Unicity where he was responsible
      for global operations including supply chain, distribution, information
      technology, customer service, human resources and finance. From July 1999 to
      July 2001, Mr. Cherelstein served as the Senior Vice President of Finance and
      Operations at Rexall Showcase International (RSI), a division of Rexall Sundown.
      RSI was a $180 million nutritional supplement company that operated in the
      USA,
      Japan, Korea, Taiwan and Hong Kong. From July 1997 to July 1999, Mr. Cherelstein
      served as Vice President of Finance at RSI. Mr. Cherelstein began his career
      in
      public accounting at the firm of Cooper's and Lybrand where he worked for a
      total of five years from 1983 to 1988, including three years in auditing and
      two
      years in management consulting. In April 1983, Mr. Cherelstein received a B.S.
      Degree in Business and Accounting from the University of
      Pittsburgh.





**Dr.
      Stewart Lonky** has been
      our director since November 5, 2004. Dr. Lonky is a co-founder of the Trylon
      Corporation, a medical test kit firm located in Torrance, California and has
      served as its Chief Medical Officer since 1990. Trylon Corporation has developed
      diagnostic products for the early diagnosis of cervical and oral cancer, and
      in
      connection with that Dr. Lonky's responsibilities have included product
      development, the direction of clinical research and interacting with regulatory
      agencies, including the U.S. Food and Drug Administration (FDA). In these roles
      he has been instrumental in successfully bringing a number of products to the
      medical marketplace. He has continued to be engaged in both clinical and
      biochemical research, and has published research articles in the peer-reviewed
      literature in the areas of cervical cancer and cellular pathophysiology. Dr.
      Lonky has been a practicing physician in the Los Angeles Area since 1982. He
      is
      Board Certified in Internal Medicine, Pulmonary Medicine, and Critical Care
      Medicine. Prior to entering practice, Dr. Lonky served as a full-time faculty
      member at the University of


California,
      San Diego in the Department of Medicine, Pulmonary Division, where he was
      engaged in research in the biochemistry of lung injury. He was a National
      Institutes of Health (NIH) Postdoctoral Fellow from 1974-77. He has published
      over twenty articles and abstracts in the peer-reviewed literature during that
      time, and authored two book chapters.








-27-





**Dr.
      Tanvir Khandaker** has been
      our director since January 24, 2005. Since November 2001, he has been the
      President and a Director of Khandaker Partners, an independent research firm
      located in New York, New York, which specializes in fundamental analysis of
      public companies. From January 1999 to December 2001, Dr. Khandaker was a
      Research Associate at the Brigham and Women's Hospital of


the
      Harvard Medical School and from January 1998 to December 1999, Dr. Khandaker
      was
      a Research Associate at the Massachusetts General Hospital of the Harvard
      Medical School. In December 1995, Dr. Khandaker received a medical degree from
      the Robert Mitford Medical College located in Dhaka, Bangladesh, and from
      January 1996 to April 1997, he was a Resident in Internal Medicine and Surgery
      at Robert Mitford Medical College.





FAMILY
      RELATIONSHIPS





None





LEGAL
      PROCEEDINGS





Our
      directors, executive officers and control persons have not been involved in
      any
      of the following events during the past five years:




1.
      any
      bankruptcy petition filed by or against any business of which such person was
      a
      general partner or executive officer either at the time of the bankruptcy or
      within two years prior to that time;




2.
      any
      conviction in a criminal proceeding or being subject to a pending criminal
      proceeding (excluding traffic violations and other minor offenses);




3.
      being
      subject to any order, judgment, or decree, not subsequently reversed, suspended
      or vacated, of any court of competent jurisdiction, permanently or temporarily
      enjoining, barring, suspending or otherwise limiting his involvement in any
      type
      of business, securities or banking activities; or




4.
      being
      found by a court of competent jurisdiction (in a civil action),the Commission
      or
      the Commodity Futures Trading Commission to have violated a federal or state
      securities or commodities law, and the judgment has not been reversed,
      suspended, or vacated.





Section
      16(a) Compliance of Officers and Directors





Based
      upon our review of Forms 3, 4, and 5 furnished to us during the last fiscal
      year, all of our officers, directors and persons holding more than ten percent
      of our equity securities have filed the reports required of them to be filed
      pursuant to Section 16(a) of the Exchange Act, with the exception of: (a) our
      former Director, Michael Flax, who failed to file a Form 5 and Schedule 13D;
      and
      (b) our former Executive
      Chairman of the Board, Michael Doherty, who failed to file a Form 3 in June
      2005
      or thereafter in connection with our June 1, 2005 grant to Doherty and
      Company of 13,600,000 options to purchase our common stock.





Audit
      Committee/Compensation Committee





On
      November 5, 2004, our Board of Directors established an audit committee and
      a
      compensation committee. Mr. Cherelstein and Dr. Lonky serve on both committees
      and Mr. Cherelstein is the Chairman of both committees. Mr. Cherelstein is
      also
      the audit committee financial expert.





Code
      of
      Ethics





We
      have a
      code of ethics that applies to all of our employees including its principal
      executive officer, principal financial officer and principal accounting officer.
      A copy of this code is filed as an exhibit to this annual report on Form 10-KSB
      and is also available on our website at www.nutrapharma.com. We will provide
      any
      person without charge, a copy of our code of ethics upon the receipt of a
      written request sent to our headquarters at 3473 High Ridge Road, Boynton Beach,
      Florida, 33426. We intend to disclose any changes in or waivers from its code
      of
      ethics by posting such information on our website or by filing a Form
      8-K.





-28-





**Item
      10. Executive Compensation**





The
      following table summarizes compensation information for the last three fiscal
      years for (i) the Company's Chief Executive Officer and (ii) the four most
      highly compensated executive officers other than the Chief Executive Officer
      who
      were serving as executive officers of the Company at the end of the fiscal
      year
      (collectively, the "Named Executive Officers").





SUMMARY
        COMPENSATION TABLE


Long
                  Term CompensationSecuritiesAnnual
                  Compensation
              
              Restricted
              
              UnderlyingFiscal
              
              Salary
              
              Bonus
              
              Stock
                  Awards
              
              OptionsName
                  and Principal Position
              
              
              Year
              
              
              ($)
              
              
              ($)
              
              
              ($)
              
              
              (#)Michael
                  DohertyExecutive
                  Chairman of theBoard
              
              
              2005
              
              
              
              
              
              
              
              
              
              
              
              13,600,000*Rik
                  J. Deitsch
              
              
              2005
              
              $
              120,000
              
              
              --
              
              
              --
              
              
              --President,
                  Chief Executive
              
              
              2004
              
              $
              132,500
              
              
              --
              
              $
              200,000
              
              
              --Officer
                  and Chief Financial
              
              
              2003
              
              $
              29,500
              
              
              --
              
              $
              275,000
              
              
              --Officer





*Michael
      Doherty was our Executive Chairman of the Board from June 1, 2005 to April
      1,
      2006, at which time he resigned as our Executive Chairman. On June 1, 2005,
      we
      and Michael Doherty entered into agreements whereby Doherty was appointed as
      our
      Executive Chairman of the Board and we granted Doherty & Company thirteen
      million six hundred thousand (13,600,000) options to purchase our common stock
      and Doherty was appointed as our Financing Agent. Michael Doherty is the sole
      owner of Doherty and Company. On April 1, 2006, we, Doherty and Company, and
      Michael Doherty completed a Termination Agreement whereby the employment and/or
      contractual relationship established by the Doherty Agreements was terminated
      and ceased as of the execution of the Termination Agreement and the 13,600,000
      options were cancelled; however, in consideration of entering into the
      Termination Agreement, we granted Doherty and Company options to purchase two
      million (2,000,000) shares of our common stock.





Stock
      Option Grants in Last Fiscal Year





The
      following tables show certain information with respect to incentive and
      non-qualified stock options granted in 2005 to named executives under and the
      aggregate value at December 31, 2005 of such options. In general, the per share
      exercise price of all options is equal to the fair market value of a share
      of
      Common Stock on the date of grant.





OPTION
      GRANTS IN 2005 INDIVIDUAL GRANTS OF OPTIONS


PERCENTNUMBER
                    OF
              
              OF
                  TOTAL
              
              
              
              
              
              MARKETSHARES
                    OF
              
              OPTIONS
              
              
              
              
              
              PRICECOMMON
                  STOCK
              
              GRANTED
                  TO
              
              EXERCISE
              
              
              
              ONUNDERLYING
              
              EMPLOYEES
              
              PRICE
              
              EXPIRATION
              
              DATE 
                  OFNAME
              
              OPTIONS
              
              IN
                  2005
              
              ($/SH)
              
              DATE
              
              GRANTMichael
                  Doherty
              
              13,600,000
              
              100%
              
              $0.27
              
              June
                  1, 2010(1)
              
              $0.36




-29-





AGGREGATED
      2005 YEAR END OPTIONS VALUES


FOR
      OPTIONS GRANTED PRIOR TO AND DURING 2005


Number
                  of Shares ofCommonStock
                    Underlying
              Value
                  of UnexercisedUnexercised
              In-The-Money
                  Options AtOptions
                  At 12-31-2005
              12-31-2005
                  (1)Exercisable/
              Exercisable/Name
              Unexercisable
              UnexercisableMichael
                  Doherty
              0
                  /
                  13,600,000
              $0
                  /$2,720,000




(1)
      On
      June 1, 2005, Doherty and Company received a five year option to purchase
      Thirteen Million Six Hundred Thousand (13,600,000) shares of our common stock
      at
      an exercise price equal to $0.27 per share, vesting over a two year period,
      with
      50% exercisable on May 31, 2006 and the balance exercisable in twelve equal
      monthly installments thereafter, in exchange for providing Mr. Doherty’s
      services. Mr. Doherty is the sole owner of Doherty and Company. The options
      never vested nor were they ever exercised. As detailed above, although we
      previously granted Doherty and Company 13,600,000 options, they were cancelled
      on April 1, 2006 in connection with our Termination Agreement with Michael
      Doherty and Doherty and Company; however, in connection with the Termination
      Agreement, we granted Doherty and Company options to purchase two million
      (2,000,000) shares of our common stock exercisable for a period of five years
      after the April 1, 2006 grant and at an exercise price of $0.27 per
      share.





Board
      Compensation





Director
      Tanvir Khandaker





Tanvir
      Khandaker has been our director since January 24, 2005.  On January 26,
      2005, we issued 500,000 shares of our restricted common stock to Tanvir
      Khandaker for his services as our director. The restricted shares were valued
      at
      $0.40 per share or an aggregate of $200,000. On February 14, 2005, we entered
      into a Consulting Agreement with Dr. Tanvir Khandaker, to work full time as
      a
      consultant in the areas of business development, mergers and acquisitions,
      partnering and licensing during our Fiscal Year 2005. The agreement provides
      that in return for Dr. Khandaker's services, we provide a monthly retainer
      of
      $10,000 to him; however, those services were rendered only for a period of
      three
      months from March 2005 to May 2005.  We paid Dr. Khandaker a total of
      $30,000 in 2005, but have not paid him since June 2005. We intend to cancel
      our
      agreement with Dr. Khandaker.





There
      are
      no standard arrangements pursuant to which directors are compensated for
      services provided to us.





**Item
      11.    Security Ownership of Certain Beneficial Owners and
      Management and** **Related
      Stockholder Matters**





The
      following tables sets forth, as of April 18, 2006, certain information with
      respect to the beneficial ownership of our common stock by each stockholder
      known by us to be the beneficial owner of more than 5% of our common stock
      and
      by each of our current directors and executive officers. Each person has sole
      voting and investment power with respect to the shares of common stock, except
      as otherwise indicated. Information relating to beneficial ownership of common
      stock by our principal stockholders and management is based upon information
      furnished by each person using "beneficial ownership" concepts under the rules
      of the Securities and Exchange Commission. Under these rules, a person is deemed
      to be a beneficial owner of a security if that person has or shares voting
      power, which includes the power to vote or direct the voting of the security,
      or
      investment power, which includes the power to vote or direct the voting of
      the
      security. The person is also deemed to be a beneficial owner of any security
      of
      which that person has a right to acquire beneficial ownership within 60
      days.





-30-





Under
      the
      Securities and Exchange Commission rules, more than one person may be deemed
      to
      be a beneficial owner of the same securities, and a person may be deemed to
      be a
      beneficial owner of securities as to which he or she may not have any pecuniary
      beneficial interest. We are unaware of any contract or arrangement that could
      result in a change in control of our company.





