The following discussion should be read in conjunction with our financialstatements, including the notes thereto, appearing elsewhere in this annualreport. The following discussion contains forward-looking statements thatreflect our plans, estimates and beliefs. Stemtech's actual results could differmaterially from those discussed in the forward-looking statements. Factors thatcould cause or contribute to such differences include but are not limited tothose discussed below and elsewhere in this annual report. Stemtech's auditedfinancial statements are stated in United States Dollars and are prepared inaccordance with United States Generally Accepted Accounting Principles.

Stemtech Corporation was incorporated under the laws of the State of Nevada,U.S. on September 4, 2009. Our registration statement on Form S-1 was filed withthe SEC was declared effective on May 15, 2013. On August 19, 2021, the Companyentered into a Merger Agreement with Stemtech Corporation by which the Companyacquired one hundred percent of the shares of STEMTECH CORPORATION in exchangefor the issuance of 37,060,000 shares of the Company, approximately 85% of theissued and outstanding shares of the Company.

Stemtech has pioneered and patented a whole new category of dietary supplements.Stemtech's advanced Stem Cell Nutrition formulations are one-of-a-kind naturalproducts designed to help support the three most important aspects of stem cellphysiology: 1) Releasing more stem cells; 2) their circulation in the blood; and3) Migration into tissues, where they can perform their daily function ofrenewal and rejuvenation for optimal health. We actually harness the incrediblepower of adult stem cells. How does this work? Adult stem cells are releasedfrom your bone marrow into the bloodstream, they then Circulate in thebloodstream and flow to the tissues most in need. As they arrive, the adult stemcells migrate into the tissues, reproduce and become new, healthy cells of thosetissues. This process takes place every single day, even without tissue damage,as part of the natural renewal system of the body. It is important to understandthat Stemtech's products do not contain stem cells. They are composed of naturalbotanicals and other ingredients that have been clinically documented to supportthe performance of your own adult stem cells. Stemtech also offers ourall-natural OraStem toothpaste, which is a tooth whitener, breath freshener,anti-microbial, stem cell attracting and promotes good gum health. In December2022, our new Cellect One Rapid Renew Stem Cell Peptide Night Cream. CellectOne is a Stemtech proprietary formula containing an FDA patented ingredient, RedOak Bark, which enables deep penetration to promote good skin health.

While sales of products obviously create the cash flow, our real business modelis not just "sales", but lateral penetration. We do this through our IBPs -"Independent Business Partner" Sales Forces, and we invest much energy ingrowing our IBPs. Post public listing and funding, Stemtech is projecting theaddition of 30,000 new independent business partner reps over the next 12 to 24months, adding to the existing IBPs. With an enhanced compensation plan, IBPswill be even more incentivized to build their network, attracting additionalindustry leaders. IBPs are a testimonial to our product and business model,lowering our customer acquisition costs.

We are now reinstituting contests, travel incentives, cruises, other trips,Business Academies for Training, regional conferences, our Annual Conventionwith new product launches. Our IBPs offer highly flexible yet steady incomewhich is most adapted to todays "Laptop & Cellphone Lifestyle", with structuredand organized weekly Corporate training calls, a personalized website, backoffice tracking, oversight and management Tools, Reports, Training Materials andSocial Sharing. Stemtech also launched the Stemtech AdvanceOffice Mobile App,based on the Verb Technology platform in September 2022, improvingcommunication, sharing of information, training videos and other content forrecruiting, on-boarding, customer retention and measuring key performanceindicators for the IBP business.

Stemtech launched a new marketing program in January 2022, with sales continuingto come in from returning consumers who believe in the quality products. UntilSeptember 2021, the Company had operated on an extremely tight budget, withinadequate working capital and difficulties fulfilling orders. Since the cashinfusions noted in "Financing" infra, the company now has the resources tocontact and re-engage the over 200,000 former distributors. With this new cashinfusion, the Company has engaged experienced marketing and social mediaprofessionals to initiate new marketing strategies which are expected to bringincreased activity. Moreover, we are now better positioned to absorb significantnew clientele as the company has directed significant cash towards ourinventory, and we now have enough inventory on hand to fulfill over $3 milliondollars' worth of new orders, an inventory level we have not had since goinginto bankruptcy in 2017. Management conservatively believes that given the cashon hand and working expenditures as describe above, we can reinvigorate sales tobe more consistent with the company's previous revenue historically, as we wererecognized 4 times in the Inc 5000 Magazine's list of fastest growing companies.

Below this IBP level, we have our "DTC" (Direct To Consumer) network marketingDistribution model. This integrative model allows us an immediate globalpresence and ability to operate in multiple countries on any continent. We areuniquely positioned in this post pandemic economy beset by supply chain issues,as this method requires no up-front or required buy-in of inventory, withmonthly shipments available for known recurring sales. This platform has us nowoperating at the intersection of the ecommerce economy, social economy and gigeconomy.

The Company has been making great strides the past year, having filed our"Orastem" trademark registration in Mexico as noted in our press release ofAugust 23, 2022. In addition, Stemtech filed our new 'stemceuticals' trademarkregistration. We also have been fortunate to have Dr. Bankole Johnson join ourLife Sciences Advisory Board in September, as well as the introduction of awhole new line of stem cell skin care products. Life Factor Research bringstheir expertise in research, development and product formulations enabling theCompany to now organically develop whole new lines of Stemceuticals. This newarrangement enables Stemtech to offer more new, cutting-edge products to anever-growing market interested in improved health and quality of life.