The
      following table assumes based on our stock records, that there are 71,797,182
      shares issued and outstanding as of April 18, 2006.





Security
      Ownership of Beneficial Owners




Shares
                  of
              Percent
                  ofCommon
                  Stock
              Common
                  StockName
                  and Address of Beneficial Owner
              Beneficially
                  Owned
              OutstandingOpus
                  International*
              11,692,556
              16.3%19
                  Hillsyde CourtCockeysville,
                  Maryland 21030Total
              11,692,556
              16.3%




*On
      April
      13, 2005, Opus International filed an amendment to Schedule 13D reporting that
      its 11,692,556 shares were purportedly pledged as collateral for a $2.5 million
      loan from Clarisco Stiftung. Opus International is a limited liability company
      organized under Maryland law. Opus International appears to have been controlled
      at various times by our former Chairman of the Board, Zirk Engelbrecht, and
      his
      then wife, Marcy Engelbrecht. We have attempted to ascertain from Opus
      International other information we consider material to Opus International's
      reporting obligations; however, Opus International has failed to respond to
      our
      request for information. We have, however, been advised that the purported
      collateral, i.e. the stock certificate, provided by Opus International to
      Clarisco Stiftung, may not be perfected or be in negotiable form. We will
      continue in our efforts to determine the status of this matter.





Security
      Ownership of Management


Shares
                  of
              Percent
                  ofName
                  and Address of
              Common
                  Stock
              Common
                  StockDirector
                  or Executive Officer
              Beneficially
                  Owned
              OutstandingRik
                  J. Deitsch
              1,500,000
              2.1%Chief
                  Executive Officer/President1829
                  Corporate DriveBoynton
                  Beach, Florida 33426Stanley
                  J Cherelstein
              500,000
              0.7%Director1829
                  Corporate DriveBoynton
                  Beach, Florida 33426Dr.
                  Stewart Lonky
              500,000
              0.7%Director1158
                  Chautaqua BoulevardPacific
                  Palisades, California 90272Dr.
                  Tanvir Khandaker
              500,000
              0.7%Director181
                  Ogden AvenueJersey
                  City, New Jersey 07307
 Mr.
                  Michael Doherty
              --
              --Former
                  Executive Chairman of theBoard
                  of Directors (2)All
                  executive officers and directorsas
                  a group (4) persons
              3,000,000
              4.2%


(2)
        Michael Doherty served as our Executive Chairman of the Board during our
        Fiscal
        Year 2005, from June 1, 2005 until his resignation on April 1, 2006. As of
        December 31, 2005, Doherty & Company, which is solely owed by Michael
        Doherty, held 13,600,000 options to purchase 13,600,000 shares of our common
        stock, none of which ever vested. On April 1, 2006, in accordance with the
        terms
        of a Termination Agreement, the 13,600,000 options were cancelled; however,
        Doherty and Company then received 2,000,000 options as consideration for
        entering into the Termination Agreement.




-31-




**Item
      12.    Certain Relationships and Related
      Transactions**





*Loan
      Transaction Between Our Chief Executive Officer/President and
      Us*





Our
      Chief
      Executive Officer/President, Rik Deitsch, has lent us funds for our operations.
      As of December 31, 2005, the total amount owed to Mr. Deitsch was $90,000.
      As of
      April 18, 2006, the total amount owed to Mr. Deitsch was $323,375. The funds
      lent by Mr. Deitsch to us are in the form of a non-interest bearing demand
      loan.





*Lease
      Agreement Between Waiora and Us*





As
      more
      fully detailed on page 13, our March 2004 verbal lease agreement between Stan
      Cherelstein, on behalf of Waiora, Inc. as its President, and Rik Deitsch, as
      our
      President and on our behalf, provides for our use of 800 square feet of Waiora’s
      lease of office space at 3473 High Ridge Road, Boynton Beach, Florida. We make
      no cash payment for the use of this space; instead, we are permitted to use
      such
      space in return for our President serving as Waiora’s Chairman of its Scientific
      Advisory Board. The verbal lease agreement provides, among other things, that
      Stan Cherelstein serves as one of our Directors and as Chairman of our Audit
      and
      Compensation Committees.





*Director
      Tanvir Khandaker*





Tanvir
      Khandaker has been our director since January 24, 2005.  On January 26,
      2005, we issued 500,000 shares of our restricted common stock to Tanvir
      Khandaker for his services as our director. The restricted shares were valued
      at
      $0.40 per share or an aggregate of $200,000. On February 14, 2005, we entered
      into a Consulting Agreement with Dr. Tanvir Khandaker, to work full time as
      a
      consultant in the areas of business development, mergers and acquisitions,
      partnering and licensing during our Fiscal Year 2005. The agreement provides
      that in return for Dr. Khandaker's services, we provide a monthly retainer
      of
      $10,000 to him; however, those services were rendered only for a period of
      three
      months from March 2005 to May 2005.  We paid Dr. Khandaker a total of
      $30,000 in 2005, but we have not paid him since June 2005. We intend to cancel
      our agreement with Dr. Khandaker.




*Former
        Executive Chairman of the Board, Michael Doherty*
 
 On
        June
        1, 2005, we and Michael Doherty entered into agreements whereby Doherty was
        appointed as our Executive Chairman of the Board and we granted Doherty &
Company thirteen million six hundred thousand (13,600,000) options to purchase
        our common stock and Doherty was appointed as our Financing Agent. Doherty
        and
        Company has never raised any financing on our behalf.
 
 On
        April
        1, 2006, Doherty and Company, Michael Doherty, and us completed a Termination
        Agreement whereby the employment and/or contractual relationship established
        by
        the Doherty Agreements was terminated and ceased as of the execution of the
        Termination Agreement and the 13,600,000 options were cancelled; however,
        in
        consideration of entering into the Termination Agreement, we granted Doherty
        and
        Company options to purchase two million (2,000,000) shares of our common
        stock.
        The 2,000,000 options expire five years from the grant on April 1, 2006 and
        are
        fully exercisable upon the grant at $0.27 per share.


-32-




**Item
      13. Exhibits**





(a)  
      The following Financial Statements are filed as part of this report under Item
      7.




Report
      of
      Independent Auditor


Consolidated
      Balance Sheet


Consolidated
      Statements of Operations


Consolidated
      Statements of Cash Flows


Consolidated
      Statement of Changes in Stockholders' Equity (Capital Deficit)


Notes
      to
      Consolidated Financial Statements





(b)  
      The following exhibits are filed herewith or are incorporated by reference
      to
      exhibits previously filed with the SEC:





Exhibit
      Number/Description





3.1
            Certificate
                of Incorporation dated February 1, 2000.
                (i)


3.2
            Certificate
                of Amendment to Articles of Incorporation dated July 5,2000.
                (i)


3.3
            Certificate
                of Amendment to Articles of Incorporation dated October 31,2001.


3.4
            Bylaws
                of the Company. (i)


4.1
            Form
                of Stock Certificate (i)


5.1
            Opinion
                of Kenneth Eade, Attorney at Law on SB-2 Registration
                (i)


5.2
            Opinion
                of Kenneth Eade, Attorney at Law on issuance of stock under planand
                consent dated December 4, 2003 (vi)


6
            Specimen
                of Stock Certificate (i)


10.1
            Acquisition
                Agreement between Cyber Vitamin.com and Desert CorporateServices
                dated November 26, 2001 (ii)


10.2
            Share
                Exchange Agreement between Nutra Pharma Corp. and Nutra Pharma,Inc.
                dated November 26, 2001 (ii)


10.3
            Joint
                Venture Agreement between Nutra Pharma Corp. and Terra Bio Pharmadated
                January 29, 2002 (iii)


10.4
            Definitive
                Agreement for Exchange of Common Stock dated August 20, 2002by
                and among Nutra Pharma Corp. and Bio Therapeutics, Inc.
                (iii)


10.5
            Closing
                Agreement for the Exchange of Common Stock dated August 20, 2002by
                and between Nutra Pharma Corp. and Bio  Therapeutics, Inc.
                (iv)


10.6
            Amendment
                to Closing Agreement for the Exchange of Common Stock datedSeptember
                27, 2002 (v)


10.7
            Acquisition
                Agreement dated September 19, 2003 between Nutra Pharma Corp.and
                Infectech, Inc. (vi)


10.8
            Acquisition
                Agreement between Nutra Pharma Corp. and ReceptoPharm, Inc.dated
                February 20, 2004 (vii)


10.9
            Settlement
                Agreement dated September 28, 2004 between Opus International,LLC
                (xi)


10.10
              Agreement
                  with XenaCare (xi)
 10.11
              Agreement
                  with Eno Research and Development, Inc.
                  (xi)
 10.12
              Agreement
                  with Investor-Gate.com (xi)
 10.13
              Agreement
                  with Tanvir Khandaker
 14.1
              Code
                  of Ethics of the Company (x)
 20.1
              Rescission,
                  Settlement and Release Agreement between George Minto andZirk
                  Engelbrecht (viii)
 20.2
              Offer
                  to Purchase for Cash up to 2,000,000 shares of Nutra Pharma
                  Corp.for
                  $.80 cash per share (viii)
 20.3
              License
                  Agreement dated October 3, 2003 between Biotherapeutics, Inc.and
                  Nutra Pharma Corp. (ix)
 20.4
              Addendum
                  to license Agreement dated October 3, 2003 betweenBiotherapeutics,
                  Inc. and Nutra Pharma Corp. (ix)
 31.1
              Certification
                  of Chief Executive Officer and Chief Financial Officerpursuant
                  to Section 302 of the Sarbanes-Oxley Act of
                  2002
 32.1
              Certification
                  of Chief Executive Officer and Chief Financial Officerpursuant
                  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of
                  the Sarbanes-Oxley Act of 2002
 -------------------
 (i)
              Incorporated
                  by reference to the Company's Registration Statement on FormSB-2/A
                  (Registration No. 33-44398) filed on April 6, 2001 (the"Registration
                  Statement").
 (ii)
              Incorporated
                  by reference to the Company's Current Report on Form 8K, filedDecember
                  26, 2001
 (iii)
                Incorporated byreference
                    to the Company's Current Report on Form 8K,filed
                    February 28, 2002
 (iv)
              Incorporated
                  by reference to the Company's Current Report on Form 8K, filedSeptember
                  9, 2002
 (v)
              Incorporated
                  by reference to the Company's Current Report on Form 8K,
                  filedOctober
                  31, 2002
 (vi)
              Incorporated
                  by reference to the Company's Current Report on Form 8K, filedOctober
                  20, 2003
 (vii)
                Incorporated byreference
                    to the Company's Current Report on Form 8K,filed
                    March 8, 2004
 (viii)
                Incorporatedby
                    reference to the Company's Current Report on Form 8K,filed
                    November 5, 2002
 (ix)
              Incorporated
                  by reference to the Company's Report on Form 10-KSB, filedApril
                  20, 2004
 (x)
              Incorporated
                  by reference to the Company's Report on Form 10-KSB/A, filedMay
                  7, 2004
 (xi)
              Incorporated
                  by reference to the Company's Report on Form 10-QSB, filedDecember
                  21, 2004





-33-





**Item
      14.   Principal Accountant Fees and Services**





AUDIT
      FEES





On
      February 24, 2005, we engaged the firm of Stark Winter Schenkein & Co., as
      our new principal independent accountant to audit our financial statements.
      We
      paid Stark Winter Schenkein & Co. audit fees as follows:




2004
              2005$30,500
              $35,000




TAX
      FEES





No
      such
      fees were paid to Stark Winter Schenkein & Co. in 2004 or 2005.





ALL
      OTHER
      FEES





No
      such
      fees were paid to Stark Winter Schenkein & Co. in 2004 or 2005.





-34-





**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.








**NUTRA
      PHARMA CORP.**





/s/Rik
      J. Deitsch


Rik
      J.
      Deitsch, Chairman, President, Chief Executive Officer and Chief


Financial
      Officer





Dated:
      April 26, 2006








Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Registrant and in the
      capacities indicated.


Signature
              Title
              Date/s/
                  Rik
                  J. Deitsch
              Chairman
                  of the Board, President,
              April
                  26, 2006Rik
                  J. Deitsch
              Chief
                  Executive Officer andChief
                  Financial Officer/s/Stanley
                  Cherelstein
              Director
              April
                  26, 2006Stanley
                  Cherelstein/s/Stewart
                  Lonky
              Director
              April
                  26, 2006Stewart
                  Lonky/s/Tanvir
                  Khandaker
              Director
              April
                  26, 2006Tanvir
                  Khandaker








-35-




REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Stockholders
        and Board of Directors
 Nutra
        Pharma Corp.
 
 We
        have
        audited the accompanying consolidated balance sheet of Nutra Pharma Corp.
        (a
        Development Stage Company) as of December 31, 2005, and the related consolidated
        statements of operations, stockholders’ equity and cash flows for the years
        ended December 31, 2005 and 2004, and the period from inception (February
        1,
        2000) to December 31, 2005. These financial statements are the responsibility
        of
        the Company's management. Our responsibility is to express an opinion on
        these
        financial statements based on our audits. The Company’s financial statements for
        the period from inception (February 1, 2000) to December 31, 2003, were audited
        by other auditors whose report dated April 3, 2004, express an unqualified
        opinion and included a going concern paragraph on those financial statements.
        The financial statements for the period from inception (February 1, 2000)
        to
        December 31, 2003, reflect a net loss of $4,373,948 that is included in the
        related total for the period from inception (February 1, 2000) to December
        31,
        2005. The other auditors report has been furnished to us, and our opinion,
        insofar as it relates to the amounts included for such prior period, is based
        solely on the report of such other auditors.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audits to obtain reasonable assurance about whether the
        financial statements are free of material misstatement. An audit includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements. An audit also includes assessing the accounting
        principles used and significant estimates by management, as well as evaluating
        the overall financial statement presentation. We believe that our audits
        provide
        a reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Nutra Pharma Corp. (a Development
        Stage Company) as of December 31, 2005, and results of its operations and
        its
        cash flows for the years ended December 31, 2005 and 2004, in conformity
        with
        accounting principles generally accepted in the United States of
        America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 1 to the financial
        statements, the Company has incurred significant losses from operations and
        has
        a working capital deficit and no revenue generating operations. These factors
        raise substantial doubt about the Company’s ability to continue as a going
        concern. Management’s plans in regard to this matter are also discussed in Note
        1. The financial statements do not include any adjustments that might result
        from the outcome of this uncertainty.
 
 
 Stark
        Winter Schenkein & Co., LLP
 
 /s/Stark
        Winter Schenkein & Co., LLP
 
 
 Denver,
        Colorado
 April
        21,
        2006
 
 
 
 
 
 
 **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 To
        the
        Board of Directors and Stockholders of
 Nutra
        Pharma Corp.
 
 
 We
        have
        audited the accompanying consolidated statements of operations and cash flows
        of
        Nutra Pharma Corp. and its subsidiaries (the "Company"), a development stage
        company, for each of the periods from inception (February 1, 2000) through
        December 31, 2003, included in the December 31, 2005 cumulative
        amounts and not presented separately herein, and the consolidated statements
        of
        stockholders' equity for each of the periods from February 1, 2000 through
        December 31, 2003. These financial statements are the responsibility of the
        Company's management. Our responsibility is to express an opinion on these
        financial statements based on our audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated statements of operations and cash flows, for each
        of
        the periods from February 1, 2000 through December 31, 2003, not
        presented separately herein, and the statement of stockholders' equity for
        each
        of the periods from February 1, 2000 through December 31, 2003 present
        fairly, in all material respects, the results of operations and cash flows
        of
        Nutra Pharma Corp. and subsidiaries, for each of the periods from
        February 1, 2000 through December 31, 2003, in conformity with
        accounting principles generally accepted in the United States of
        America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        the
        Company will continue as a going concern. As discussed in Note 1 to the
        consolidated financial statements, the Company has experienced recurring
        net
        losses through December 31, 2003 that raises substantial doubt about the
        Company's ability to continue as a going concern. Management's plans with
        regard
        to these matters are described in Note 1. The consolidated financial
        statements do not include any adjustments that might result from outcome
        of this
        uncertainty.
 
 
 /s/Eisner
        LLP
 Eisner
        LLP
 
 New
        York,
        New York
 April 3,
        2004
  
 NUTRA
                    PHARMA CORP.(A
                    Development Stage Company)Consolidated
                    Balance SheetDecember
                    31, 2005
  ASSETSCurrent
                    assets:Cash
                
                $
                69,027Total
                    current assets
                
                
                69,027Property
                    and equipment, net
                
                
                51,240Other
                    assets
                
                
                14,674TOTAL
                    ASSETS
                
                $
                134,941LIABILITIES
                    AND STOCKHOLDERS' (DEFICIT)Current
                    liabilities:Accounts
                    payable
                
                $
                159,470Accrued
                    expenses
                
                
                396,281Due
                    to officers
                
                
                238,321Total
                    current liabilities
                
                
                794,072Stockholders'
                    (deficit):Common
                    stock, $0.001 par value, 2.0 billion sharesauthorized;
                    69,297,182 shares issued and outstanding
                
                
                69,297Additional
                    paid-in capital
                
                
                16,784,537(Deficit)
                    accumulated during the development stage
                
                
                (17,512,965
                )Total
                    stockholders' (deficit)
                
                
                (659,131
                )TOTAL
                    LIABILITIES AND STOCKHOLDERS' (DEFICIT)
                
                $
                134,941
 See
          the
          accompanying notes to the financial statements.
  F-1
  NUTRA
                    PHARMA CORP.(A
                    Development Stage Company)Consolidated
                    Statements of Operations
  For
                    thePeriod
                      FromFebruary
                    1,2000(Inception)ThroughYears
                      Ended December 31,
                
                December
                    31,2004
                
                
                2005
                
                
                2005Revenue
                
                $
                -
                
                $
                -
                
                $
                -Costs
                    and expenses:General
                    and administrative
                
                
                989,317
                
                
                1,567,941
                
                
                4,990,501Research
                    and development
                
                
                1,104,968
                
                
                224,349
                
                
                1,329,317General
                    and administrative - stock based compensation
                
                
                2,865,996
                
                
                2,855,190
                
                
                5,721,186Write-off
                    of advances to potential acquiree
                
                
                -
                
                
                -
                
                
                629,000Finance
                    costs
                
                
                -
                
                
                -
                
                
                786,000Interest
                    expense
                
                
                4,706
                
                
                269,684
                
                
                274,390Amortization
                    of license agreement
                
                
                -
                
                
                -
                
                
                155,210Amortization
                    of intangibles
                
                
                549,599
                
                
                -
                
                
                656,732Losses
                    on settlements
                
                
                955,069
                
                
                -
                
                
                1,261,284Write-down
                    of investment in subsidiary
                
                
                620,805
                
                
                -
                
                
                620,805Equity
                    in loss of unconsolidated subsidiary
                
                
                853,540
                
                
                -
                
                
                853,540Write-off
                    of investment in Portage BioMed
                
                
                -
                
                
                60,000
                
                
                60,000Write-off
                    of investment in Xenacare
                
                
                -
                
                
                175,000
                
                
                175,000Total
                    costs and expenses
                
                
                7,944,000
                
                
                5,152,164
                
                
                17,512,965Net
                    loss before provision (benefit) for income taxes
                
                
                (7,944,000
                )
                
                (5,152,164
                )
                
                (17,512,965
                )Provision
                    (benefit) for income taxes
                
                
                42,853
                
                
                -
                
                
                -Net
                    loss
                
                $
                (7,986,853
                )
                $
                (5,152,164
                )
                $
                (17,512,965
                )Per
                    share information - basic and dilutedLoss
                    per common share
                
                $
                (0.16
                )
                $
                (0.08
                )Weighted
                    average common shares outstanding
                
                
                50,927,076
                
                
                64,404,699
  See
          the
          accompanying notes to the financial statements.
  F-2
 NUTRA
                    PHARMA CORP.(A
                    Development Stage Company)Consolidated
                    Statements of Changes in Stockholders' (Deficit)Period
                    From Inception (February 1, 2000) to December 31,
                    2005
  DeficitAccumulatedAdditional
                
                During
                    theCommon
                
                Stock
                
                Paid-in
                
                DevelopmentShares
                
                Par
                    Value
                
                Capital
                
                Stage
                
                TotalCommon
                    stock issued to founders
                
                39,000,000
                
                $
                39,000
                
                $
                (37,050
                )
                $
                -
                
                $
                1,950Net
                    loss
                
                -
                
                
                -
                
                
                -
                
                
                (1,950
                )
                
                (1,950
                )Balance
                    - December 31, 2000
                
                39,000,000
                
                
                39,000
                
                
                (37,050
                )
                
                (1,950
                )Proceeds
                    from sale of common stock - $.025 per share
                
                1,000,000
                
                
                1,000
                
                
                24,000
                
                
                -
                
                
                25,000Common
                    stock issued in connection with acquisition - $.025 per
                    share
                
                4,500,000
                
                
                4,500
                
                
                108,000
                
                
                -
                
                
                112,500Net
                    loss
                
                -
                
                
                -
                
                
                -
                
                
                (67,504
                )
                
                (67,504
                )Balance
                    - December 31, 2001
                
                44,500,000
                
                
                44,500
                
                
                94,950
                
                
                (69,454
                )
                
                69,996Issuance
                    of common stock in exchange for services - $.30 to $1.50 per
                    share
                
                656,000
                
                
                656
                
                
                670,874
                
                
                -
                
                
                671,530Return
                    of common stock by principal stockholder
                
                (10,394,000
                )
                
                (10,394
                )
                
                10,394
                
                
                -Rescission
                    of common stock issued in acquisition - $.025 per share
                
                -
                
                
                -
                
                
                (112,500
                )
                
                -
                
                
                (112,500
                )Cancellation
                    of common stock issued in connection withrescission
                    of acquisition
                
                (2,037,500
                )
                
                (2,038
                )
                
                2,038
                
                
                -
                
                
                -Net
                    loss
                
                -
                
                
                -
                
                
                -
                
                
                (1,491,038
                )
                
                (1,491,038
                )Balance
                    - December 31, 2002
                
                32,724,500
                
                
                32,724
                
                
                665,756
                
                
                (1,560,492
                )
                
                (862,012
                )Issuance
                    of common stock in exchange for services - $.38 to $.76 per
                    share
                
                2,196,828
                
                
                2,197
                
                
                1,358,070
                
                
                -
                
                
                1,360,267Cancellation
                    of common stock issued in connection withrescission
                    of acquisition
                
                (2,055,000
                )
                
                (2,055
                )
                
                2,055
                
                
                -
                
                
                -Value
                    of common stock issued by stockholder to third partyin
                    connection with settlement - $.51 per share
                
                -
                
                
                -
                
                
                229,500
                
                
                -
                
                
                229,500Conversion
                    of stockholder loan into common stock - $.08 per share
                
                10,300,000
                
                
                10,300
                
                
                1,637,712
                
                
                -
                
                
                1,648,012Value
                    of common stock issued by stockholder to employeefor
                    services rendered - $.15 per share
                
                -
                
                
                -
                
                
                75,000
                
                
                -
                
                
                75,000Issuance
                    of common stock in connection with acquisition - $.85 per
                    share
                
                4,502,549
                
                
                4,503
                
                
                3,822,664
                
                
                
                
                
                3,827,167Common
                    stock deemed irretrievable in connection withrescission
                    of acquisition - $.11 per share
                
                -
                
                
                -
                
                
                23,375
                
                
                -
                
                
                23,375Net
                    loss
                
                -
                
                
                -
                
                
                -
                
                
                (2,813,456
                )
                
                (2,813,456
                )Balance
                    - December 31, 2003
                
                47,668,877
                
                
                47,669
                
                
                7,814,132
                
                
                (4,373,948
                )
                
                3,487,853Cancellation
                    of common stock issued in connection withrescission
                    of acquisition
                
                (199,000
                )
                
                (199
                )
                
                199
                
                
                -
                
                
                -Cancellation
                    of common stock issued in connection withsettlement
                    with third parties
                
                (120,000
                )
                
                (120
                )
                
                120
                
                
                -
                
                
                -Issuance
                    of common stock in connection with acquisition - $.85 per
                    share
                
                775,538
                
                
                776
                
                
                658,431
                
                
                -
                
                
                659,207Issuance
                    of common stock in exchange for services - $.24 to $.66 per
                    share
                
                4,054,200
                
                
                4,054
                
                
                2,061,942
                
                
                -
                
                
                2,065,996Issuance
                    of common stock for cash - $.17 to $.25 per share
                
                1,285,000
                
                
                1,285
                
                
                223,565
                
                
                -
                
                
                224,850Conversion
                    of convertible loans into common stock - $.16 per share
                
                595,067
                
                
                595
                
                
                97,405
                
                
                -
                
                
                98,000Common
                    shares subscribed for services - 2,000,000 shares at $.40
                
                -
                
                
                -
                
                
                800,000
                
                
                -
                
                
                800,000Common
                    shares subscribed for cash - 4,105,000 shares at $.17
                
                -
                
                
                -
                
                
                697,850
                
                
                -
                
                
                697,850Net
                    loss
                
                -
                
                
                -
                
                
                -
                
                
                (7,986,853
                )
                
                (7,986,853
                )Balance
                    - December 31, 2004
                
                54,059,682
                
                
                54,060
                
                
                12,353,644
                
                
                (12,360,801
                )
                
                46,903Issuance
                    of shares subscribed for at December 31, 2004
                
                6,105,000
                
                
                6,105
                
                
                (6,105
                )
                
                -
                
                
                -Issuance
                    of common stock for cash - $.17 to $.20 per share
                
                5,667,500
                
                
                5,668
                
                
                1,104,132
                
                
                -
                
                
                1,109,800Issuance
                    of common stock in exchange for services - $.26 to $.37 per
                    share
                
                2,007,000
                
                
                2,006
                
                
                716,499
                
                
                -
                
                
                718,505Issuance
                    of common stock for loan repayment and interest - $.33 per
                    share
                
                1,458,000
                
                
                1,458
                
                
                479,682
                
                
                -
                
                
                481,140Issuance
                    of common stock by Receptpharm in exchange for services
                
                -
                
                
                -
                
                
                636,685
                
                
                -
                
                
                636,685Value
                    of stock warrants issued to a consultant
                
                -
                
                
                -
                
                
                1,500,000
                
                
                -
                
                
                1,500,000Net
                    loss
                
                -
                
                
                -
                
                
                -
                
                
                (5,152,164
                )
                
                (5,152,164
                )Balance
                    - December 31, 2005
                
                69,297,182
                
                $
                69,297
                
                $
                16,784,537
                
                $
                (17,512,965
                )
                $
                (659,131
                )
  See
          the
          accompanying notes to the financial statements.
 F-3
 NUTRA
                    PHARMA CORP.(A
                    Development Stage Company)Consolidated
                    Statements of Cash Flows
 For
                      the Period
                    FromFebruary
                      1, 2000(Inception)Years
                    EndedThroughYears
                    Ended December 31,
                
                December
                    31,2004
                
                2005
                
                2005Cash
                    flows from operating activities:Net
                    loss
                $
                (7,986,853
                )
                $
                (5,152,164
                )
                $
                (17,512,965
                )Adjustments
                    to reconcile net loss to netcash
                    used in operating activities:Deferred
                    taxes
                
                42,853
                
                
                -
                
                
                -Amortization
                    of intangibles
                
                549,599
                
                
                -
                
                
                656,732Amortization
                    of license agreement
                
                -
                
                
                -
                
                
                155,210Depreciation
                
                4,867
                
                
                37,184
                
                
                42,051Write-off
                    of advances to potential acquiree
                
                -
                
                
                -
                
                
                629,000Stock-based
                    compensation
                
                2,865,996
                
                
                2,855,190
                
                
                7,829,933Finance
                    costs in connection with conversion ofstockholder
                    loan into common stock
                
                -
                
                
                -
                
                
                786,000Expenses
                    paid by stockholder
                
                355,000
                
                
                -
                
                
                474,140Losses
                    on settlements
                
                955,069
                
                
                -
                
                
                1,261,284Write-down
                    of investment in Infectech, Inc.
                
                620,805
                
                
                -
                
                
                620,805Equity
                    in loss of unconsolidated subsidiary
                
                853,540
                
                
                -
                
                
                853,540Write-down
                    of investment in Portage BioMed
                
                -
                
                
                60,000
                
                
                60,000Write-down
                    of investment in Xenacare
                
                -
                
                
                175,000
                
                
                175,000Non-cash
                    interest expense
                
                -
                
                
                269,684
                
                
                269,684Changes
                    in operating assets and liabilities:(Increase)
                    decrease in other assets
                
                (20,011
                )
                
                5,337
                
                
                (14,674
                )Increase
                    (decrease) in accounts payable
                
                126,602
                
                
                15,362
                
                
                167,609Increase
                    (decrease) in accrued expenses
                
                120,219
                
                
                204,930
                
                
                400,987Net
                    cash (used in) operating activities
                
                (1,512,314
                )
                
                (1,529,477
                )
                
                (3,145,664
                )Cash
                    flows from investing activities:Cash
                    reduction due to deconsolidation of Infectech
                
                (2,997
                )
                
                -
                
                
                (2,997
                )Cash
                    acquired in acquisition of Infectech
                
                -
                
                
                -
                
                
                3,004Acquisition
                    of property and equipment
                
                (57,091
                )
                
                (29,049
                )
                
                (86,140
                )Investments
                    carried at cost
                
                (105,000
                )
                
                (130,000
                )
                
                (235,000
                )Net
                    cash used in investing activities
                
                (165,088
                )
                
                (159,049
                )
                
                (321,133
                )Cash
                    flows from financing activities:Common
                    stock issued for cash
                
                922,700
                
                
                1,109,800
                
                
                2,057,500Proceeds
                    from convertible loans
                
                304,750
                
                
                -
                
                
                304,750Loans
                    from stockholders
                
                812,253
                
                
                238,321
                
                
                1,173,574Net
                    cash provided by financing activities
                
                2,039,703
                
                
                1,348,121
                
                
                3,535,824Net
                    increase in cash
                
                362,301
                
                
                (340,405
                )
                
                69,027Cash
                    - beginning of period
                
                47,131
                
                
                409,432
                
                
                -Cash
                    - end of period
                $
                409,432
                
                $
                69,027
                
                $
                69,027Supplemental
                    Cash Flow Information:Cash
                    paid for interest
                $
                -
                
                $
                -
                
                $
                -Cash
                    paid for income taxes
                $
                -
                
                $
                -
                
                $
                -Non-cash
                    investing and financing activities:Assumption
                    of obligation under license agreement
                $
                -
                
                $
                -
                
                $
                1,750,000Value
                    of shares issued as consideration inacquisition
                    of Nutra Pharma, Inc.
                $
                -
                
                $
                -
                
                $
                112,500Payments
                    of license fee obligation by stockholder
                $
                -
                
                $
                -
                
                $
                208,550Conversion
                    of stockholder loan to common stock
                $
                -
                
                $
                -
                
                $
                862,012Loan
                    advances to Bio Therapeutics, Inc.by
                    stockholder
                $
                -
                
                $
                -
                
                $
                629,000Value
                    of common stock issued as considerationin
                    acquisition of Infectech, Inc.
                $
                659,207
                
                $
                -
                
                $
                4,486,375Liabilities
                    assumed in acquisition of Nanologix, Inc.
                $
                -
                
                $
                -
                
                $
                115,586Cancellation
                    of common stock
                $
                319
                
                $
                -
                
                $
                14,806Value
                    of common stock issued by stockholderto
                    third party in connection with settlement
                $
                -
                
                $
                -
                
                $
                229,500Value
                    of common stock issued by stockholderto
                    employee for services rendered
                $
                -
                
                $
                -
                
                $
                75,000Net
                    deferred taxes recorded in connectionwith
                    acquisition
                $
                407,753
                
                $
                -
                
                $
                967,586Notes
                    payable settled with common stock
                $
                98,000
                
                $
                -
                
                $
                98,000Settlement
                    of stockholder loan in exchangefor
                    common stock of subsidiary
                $
                1,384,931
                
                $
                -
                
                $
                1,384,931Settlement
                    of debt with common stock
                $
                -
                
                $
                206,750
                
                $
                206,750Expenses
                    paid by stockholder
                $
                -
                
                $
                -
                
                $
                119,140
  See
          the
          accompanying notes to the financial statements.
 F-4
  **NUTRA
        PHARMA CORP.**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **December
        31, 2005**
 
 1.   
        BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES
 
 *Organization*
 
 Nutra
        Pharma Corp., a development stage company ("Nutra Pharma" or "the Parent")
        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.
 
 *Basis
        of Presentation*
 
 The
        Company's 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 significant losses from operations aggregating
        $5,152,164 and $7,986,853 for the years ended December 31, 2005 and 2004,
        and an
        accumulated deficit of $17,512,965 for the period from inception to December
        31,
        2005. In addition, the Company had a working capital and stockholders’ deficits
        at December 31, 2005, of $725,045 and $659,131 respectively and has no revenue
        generating operations.
 
 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 financing for its operations and seeking additional
        investments. In addition, the Company is seeking to establish a revenue
        base.
 Failure
        to secure such 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.
 
 *Principles
        of Consolidation*
 
 The
        consolidated financial statements presented herein include the accounts of
        Nutra
        Pharma and its subsidiary Receptopharm, Inc. (collectively, the "Company").
        In
        addition, the Company consolidated Nanologix, Inc. (formerly known as
        "Infectech, Inc.") during the period from October 31, 2003, through September
        28, 2004 (see Note 3). All intercompany transactions and balances have been
        eliminated in consolidation.
 
 *Use
        of Estimates*
 
 The
        accompanying financial statements are prepared in accordance with accounting
        principles generally accepted in the United States of America which require
        management to make 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. Actual results may differ from
        these estimates.
 
 
 F-5
 
 
 *Revenue
        Recognition*
 
 In
        general, the Company will record 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. The following policies reflect specific
        criteria for the various revenues streams of the Company:
 
 Revenue
        will be recognized at the time the product is delivered. Provision for sales
        returns will be estimated based on the Company's historical return experience.
        Revenue will be presented net of returns.
 
 *Cash
        and Cash Equivalents*
 
 The
        Company considers all highly liquid investments with an original maturity
        of
        three months or less to be cash equivalents.
 
 *Fair
        Value of Financial Instruments*
 
 Fair
        value estimates discussed herein are based upon certain market assumptions and
        pertinent information available to management as of December 31, 2005. The
        respective carrying value of certain on-balance-sheet financial instruments,
        approximate their fair values. These financial instruments include cash,
        accounts payable, accrued expenses and due to officers. Fair values were
        assumed
        to approximate carrying values for these financial instruments because they
        are
        short term in nature and their carrying amounts approximate fair values or
        they
        are receivable or payable on demand.
 
 *Property
        and Equipment*
 
 Property
        and equipment is recorded at cost. Expenditures for major improvements and
        additions are added to the property and equipment accounts while replacements,
        maintenance and repairs, which do not extend the life of the assets, are
        expensed.
 
 Depreciation
        and amortization are computed by using the straight-line method over the
        estimated useful lives of the assets. The estimated useful lives are summarized
        as follows:
  Furniture
                  and equipment
              
              
              5
                  to 7 yearsAutomotive
                  equipment
              
              
              5
                  yearsLeasehold
                  improvements
              
              
              3
                  yearsProperty
                and equipment consists of the following:Automotive
                  equipment
              
              $
              7,500Furniture
                  and equipment
              
              
              32,579Leasehold
                  improvements
              
              
              58,67098,749Less:
                  accumulated depreciation
              
              
              (47,509
              )$
              51,240
 
 Depreciation
        charged to operations aggregated $37,184 and $4,867 during 2005 and 2004
        respectively.
 
 *Long
        Lived Assets*
 
 The
        carrying value of long-lived assets is reviewed on a regular basis for the existence
        of facts and circumstances that suggest impairment. Should there be an
        impairment, the Company measures 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 from the
        impaired assets.
 
 F-6
 During
        the year ended December 31, 2004, the Company recorded an impairment charge
        related to its investment in Nanologix, Inc. in the amount of $620,805 (see
        Note
        3).
 
 *Research
        and Development*
 
 Research
        and development is charged to operations as incurred.
 
 *Income
        Taxes*
 
 The
        Company follows SFAS 109 "Accounting for Income Taxes" for recording the provision
        for income taxes. Deferred tax assets and liabilities are computed based
        upon
        the difference between the financial statement and income tax basis of
        assets
        and liabilities using the enacted marginal tax rate applicable when the
        related asset or liability is expected to be realized or settled. Deferred income
        tax expenses or benefits are based on the changes in the asset or liability
        each
        period. If available evidence suggests that it is more likely than
        not
        that some portion or all of the deferred tax assets will not be realized,
        a
        valuation allowance is required to reduce the deferred tax assets to the
        amount
        that is more likely than not to be realized. Future changes in such valuation
        allowance are included in the provision for deferred income taxes in the
        period
        of change.
 
 *Loss
        per Share*
 
 The
        Company calculates net income (loss) per share as required by Statement of Financial
        Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings (loss)
        per share is calculated by dividing net income (loss) by the weighted average
        number of common shares outstanding for the period. Diluted earnings (loss)
        per
        share is calculated by dividing net income (loss) by the weighted average
        number of common shares and dilutive common stock equivalents outstanding.
        During periods in which the Company incurs losses common stock
 equivalents,
        if any, are not considered, as their effect would be anti dilutive.
 
 *Stock-Based
        Compensation*
 
 The
        Company accounts for equity instruments issued to employees for services based
        on
        the fair value of the equity instruments issued and accounts for equity
        instruments issued to other than employees based on the fair value of the
        consideration received or the fair value of the equity instruments, whichever
        is
        more reliably measurable.
 
 The
        Company accounts for stock based compensation in accordance with SFAS 123, "Accounting
        for Stock-Based Compensation." The provisions of SFAS 123 allow companies
        to either expense the estimated fair value of stock options or to continue
        to follow the intrinsic value method set forth in APB Opinion 25, "Accounting
        for Stock Issued to Employees" (APB 25) but disclose the pro forma effects
        on net income (loss) had the fair value of the options been expensed. The
        Company has elected to continue to apply APB 25 in accounting for its stock option
        plans.
 
 *Equity
        Method*
 
 Investments
        in entities in which the Company has a 20% to 50% interest are carried
        at cost, adjusted for the Company's proportionate share of the undistributed
        income (loss) (see Note 3).
 
 *Recent
        Accounting Pronouncements*
 
 In
        November 2004, the FASB issued SFAS 151, "Inventory Costs." SFAS 151 amends the
        accounting for abnormal amounts of idle facility expense, freight, handling costs,
        and wasted material (spoilage) under the guidance in ARB 43, Chapter 4, "Inventory
        Pricing." Paragraph 5 of ARB 43, Chapter 4, previously stated that "...under
        some circumstances, items such as idle facility expense, excessive spoilage,
        double freight, and rehandling costs may be so abnormal as to require treatment
        as current period charges...." This Statement requires that those items be
        recognized as current-period charges regardless of whether they meet the
        criterion of "so abnormal." In addition, this Statement requires that allocation
        of fixed production overheads to the costs of conversion be based on the
        normal
        capacity of the production facilities. This statement is effective for inventory
        costs incurred during fiscal years beginning after June 15, 2005. Management
        does not expect adoption of SFAS 151 to have a material impact on the Company's
        financial statements.
 
 F-7
 
 In
        December 2004, the FASB issued SFAS 123(R), "Share-Based Payment." SFAS 123(R)
        amends SFAS 123, "Accounting for Stock-Based Compensation," and APB Opinion
        25,
        "Accounting for Stock Issued to Employees." SFAS 123(R) requires that the
        cost
        of share-based payment transactions (including those with employees and
        non-employees) be recognized in the financial statements. SFAS 123(R) applies
        to
        all share-based payment transactions in which an entity acquires goods or
        services by issuing (or offering to issue) its shares, share options, or
        other
        equity instruments (except for those held by an ESOP) or by incurring
        liabilities (1) in amounts based (even in part) on the price of the entity's
        shares or other equity instruments, or (2) that require (or may require)
        settlement by the issuance of an entity's shares or other equity instruments.
        This statement became effective for the Company on January 1, 2006.
 
 In
        December 2004, the FASB issued SFAS 153 "Exchanges of Non monetary Assets
        - an
        amendment of APB Opinion No. 29". This Statement amended APB Opinion 29 to
        eliminate the exception for non-monetary exchanges of similar productive
        assets
        and replaces it with a general exception for exchanges of non-monetary assets
        that do not have commercial substance. A non- monetary exchange has commercial
        substance if the future cash flows of the entity are expected to change
        significantly as a result of the exchange. The adoption of this Standard
        is not
        expected to have any material impact on the Company's financial position,
        results of operations or cash flows.
 
 In
        March
        2005, the Securities and Exchange Commission (SEC) issued Staff Accounting
        Bulletin No.107 (SAB 107) which provides guidance regarding the interaction
        of
        SFAS 123(R) and certain SEC rules and regulations. The new guidance includes
        the
        SEC's view on the valuation of share-based payment arrangements for public
        companies and may simplify some of SFAS 123(R)’s implementation challenges for
        registrants and enhance the information investors receive.
 
 In
        March
        2005, the FASB issued FIN 47, Accounting for Conditional Asset Retirement
        Obligations, which clarifies that the term 'conditional asset retirement
        obligation’ as used in SFAS 143, Accounting for Asset Retirement Obligations,
        refers to a legal obligation to perform an asset retirement activity in which
        the timing and/or method of settlement are conditional on a future event
        that
        may or may not be within the control of the entity. FIN 47 requires an entity
        to
        recognize a liability for the fair value of a conditional asset retirement
        obligation if the fair value can be reasonably estimated. FIN 47 is effective
        no
        later than the end of the fiscal year ending after December 15, 2005. The
        Company does not believe that FIN 47 will have a material impact on its
        financial position or results from operations.
 
 In
        August
        2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections.
        This
        statement applies to all voluntary changes in accounting principle and to
        changes required by an accounting pronouncement if the pronouncement does
        not
        include specific transition provisions, and it changes the requirements for
        accounting for and reporting them. Unless it is impractical, the statement
        requires retrospective application of the changes to prior periods’ financial
        statements. This statement is effective for accounting changes and correction
        of
        errors made in fiscal years beginning after December 15, 2005.
 
 
 F-8
 
 New
        pronouncements
 
 SFAS
        155
        - ‘Accounting for Certain Hybrid Financial Instruments—an amendment of FASB
        Statements No. 133 and 140’
 
 This
        Statement, issued in February 2006, amends FASB Statements No. 133, Accounting
        for Derivative Instruments and Hedging Activities, and No. 140, Accounting
        for
        Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
        This Statement resolves issues addressed in Statement 133 Implementation
        Issue
        No. D1, “Application of Statement 133 to Beneficial Interests in Securitized
        Financial Assets.”
 
 This
        Statement:
  a.
              Permits
                  fair value remeasurement for any hybrid financial instrument that
                  contains
                  an embedded derivative that otherwise would require
                  bifurcation
 b.
              Clarifies
                  which interest-only strips and principal-only strips are not subject
                  to
                  the requirements of Statement 133
 c.
              Establishes
                  a requirement to evaluate interests in securitized financial assets
                  to
                  identify interests that are freestanding derivatives or that are
                  hybrid
                  financial instruments that contain an embedded derivative requiring
                  bifurcation
 d.
              Clarifies
                  that concentrations of credit risk in the form of subordination
                  are not
                  embedded derivatives
 e.
              Amends
                  Statement 140 to eliminate the prohibition on a qualifying special-purpose
                  entity from holding a derivative financial instrument that pertains
                  to a
                  beneficial interest other than another derivative financial
                  instrument.
 
 This
        Statement is effective for all financial instruments acquired or issued after
        the beginning of our first fiscal year that begins after September 15,
        2006.
 
 The
        fair
        value election provided for in paragraph 4(c) of this Statement may also
        be
        applied upon adoption of this Statement for hybrid financial instruments
        that
        had been bifurcated under paragraph 12 of Statement 133 prior to the adoption
        of
        this Statement. Earlier adoption is permitted as of the beginning of our
        fiscal
        year, provided we have not yet issued financial statements, including financial
        statements for any interim period, for that fiscal year. Provisions of this
        Statement may be applied to instruments that we hold at the date of adoption
        on
        an instrument-by-instrument basis.
 
 The
        Company is currently reviewing the effects of adoption of this statement
        but it
        is not expected to have a material impact on our financial statements. SFAS
        156
        - ‘Accounting for Servicing of Financial Assets—an amendment of FASB Statement
        No. 140’
 This
        Statement, issued in March 2006, amends FASB Statement No. 140, Accounting
        for
        Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,
        with respect to the accounting for separately recognized servicing assets
        and
        servicing liabilities. This Statement:
 
 1.
              Requires
                  an entity to recognize a servicing asset or servicing liability
                  each time
                  it undertakes an obligation to service a financial asset by entering
                  into
                  a servicing contract in certain
                  situations.
 2.
              Requires
                  all separately recognized servicing assets and servicing liabilities
                  to be
                  initially measured at fair value, if
                  practicable.
  F-9
  3.
              Permits
                  an entity to choose either the amortization method or the fair
                  value
                  measurement method for each class of separately recognized servicing
                  assets and servicing liabilities.
 4.
              At
                  its initial adoption, permits a one-time reclassification of
                  available-for-sale securities to trading securities by entities
                  with
                  recognized servicing rights, without calling into question the
                  treatment
                  of other available-for-sale securities under Statement 115, provided
                  that
                  the available-for-sale securities are identified in some manner
                  as
                  offsetting the entity’s exposure to changes in fair value of servicing
                  assets or servicing liabilities that a servicer elects to subsequently
                  measure at fair value.
 5.
              Requires
                  separate presentation of servicing assets and servicing liabilities
                  subsequently measured at fair value in the statement of financial
                  position
                  and additional disclosures for all separately recognized servicing
                  assets
                  and servicing liabilities.
 
 Adoption
        of this Statement is required as of the beginning of the first fiscal year
        that
        begins after September 15, 2006. The adoption of this statement is not expected
        to have a material impact on our financial statements.
 
 
 2.
        ACQUISITIONS, JOINT VENTURE AND RESCISSIONS
 
 *Acquisition
        of Nutra Pharma, Inc.*
 
 On
        November 23, 2001, the Company acquired 100% of the issued and outstanding common
        stock of Nutra Pharma, Inc. ("NPI"), a privately held company, from its sole
        stockholder, pursuant to an agreement and plan for exchange of common stock.
        NPI was formed on May 3, 2001 under the laws of the State of Nevada and at
        the
        time of this acquisition, its only asset was an exclusive worldwide license
        agreement (the "License Agreement") to distribute a medicinal compound. The
        principal products that were intended to be developed from this medicinal compound
        were products designed to treat and heal open wounds and other skin disorders
        such as acne and psoriasis. NPI was a development stage company, as it had
        not
        realized any revenue from the date of its inception on May 3, 2001 through
        the date that it was acquired by the Company.
 
 The
        Company issued 4,500,000 shares of its restricted common stock to NPI's sole
        stockholder, in exchange for the outstanding common stock of NPI. At the
        time of
        the acquisition, NPI owed $1,750,000 to Terra BioPharma, S.A. ("TBPH"), a
        Panamanian company, as the licensor under the License Agreement. The term
        of the
        License Agreement was for a period of five (5) years commencing in May 2001.
        Payments to TBPH under the License Agreement were to be made in installments
        through May 2003.
 
 This
        acquisition was accounted for as the purchase of a license. The Company valued
        the shares issued in this transaction at $0.025 per share, the price at which
        the
        Company sold shares of its common stock in a self-underwritten public offering
        in May 2001, for a total value of $112,500. The Company recorded the cost
        of
        the license at $1,862,500, which was equal to the $1,750,000 owed to TBPH
        plus
        the $112,500 value of the 4,500,000 shares issued.
 
 *Joint
        Venture with Terra BioPharma*
 
 On
        January 30, 2002, the Company entered into a Joint Venture Agreement (the
        "JV
        Agreement") with TBPH, whereby it acquired a 50% ownership interest in a
        newly
        formed Panamanian company called Terra Nutra, S.A. ("Terra Nutra"). This
        JV
        Agreement superseded the License Agreement between TBPH and NPI. The purpose
        of
        the joint venture was to patent the raw material composition, manufacturing
        process and various uses of the medicinal compound that was the subject of
        the
        License Agreement between TBPH and NPI. Pursuant to the JV Agreement, the
        parties agreed that the patent for the raw material composition and the patent
        for the manufacturing process would be owned by TBPH. Terra Nutra would own
        all
        future patents for all subsequent uses and products.
 
 F-10
 As
        part
        of the JV Agreement, the Company agreed to pay $1,740,000 to TBPH to secure
        the
        exclusive, worldwide distribution rights to all products derived from the
        medicinal compound. This sum was to be paid in monthly installments of varying
        amounts over a sixteen (16) month period beginning in July 2002. The Company
        also agreed to pay all costs associated with purchasing and developing the
        land
        that was to be used for growing the raw material that was required to produce
        the medicinal compound, the costs associated with the construction of a
        manufacturing plant used to process the raw material and the costs associated
        with clinical trials and patent applications. The JV Agreement acknowledged
        that
        amounts paid toward these costs would be deducted from the amounts owing
        under
        the License Agreement. The Company also agreed to pay a 3% royalty to TBPH
        on
        gross sales from any product ultimately derived from the medicinal
        compound.
 
 *Rescission
        of Acquisition of Nutra Pharma Inc., and Joint Venture with
        Terra*
 *BioPharma*
 
 On
        May
        14, 2002, the Company notified TBPH of its intent to rescind the JV Agreement.
        The Company also notified NPI's sole stockholder of its intent to rescind
        the
        NPI Agreement to recover the 4,500,000 shares that were issued to NPI's sole
        stockholder in connection with the November 23, 2001 NPI Agreement. The Company
        also notified certain other stockholders holding a portion of the 4,500,000
        shares of common stock (the "Individual Stockholders") that had received
        shares
        through a transfer from NPI's sole stockholder. The notifications specified
        that
        the Company had rescinded the NPI Agreement and had instructed its transfer
        agent to place a stop transfer on all stock certificates that represented
        the
        4,500,000 shares issued in connection with the NPI Agreement.
 
 On
        October 23, 2002, the Company received a total of 2,037,500 shares of its
        common
        stock from a group that included NPI's sole stockholder and other Individual
        Stockholders. These shares were cancelled and returned to the Company's
        Treasury.
 
 On
        December 23, 2002, the Company, and NPI's sole stockholder agreed to rescind
        the
        NPI Agreement dated November 23, 2001. Pursuant to a Rescission, Settlement
        and
        Release Agreement, NPI's sole stockholder agreed to facilitate the return
        of
        2,092,500 of the 4,500,000 shares of common stock that were issued by the
        Company in connection with the NPI Agreement. Of the 2,092,500 shares, 2,037,500
        were previously returned on October 23, 2002. As part of this Rescission
        Agreement, upon the receipt by the Company of the additional 55,000 shares,
        NPI's sole stockholder would receive 450,000 shares of common stock directly
        from an existing stockholder who was also an Officer and Director of the
        Company.
 
 On
        January 17, 2003, the Company received a total of 55,000 shares of its common
        stock from three Individual Stockholders. These shares were cancelled and
        returned to the Company's Treasury.
 
 On
        February 10, 2003, the Company received 1,000,000 shares of its common stock
        from an Individual Stockholder. These shares were cancelled and returned
        to
        Treasury.
 
 On
        June
        19, 2003, the Company received 1,000,000 shares of its common stock from
        an
        Individual Stockholder. These shares were cancelled and returned to
        Treasury.
 
 On
        January 21, 2004, the Company received 150,000 shares of its common stock
        from
        an Individual Stockholder. These shares were cancelled and returned to
        Treasury.
 
 On
        February 23, 2004, the Company received 30,000 shares of its common stock
        from
        an Individual Stockholder. These shares were cancelled and returned to
        Treasury.
 
 F-11
 
 At
        March
        31, 2004, the Company had an agreement in place to recover an additional
        15,000
        shares from an Individual Stockholder. Upon the return of those shares in
        August
        2004, a total of 4,287,500 of the 4,500,000 shares originally issued to NPI's
        sole stockholder have been returned. The remaining 212,500 shares were deemed
        by
        the Company to be irretrievable, and accordingly, the Company recorded a
        charge
        to operations of $23,375 in 2003 for these shares.
 
 On
        May
        19, 2004, the Company received 4,000 shares of its common stock from an
        Individual Stockholder. These shares were cancelled and returned to Treasury.
        The Company had previously included these 4,000 shares as part of the 212,500
        shares that it deemed to irretrievable.
 
 In
        connection with these transactions, the Company recorded a loss on settlement
        of
        $53,340 in 2002, representing the write-off of the carrying value of the
        unamortized license agreement of $1,707,290, the cancellation of the remaining
        obligation to TBPH of $1,541,450 and the reduction to additional paid-in
        capital
        for the value of the common shares issued to NPI's sole stockholder of $112,500.
        Common shares received subsequent thereto have been cancelled and reflected
        as a
        reduction in the par value of common stock and a corresponding increase in
        additional paid-in capital. In addition, the 450,000 common shares transferred
        to NPI's sole stockholder by a stockholder of the Company was valued at market
        value of $229,500 on the date of transfer and has been recorded as a charge
        to
        operations in 2003 with a corresponding increase to additional paid-in
        capital.
 
 *Failed
        Acquisition of Bio Therapeutics, Inc.:*
 
 On
        May
        30, 2002, the Company entered into a definitive agreement (the "Share Exchange
        Agreement") to acquire 100% of the issued and outstanding common stock of
        Bio
        Therapeutics, Inc. ("Bio Therapeutics"), a privately held Florida corporation.
        Pursuant to this Share Exchange Agreement, the Company was obligated to issue
        11,137,139 shares of common stock in exchange for an equal number of shares
        of
        Bio Therapeutics, which represented 100% of the issued and outstanding common
        stock of Bio Therapeutics. The Share Exchange Agreement also contained a
        provision that in the event the Company's common stock was trading below
        $2.40
        on the closing date, the Company would be obligated to issue additional shares
        of its common stock to the stockholders of Bio Therapeutics in order to ascribe
        a final value of $2.40 for each share of Bio Therapeutics stock. In addition,
        as
        part of this Share Exchange Agreement, the Company agreed to loan Bio
        Therapeutics up to $500,000 for working capital purposes. The closing of
        this
        transaction was contingent upon the Company raising a minimum of $1,500,000
        through a private placement of its common stock. The Share Exchange Agreement
        also provided that the shares of the Company and the shares Bio Therapeutics
        that are being exchanged would be held by an escrow agent, who would hold
        all of
        the subject shares, and release them to the respective parties, only upon
        receiving written proof that the Company had successfully raised a minimum
        of
        $1,500,000.
 
 On
        August
        12, 2002, the Company entered into a Closing Agreement for the Exchange of
        Common Stock (the "Closing Agreement"), which amended the Share Exchange
        Agreement between the parties. The Closing Agreement stipulated that: (i)
        the
        Company had satisfied its obligation to loan up to $500,000 to Bio Therapeutics,
        and (ii) the closing shall take place in two phases. In connection with the
        First Closing, the Company was obligated to issue 11,130,889 shares of its
        common stock in exchange for an equal amount of Bio Therapeutics common stock,
        which represented 100% of the issued and outstanding common stock of Bio
        Therapeutics. All share certificates to be issued by each party would be
        issued
        to a Trustee who would hold the shares until the Final Closing. The Final
        Closing was contingent upon the Company raising a minimum of $1,500,000 through
        a private placement of its common stock.
 
 On
        September 27, 2002, the parties further amended the Closing Agreement as
        follows: (i) the number of shares to be issued by the Company in exchange
        for
        100% of the issued and outstanding shares of Bio Therapeutics is now 1,790,889,
        and (ii) in the event that the Company's common stock was trading below $1.20
        on
        the closing date, the Company would be obligated to issue additional shares
        of
        its common stock to the shareholders of Bio Therapeutics in order to ascribe
        a
        final value of $1.20 for each share of Bio Therapeutics stock.
 
 F-12
 As
        of
        December 31, 2002, the Company had written off its loan receivable balance
        of
        $629,000, due to uncertainty about the extent and timing of
        collection.
 
 On
        April
        23, 2003, Bio Therapeutics withdrew from and terminated the Share Exchange
        Agreement due to the fact that the Company had been unsuccessful in raising
        the
        minimum amount of $1,500,000 through a private placement of its common stock.
        Upon the termination of the Share Exchange Agreement, the Trustee returned
        certificates representing a total of 9,156,961 shares of the Company's common
        stock to the Company for cancellation. The Trustee returned an equal amount
        of
        Bio Therapeutics stock to Bio Therapeutics's legal counsel. The number of
        shares
        returned by the Trustee to the Company and Bio Therapeutics in connection
        with
        the termination of the Share Exchange Agreement represented 100% of the shares
        issued by each party.
  On
        May
        21, 2003, the Company commenced legal proceedings against Bio Therapeutics
        in
        order to collect amounts owing under the loan that the Company made to Bio
        Therapeutics in connection with the Share Exchange Agreement.
 
 On
        November 14, 2003, the Company entered into a final Settlement Agreement
        (the
        "Settlement") with Bio Therapeutics. The Settlement provided for the dismissal
        of the lawsuit that the Company initiated against Bio Therapeutics. The
        Settlement also provided the Company with a non-exclusive license to certain
        intellectual property of Bio Therapeutics, including patents and patents
        pending
        for the development of therapies for Multiple Sclerosis and HIV. Also as
        part of
        the Settlement, the Company agreed to extinguish the entire amount of the
        loan
        receivable from Bio Therapeutics. With respect to the license received in
        connection with the Settlement, the Company deemed it to have a nominal value
        as
        its fair market value was not readily ascertainable.
 
 3.
        NANOLOGIX, INC. (FORMERLY INFECTECH, INC.)
 
 On
        September 19, 2003, the Company entered into an agreement (“Acquisition
        Agreement”) to acquire up to 100% of the issued and outstanding common stock of
        Nanologix, Inc., a Delaware corporation (“Nanologix”). Nanologix is a
        development stage company based in Sharon, Pennsylvania, which is engaged
        in the
        development of diagnostic test kits used for the rapid identification of
        infectious human and animal diseases. Nanologix owns patented technologies,
        which allow for the rapid detection of disease-causing pathogens. Nanologix
        also
        owns a patented technology designed for use in the bioremediation of
        contaminated soil and water.
 
 The
        Acquisition Agreement provided for the acquisition by the Company of up to
        100%
        of the issued and outstanding common stock of Nanologix, through an exchange
        of
        one (1) share of the Company’s common stock for every two (2) shares
        of Nanologix common stock. The Company recorded the acquisition of Nanologix
        as
        the purchase of assets, principally patents and other intangibles. The value
        of
        the Company’s common stock issued in connection with this transaction was $0.85
        per share, which was the market value of the Company’s common stock on
        September 22, 2003, the date the terms of the acquisition were agreed to
        and announced.
 
 Through
        December 31, 2003, the Company issued an aggregate of 4,502,549 shares of
        its common stock in exchange for 9,005,098 shares of Nanologix common stock.
        This initial exchange resulted in the Company owning approximately 58% of
        the
        issued and outstanding common stock of Nanologix. In January 2004, the
        Company issued an additional 426,275 shares of its common stock, in exchange
        for
        852,550 shares of Nanologix common stock. In September 2004, the Company
        issued an additional 293,288 shares of its common stock in exchange for 586,576
        shares of Nanologix common stock. These exchanges increased the Company’s
        ownership interest in Nanologix from 58% to 67%.
 
 On
        September 28, 2004, the Company transferred 6,000,000 shares of Nanologix,
        Inc. common stock to a shareholder of Nutra Pharma, to discharge a $1,384,931
        demand loan from such shareholder. After giving effect to this transfer,
        the
        Company owned a total of 4,444,224 shares or approximately 29% of the issued
        and
        outstanding common stock of Nanologix (which was 15,537,050
        shares).
 
 F-13
 Subsequent
        to September 28, 2004, the Company owned a minority interest in Nanologix
        and accordingly, applied the equity method of accounting to its investment
        in
        Nanologix. The Company’s share of Nanologix’s earnings or losses is included in
        its statement of operations as a single amount. During the year ended
        December 31, 2004, Nanologix incurred a loss of $6,658,838. The Company’s
        portion of the loss using the equity method of accounting of $1,664,710 exceeded
        the carrying value of the Company’s investment which was $853,540 at
        December 31, 2004, and as such, the $853,540 was charged to operations at
        December 31, 2004. This charge reduced the carrying value of the Company’s
        investment in Nanologix to $0.
 
 At
        December 31, 2005, the Company owned a total of 4,556,174 shares of the
        issued and outstanding common stock of Nanologix. These shares were returned
        to
        Nanologix on January 25, 2006, (see below).
 
 The
        aggregate market value of the Company’s 4,556,174 shares of Nanologix common
        stock, based on the trading price of Nanologix common stock as quoted on
        the
        pink sheets of $.08 per share at December 31, 2005, was $364,494.
 
 On
        January 25, 2006, the Company and Nanologix entered into a definitive agreement
        pursuant to which Nanologix agreed to assign its ownership of 11 patents
        to the
        Company which protect Nanologix' infectious disease diagnostic test kit
        technology. Nanologix also granted the Company a license to utilize 18
        additional patents related to the diagnostic test kits. As consideration,
        the
        Company agreed to return 100% or 4,556,174 shares of common stock of Nanologix
        that it owned to Nanologix. In addition, the Company agreed to pay Nanologix
        a
        royalty of 6% of gross sales of any products that are developed which utilize
        any of the 29 licensed patents. The Company also issued Nanologix a five-year
        option to purchase 1,000,000 of the Company's common stock at an exercise
        price
        of $.20.
 
 4.
        ACQUISITION OF RECEPTOPHARM, INC.
 
 On
        December 12, 2003, the Company entered into an acquisition agreement (the
“Agreement”), whereby it agreed to acquire up to a 49.5% interest in
        ReceptoPharm, Inc. (“ReceptoPharm”), a privately held biopharmaceutical company
        based in Ft. Lauderdale, Florida. ReceptoPharm is a development stage company
        engaged in the research and development of proprietary therapeutic proteins
        for
        the treatment of several chronic viral, autoimmune and neuro-degenerative
        diseases.
 
 The
        closing of this transaction was subject to the approval of ReceptoPharm’s board
        of directors, which was obtained on February 20, 2004. Pursuant to the
        Agreement, the Company is acquiring its interest in ReceptoPharm’s common equity
        for $2,000,000 in cash which equates to a purchase price of $.45 per share.
        ReceptoPharm intends to use such funds to further research and development,
        which could significantly impact future results of operations.
 
 The
        Company is purchasing its interest in a series of installments. At December
        31,
        2005, the Company had funded an aggregate of $1,860,000 to ReceptoPharm under
        the Agreement, which represented a 37% interest in ReceptoPharm.
 
 In
        February 2006, the Company funded an additional $140,000 to ReceptoPharm
        thereby
        completing the $2,000,000 investment. The Company owns 4,444,445 shares or
        38%
        of the issued and outstanding common equity of ReceptoPharm.
 
 For
        accounting purposes, the Company is treating its capital investment in
        ReceptoPharm as a vehicle for research and development. Because the Company
        is
        solely providing financial support to further the research and development
        of
        ReceptoPharm, such amounts are being charged to expense as incurred by
        ReceptoPharm. ReceptoPharm presently has no ability to fund these activities
        and
        is dependent on the Company to fund its operations. In these circumstances,
        ReceptoPharm is considered a variable interest entity and has been consolidated.
        The creditors of ReceptoPharm do not have recourse to the general credit
        of the
        Company.
 
 F-14
  A
        summary
        of financial position and results of operations of Receptopharm is as
        follows:
  2005
              
              2004Current
                  assets
              
              $
              73,116
              
              $
              71,903Property
                  and equipment
              
              
              51,240
              
              
              59,375Other
                  assets
              
              
              8,133
              
              
              20,011$
              132,489
              
              $
              151,289Current
                  liabilities
              
              $
              561,095
              
              $
              224,003Stockholders'
                  deficit
              
              
              (428,606
              )
              
              (72,714
              )$
              132,489
              
              $
              151,289Sales
              
              $
              -
              
              $
              -Net
                  loss
              
              $
              (1,602,577
              )
              $
              (944,282
              )
 
 
 5.   
        SETTLEMENT OF DEMAND LOAN - STOCKHOLDER
 
 From
        inception to May 2004, the Company funded its ongoing operational costs through
        unsecured, non-interest bearing, demand loans from certain of its shareholders,
        which included loans from the Company's former Chairman of the Board, Zirk
        Engelbrecht. At June 30, 2004, the balance on the loan due to Mr. Engelbrecht
        was $1,384,931. On August 1, 2004, Mr. Engelbrecht assigned the loan to Opus
        International, LLC, a company that Mr. Engelbrecht claims is controlled by
        his
        wife, Marcy Engelbrecht. On or about August 9, 2004, a Managing Member of
        Opus
        International, LLC made a formal demand for repayment of the loan in the
        amount
        of $1,384,931.
 
 On
        September 28, 2004, the Company entered into a settlement agreement with
        Opus
        International, which provided for the following terms:
 
 o   
        The transfer of 6,000,000 shares of Nanologix common stock owned by the Company
        to Opus International, in full and fair settlement of the outstanding debt
        owed
        to Opus International.
 
 o   
        Upon the transfer of the Nanologix shares to Opus International, any and
        all
        outstanding debt that the Company owed to Opus International was deemed
        discharged and the Company was released from any and all liability regarding
        the
        debt.
 
 o   
        The Company accepted the resignation of Mitchell Felder and David C. McClelland
        as directors.
 
 In
        connection with the settlement, the Company recorded a loss of $955,069,
        representing the difference between the Company's carrying value per share
        of
        the Nanologix common stock and the value of the Nanologix common stock ascribed
        in the settlement which was $0.23 per share.
 
 6.   
        CONVERTIBLE LOANS
 
 In
        November 2004, in accordance with the terms of completed Subscription
        Agreements, the Company received total proceeds of $206,750 from four
        (4) investors. These
  F-15
 agreements
        provide that upon the expiration of a 6 month term from the date of
        execution, each of the four investors has the option of: (a) being repaid
        the amount of their investment together with 15% interest per annum; (b)
        converting their investment into shares of the Company’s common stock at a
        conversion price of $0.17 per share up to an aggregate of 1,216,176 shares,
        if
        all four investors convert; or (c) converting their investment into a number
        of
        shares of common stock of the Company equal to the sum of the principal and
        accrued interest on the note, divided by the conversion price equal to a
        price
        which is 35% below (i) the average of the last reported sales prices for
        the shares of Common Stock on the NASDAQ National Market, the American Stock
        Exchange, the NASDAQ Small Cap Market or the Over-the-Counter Bulletin Board
        for
        the 5 trading days immediately prior to such date or (ii) if there have
        been no sales on any such market on any applicable day, the average of the
        highest bid and lowest ask prices on such market at the end of any applicable
        day, or (iii) if the market value cannot be calculated as of such date on
        any of
        the foregoing bases, the Market Price will be at the fair market value as
        reasonably determined in good faith by our Board of Directors.
 
 Each
        investor had piggyback registration rights that would have required the Company
        to register any shares held by them if the Company voluntarily filed a
        registration statement, or immediately if an investor decided to convert
        their
        investment into shares of common stock.
 
 In
        May 2005, the loan holders amended their original agreements. The new
        agreements released the Company from its requirements to register the loan
        holders’ shares. Each loan holder received approximately ten percent in
        additional shares as part of the new agreement. In full settlement of the
        debt,
        the Company issued an aggregate of 1,458,000 shares of common stock to settle
        the debt. The fair value of these shares at the date of the settlement was
        $481,140. The Company recorded interest expense of $261,782 for the value
        of the
        shares in excess of the debt settled. (See Note 8.)
 
 
 7.   
        DUE TO OFFICERS
 
 During
        the year ended December 31, 2005, the Company borrowed $90,000 from its
        President, Rik Deitsch. This demand loan is unsecured and non-interest bearing.
        In addition, the Company's subsidiary Receptopharm borrowed an aggregate
        of
        $148,321 from its officers during the year ended December 31, 2005. These
        demand
        loans are unsecured and bear interest at a rate of 4.25%. Interest accrued
        to
        date aggregates $494.
 
 Subsequent
        to December 31, 2005 and through February 24, 2006, the Company borrowed
        an
        additional $233,375 from Rik Deitsch increasing the total amount owed under
        the
        demand loan to $323,375.
 
 8.   
        STOCKHOLDERS' DEFICIT
 
 On
        October 31, 2001, Nutra Pharma amended its articles of incorporation to increase
        the number of authorized shares of common stock from 100,000,000 to 2
        billion.
 
 On
        November 7, 2001, Nutra Pharma affected a 20-for-1 forward stock split which
        increased the total issued and outstanding shares of common stock from 2,000,000
        shares to 40,000,000 shares. All share and per share amounts have been
        retroactively adjusted for all periods presented to reflect the stock
        split.
 
 In
        May
        2001, the Company raised $25,000 through the sale of 1,000,000 shares of
        its
        common stock at a price of $0.025 per share in a self-underwritten initial
        public offering.
 
 In
        November 23, 2001, the Company issued 4,500,000 shares in connection with
        the
        acquisition of Nutra Pharma, Inc. (see Note 2 - Acquisitions, Joint Venture
        and
        Rescissions). The Company valued the 4,500,000 shares issued in this transaction
        at a price of $0.025 per share, for a total value of $112,500. The value
        of
        $0.025 per share was based on the price at which the Company sold shares
        of its
        common stock in an initial public offering in May 2001, the most recent cash
        transaction of its common stock.
 
 F-16
 On
        April
        23, 2002, the Company issued 1,000,000 shares of restricted common stock
        to a
        lender as collateral for a loan. The loan was never funded and the Company
        placed a stop transfer order on the stock certificate. The lender is currently
        in Chapter 11 Bankruptcy. These shares have not been reflected as issued
        and
        outstanding.
 
 On
        May
        23, 2002, a stockholder of the Company returned a total of 10,394,000 shares
        of
        common stock to the Company for cancellation. The Company did not pay any
        consideration to the stockholder. Accordingly, the Company adjusted
        stockholders' equity for the treasury shares with no cost.
 
 In
        2002,
        the Company issued a total of 656,000 shares of restricted common stock to
        various individuals and companies in exchange for services rendered. These
        issuances were made at various times throughout the year. The Company recorded
        stock-based compensation expense of $671,530 to reflect the fair market value
        of
        the common stock issued. Fair market value was based on the closing price
        of the
        Company's common stock on the date of each grant.
 
 On
        December 23, 2002, the Company rescinded the NPI Agreement dated November
        23,
        2001, pursuant to a Rescission, Settlement and Release Agreement. NPI's sole
        stockholder agreed to facilitate the return of 2,092,500 of the 4,500,000
        shares
        of common stock to the Company for cancellation. Subsequently, through December
        31, 2004, an additional 2,199,000 shares were returned to the Company by
        Individual Stockholders that received shares of common stock of the Company
        directly from NPI's sole stockholder. The
        remaining 208,500 shares are deemed by the Company to be irretrievable, and
        accordingly, the Company recorded a charge to operations of $23,375 for these
        shares in 2003. As
        part
        of this Rescission Agreement, NPI's sole stockholder received 450,000 shares
        of
        common stock directly from an existing stockholder who was also an Officer
        and
        Director of the Company. The Company recorded a charge to operations of $229,500
        in 2003 to reflect the value of the settlement for the benefit of the
        Company.
 
 In
        June
        2003, a stockholder of the Company transferred 500,000 shares of his common
        stock to the Company's President/Chief Executive Officer. Such shares were
        valued at $75,000, the fair market value on the date of the transfer, and
        the
        accompanying financial statements have been revised to reflect a charge to
        operations as compensation with a corresponding increase in additional
        paid-in-capital.
 
 On
        June 9, 2003, the Company converted a stockholder loan payable in the
        amount of $862,012, by issuing 10,300,000 shares of its restricted common
        stock.
 The conversion price of $0.08 represented a discount of approximately 50%
        from the fair market value of the common stock as measured by the closing
        price
        on the day prior to the conversion.  Accordingly, the Company recorded
        financing costs of $786,000 in connection with this transaction.
 
 In
        2003,
        the Company issued a total of 2,196,828 shares of restricted common stock,
        including 15,000 shares issued pursuant to the Company's Equity Compensation
        Plan to various individuals and companies in exchange for services rendered.
        Of
        this total, 1,500,000 shares were issued to officers and directors of the
        Company. These issuances were made at various times throughout the year.
        The
        Company recorded stock-based compensation expense of $1,360,267 to reflect
        the
        fair market value of the common stock issued. Fair market value was based
        on the
        closing price of the Company's common stock on the date of each
        grant.
 
 In
        2003,
        the Company issued a total of 4,502,549 shares of common stock in connection
        with its acquisition of Nanologix, Inc., which was valued at
        $3,827,167.
 
 F-17
 
 During
        the year ended December 31, 2004, the Company sold 5,390,000 shares of
        restricted common stock at $.17 per share and received proceeds of $922,700.
        Of
        the shares sold 1,285,000 were issued at December 31, 2004, and 4,105,000
        shares
        were recorded as a subscription.
 
 During
        the year ended December 31, 2004, the Company issued a total of 4,054,200
        shares
        of restricted common stock to various individuals and companies and accepted
        subscriptions for 2,000,000 shares of common stock from officers and directors
        in exchange for services rendered. These issuances were made at various times
        throughout the year. The Company recorded stock-based compensation expense
        of
        $2,865,996 to reflect the fair market value of the common stock issued. Fair
        market value was based on the closing price of the Company's common stock
        on the
        date of each grant, which ranged from $0.24 to $0.66 per share.
 
 During
        the year ended December 31, 2004, the Company issued a total of 775,538 shares
        of restricted common stock in connection with its acquisition of Nanologix,
        Inc., which was valued at $0.85 per share for a total of $659,207. This issuance
        was made in connection with the September 19, 2003, Acquisition Agreement
        between the Company and Nanologix, Inc.
 
 In
        June
        and July 2004, the Company received total proceeds of $98,000 from seven
        (7)
        investors. At the expiration of 90 days, each of the seven investors had
        the
        option of: (a) being repaid the amount of their investment together with
        15%
        interest; (b) converting their investment into shares of the Company's common
        stock at the price of $0.20 per share, or (c) converting their investment
        into
        shares of common stock of Nanologix, Inc at the price $0.10 per share. Upon
        the
        expiration of the 90-day term, each investor opted to convert their investment
        into Nanologix shares. The Company arranged for a former Nanologix
        officer/director, Robert Ollar, to deliver his own shares of Nanologix common
        stock to the seven investors in full satisfaction of the $98,000 that the
        investors had lent to the Company. These shares did not have a restrictive
        legend on the certificates. In exchange for Robert Ollar using his 1,590,133
        shares of Nanologix, the Company issued him 595,067 shares of its common
        stock
        on November 18, 2004.
 
 During
        2004 certain third parties returned an aggregate of 120,000 shares of common
        stock for cancellation.
 
 During
        the year ended December 31, 2005, the Company sold 790,000 shares of restricted
        common stock at $.17 per share and received proceeds of $134,300. The Company
        also issued 4,877,500 shares of restricted common stock at $.20 per share
        and
        received proceeds of $975,500.
 
 In
        May
        2005, the Company issued an aggregate of 1,458,000 shares of common stock
        to
        settle the debt described in Note 5. The fair value of these shares at the
        date
        of the settlement was $481,140. The Company recorded a charge to interest
        expense of $261,782 for the value of the shares in excess of the debt
        settled.
 
 In
        October 2005, the Company entered into a one-year consulting agreement with
        Xinhua Financial Network whereby Xinhua was retained to introduce the Company
        to
        potential strategic and operational partners in The People's Republic of
        China
        and elsewhere in Asia. In connection with this agreement, the Company issued
        a 5
        year warrant to purchase 10,000,000 of common stock to Xinhua at a price
        of
        $.70. The warrant is callable by the Company at a price of $1.00 in the event
        that market price for the Company's common stock exceeds $1.00.
 
 The
        Company recorded stock based compensation expense of $1,500,000 to reflect
        the
        fair market value of the warrant on the date of issuance. Fair market value
        was
        calculated using the Black-Scholes option pricing model with the following
        assumptions: expected holding period of 5 years; expected volatility of 125%;
        risk free interest rate of 4.0%.
 
 During
        the year ended December 31, 2005, the Company issued a total of 2,007,000
        shares
        of restricted common stock to various consultants in exchange for services
        rendered. These issuances were made at various times throughout the year.
        The
        Company recorded stock-based compensation expense of $718,505 to reflect
        the
        fair market value of the common stock issued. Fair market value was based
        on the
        closing price of the Company's common stock on the date of each grant, which
        ranged from $0.26 to $0.37 per share.
 
 F-18
 During
        the year ended December 31, 2005, ReceptoPharm issued 1,100,000 shares of
        its
        common stock to two of its executive officers for services rendered. The
        shares
        were valued at their fair market value of $0.45 per share and the Company
        recorded a charge to operations of $495,000. ReceptoPharm also issued 314,855
        shares of its common stock to two consultants for services rendered. The
        shares
        were valued at their fair market value of $0.45 per share and the Company
        recorded a charge to operations of $141,685.
 
 Equity
        Compensation Plans
 
 On
        December 3, 2003, the Board of Directors of the Company approved the
        Employee/Consultant Stock Compensation Plan (the "Plan"). The purpose of
        the
 Plan
        is
        to further the growth of Nutra Pharma by allowing the Company to compensate
        employees and consultants who have provided bona fide services to the Company,
        through the award of common stock of the Company. The maximum number of shares
        of common stock that may be issued under the Plan is 2,500,000.
 
 The
        Board
        of Directors is responsible for the administration of the Plan and has full
        authority to grant awards under the Plan. Awards may take the form of stock
        grants, options or warrants to purchase common stock. The Board of Directors
        has
        the authority to determine: (a) the employees and consultants that will receive
        awards under the Plan, (b) the number of shares, options or warrants to be
        granted to each employee or consultant, (c) the exercise price, term and
        vesting
        periods, if any, in connection with an option grant, and (d) the purchase
        price
        and vesting period, if any, in connection with the granting of a warrant
        to
        purchase shares of common stock of the Company.
 
 As
        of
        December 31, 2005, the Company had issued a total of 2,495,000 shares under
        the
        Plan. These shares were issued to various consultants for services rendered
        to
        the Company during 2003 and 2004 as described above.
  9.
        STOCK
        OPTIONS
 
 On
        June 1, 2005 the Company retained Doherty & Company, LLC (“Doherty
& Company”), to provide the services of Michael Doherty as executive
        Chairman of the Company. Concurrently, the Company also retained Doherty
&
Company to act as the Company’s agent in connection with prospective private
        capital-raising activities.
 
 The
        Company granted a five year option to purchase Thirteen Million Six Hundred
        Thousand (13,600,000) shares of the Company’s common stock at an exercise price
        equal to $0.27 per share, vesting over a two year period. The option expires
        on
        May 31, 2010. The initial vesting of 6,800,000 options was contingent on
        the Company, through the efforts of Mr. Doherty and Doherty & Company,
        raising at least $500,000 of additional equity, debt or equity linked financing
        prior to October 31, 2005. This contingency was not met. And as of December
        31, 2005, none of the 13,600,000 options were vested.
 
 On
        April
        1, 2006, the Company and Mr. Doherty entered into a termination agreement
        whereby Mr. Doherty agreed to resign his position as Chairman of Board of
        the
        Company. Upon the effectiveness of the termination agreement on April 1,
        2006,
        the Company issued a five-year option to Mr. Doherty to purchase 2,000,000
        shares of common stock at an exercise price of $.27 per share. The option
        vested
        immediately on the date of grant.
 
 F-19
 
 10.   
        INCOME TAXES
 
 The
        Company accounts for income taxes under SFAS 109, which requires use of the
        liability method. SFAS 109 provides that deferred tax assets and liabilities
        are
        recorded based on the differences between the tax bases of assets and
        liabilities and their carrying amounts for financial reporting purposes,
        referred to as temporary differences. Deferred tax assets and liabilities
        at the
        end of each period are determined using the currently enacted tax rates applied
        to taxable income in the periods in which the deferred tax assets and
        liabilities are expected to be settled or realized.
 
 The
        provision for income taxes differs from the amount computed by applying the
        statutory federal income tax rate to income before provision for income taxes
        for the years ended December 31, 2004 and 2003. The sources and tax effects
        of
        the differences are as follows:
 
 
 Income
                  tax provision at the federal statutory rate
              34 
                  %Effect
                  of operating losses
              (34)%0   
                  %
 
 As
        of
        December 31, 2005, the Company has a net operating loss carry forward of
        approximately $3,400,000. This loss will be available to offset future taxable
        income. If not used, this carry forward will expire through 2025. The deferred
        tax asset of approximately $1,150,000 relating to the operating loss carry
        forward has been fully reserved at December 31, 2005. The increase in the
        valuation allowance related to the deferred tax asset was approximately $50,000
        during 2005. The principal difference between the accumulated deficit for
        income
        tax purposes and for financial reporting purposes results from Stock based
        compensation of approximately $7,800,000, non-cash finance charges of
        approximately $1,100,000, non-cash losses on settlements of approximately
        $1,000,000, non-cash losses related to Nanologix of approximately $1,700,000,
        losses of Receptopharm, Inc. of approximately $2,550,000 and the amortization
        on
        intangibles of approximately $800,000.
 
 11.   
        INVESTMENTS
 
 **Letter
        of Intent to Acquire Portage BioMed LLC**
 
 On
        October 28, 2004, the Company entered into a non-binding letter of intent
        to acquire 100% of the issued and outstanding common stock of Portage BioMed
        LLC, a biotechnology research company (“Portage BioMed”). The proposed terms
        reflected in the non-binding letter of intent are: (i) beginning on
        November 1, 2004, the Company will pay $40,000 per month to Portage BioMed
        for working capital, until such time that Portage BioMed generates sufficient
        cash flow to sustain its operations; (ii) the Company will issue an
        aggregate of 1,000,000 shares of its restricted common stock to Portage BioMed’s
        four members in exchange for their interest in Portage BioMed; (iii) the
        Company will also issue an aggregate of 550,000 shares of its restricted
        common
        stock to Portage BioMed’s four members for four consecutive quarters commencing
        six months from the closing date of the transaction and upon the completion
        of
        certain agreed upon quarterly milestones; and (iv) Rik J. Deitsch, the
        Company’s Chief Executive Officer, will be appointed to Portage BioMed’s Board
        of Directors and one current Portage BioMed Director will be appointed as
        a
        Director of the Company. As of December 31, 2005 the Company had made payments
        totaling $60,000 to Portage BioMed in connection with the non-binding letter
        of
        intent.
 
 At
        December 31, 2005, management determined that it will no longer pursue the
        completion of a definitive agreement with Portage BioMed and as such, it
        has
        written-off its entire investment of $60,000.
 
 F-20
 
 **Investment
        in XenaCare LLC**
 
 On
        November 1, 2004, the Company completed an agreement with XenaCare LLC
“XenaCare”, a healthcare management company engaged in the business of
        manufacturing and distributing non-prescription pharmaceuticals to physicians’
offices. This agreement provides that the Company make an investment of up
        to
        $250,000 in 15 Site of Care physician locations to be managed by XenaCare.
 
 As
        of
        December 31, 2005, the Company had made payments totaling $175,000 to XenaCare
        in connection with this agreement. At December 31, 2005, management evaluated
        its investment in XenaCare and determined that the recoverability of the
        investment was in doubt and as a result, the Company has written-off the
        entire
        amount of its investment of $175,000. The Company has also notified XenaCare
        that it will not invest the additional $75,000 pursuant to the agreement.
 
 
 12.   
        CONTINGENCIES
 
 On
        April 4, 2005, a Motion to Enforce Settlement Agreement was filed against
        the Company in the Circuit Court of Broward County Florida by Bio Therapeutics,
        Inc. f/k/a Phylomed Corp. in Nutra Pharma Corp. v. Bio Therapeutics, Inc.
        (17th
        Judicial Circuit, Case No. 03-008928 (03). This proceeding results from the
        Company’s alleged breach of a settlement agreement that was entered into between
        Bio Therapeutics and the Company in resolution of a previous lawsuit between
        the
        Company and Bio Therapeutics that was resolved by entering into a Settlement
        Agreement. The Company also entered into a related License Agreement and
        Amendment to the License Agreement (“License Agreement”) with Bio Therapeutics.
        In the April 4, 2005 motion, Bio Therapeutics alleges that the Company
        breached certain provisions of the License Agreement and requests that the
        Court
        grant its motion to enforce the Settlement Agreement by declaring the License
        Agreement terminated, enjoining the Company from further use of license products
        that was granted to the Company by the License Agreement, and awarding attorneys
        fees and costs to Bio Therapeutics.
 
 The
        Company intends to defend against this action. The Company does not believe
        that
        this action will have a material effect upon its operations; and if the license
        agreement is terminated does not believe there will be a material negative
        impact on the Company.
 
 
 13.   
        SUBSEQUENT EVENT
 
 Through
        March 2006, the Company sold 2,350,000 shares of restricted common stock
        at
        $0.20 per share and received proceeds of $470,000. The Company also issued
        150,000 shares of restricted common stock in exchange for services.
   F-21