Below this IBP level, we have our "DTC" (Direct To Consumer) network marketingDistribution model. This integrative model allows us an immediate globalpresence and ability to operate in multiple countries on any continent. We areuniquely positioned in this post pandemic economy beset by supply chain issues,as this method requires no up-front or required buy-in of inventory, withmonthly shipments available for known recurring sales. This platform has us nowoperating at the intersection of the ecommerce economy, social economy and gigeconomy.

Implications of Being an Emerging Growth Company

Emerging Growth Company - We are an emerging growth company as defined inSection 2(a)(19) of the Securities Act of 1933, as amended, or the SecuritiesAct. We will continue to be an emerging growth company until: (i) the last dayof our fiscal year during which we had total annual gross revenues of at least$1.07 billion; (ii) the last day of our fiscal year following the fifthanniversary of the date of the first sale of our common stock pursuant to aneffective registration statement under the Securities Act; (iii) the date onwhich we have, during the previous 3-year period, issued more than $1.0 billionin non-convertible debt; or (iv) the date on which we are deemed to be a largeaccelerated filer, as defined in Section 12b-2 of the Securities Exchange Act of1934, as amended, or the Exchange Act, which means the market value of ourcommon stock that is held by non-affiliates exceeds $700 million as of the priorJune 30.

As an emerging growth company, we are exempt from:

We have elected to use the extended transition period for complying with new orrevised accounting standards under Section 102(b)(1) of the Jumpstart OurBusiness Startups Act.

We are also a smaller reporting company as defined in Rule 12b-2 of the ExchangeAct. As a smaller reporting company, we are not required to provide selectedfinancial data pursuant to Item 301 of Regulation S-K, nor are we required tocomply with the auditor attestation requirements of Section 404(b) of theSarbanes-Oxley Act of 2002. We are also permitted to provide certain modifiedexecutive compensation disclosure under Item 402 of Regulation S-K.

The accompanying consolidated financial statements have been prepared inaccordance with accounting principles generally accepted in the United States ofAmerica ("U.S. GAAP"). Such consolidated financial statements and accompanyingnotes are the representations of the Company's management, which is responsiblefor their integrity and objectivity. All intercompany accounts and transactionshave been eliminated in consolidation.

Our consolidated financial statements have been prepared assuming that we willcontinue as a going concern and, accordingly, do not include adjustmentsrelating to the recoverability and realization of assets and classification ofliabilities that might be necessary should we be unable to continue inoperation. We expect we will require additional capital to meet our long-termoperating requirements. We expect to raise additional capital through, amongother things, the sale of equity or debt securities.

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021.

During the years ended December 31, 2022 and 2021, net sales were $4,559,399 and$4,321,245, respectively. The increase of $238,154 is primarily due to slightincreases in the overall sales of the subsidiaries due to the increase in IBPsin 2022.

During the years ended December 31, 2022 and 2021, our total operating expenseswere $8,418,761 and $6,508,356, respectively. The increase of $1,910,405 isprimarily attributable to an increase in stock compensation granted to vendorsand officers in 2022.

During the years ended December 31, 2022 and 2021, total non-operating expenseswere $3,513,830 and $3,900,838, respectively, resulting in an increase of$387,008. The difference is primarily due to the gain on extinguishment of debtof $3,799,356 in 2022, the decrease in interest expense of $4,232,358, partiallyoffset by the changes in fair value of derivative liabilities from a gain of$4,553,372 at December 31, 2021 to a loss of $3,223,271 at December 31, 2022 inconnection with the note payable issued in September 2021.

Our net loss for the years ended December 31, 2022 and 2021, was $8,632,828 and$7,111,109, respectively. The increase in net loss was caused by the factorsdescribed above.

Liquidity and Capital Resources

In spite of increasing revenues, we are not yet profitable, and we cannotprovide any assurance of when we will be profitable. We incurred a net loss of$8,632,828 and $7,111,109 for the years ended December 31, 2022 and 2021,respectively. During the year ended December 31, 2022, we met our short-termliquidity requirements from our existing cash reserves and proceeds from theissuance of notes payable of $611,266, net proceeds from financing arrangementsof $214,249 and stock issued for cash of $100,002.

As of December 31, 2022, our current assets were $612,370 compared to $1,600,039in current assets at December 31, 2021. As of December 31, 2022, our currentliabilities were $7,415,791 compared to $9,387,038 at December 31, 2021. Currentliabilities at December 31, 2022 were comprised of $3,396,543 of accountspayable and accrued expenses, $2,717,633 of derivative liabilities, $482,885 inconvertible notes, $446,246 of nonconvertible notes payable, $214,249 offactoring liability, $119,065 in current operating lease liabilities and $39,170in deferred revenues.

Stockholders' deficit decreased from $4,005,446 as of December 31, 2021 to$3,171,918 at December 31, 2022. This change was primarily caused by theissuance of common stock for the conversion of debt of $828,000 during the yearended December 31, 2022.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For theyear ended December 31, 2022, net cash flows used in operating activities were$1,216,948 which is primarily due the change in working capital accounts. Thenet loss of $8,632,828 and $3,799,356 gain on extinguishment of debt was offsetby $3,223,271 loss from the change in fair value of derivative liabilities,$3,996,187 stock based compensation, and $2,428,539 amortization of debtdiscount. Adjustments for changes in operating assets and liabilities were dueto a decrease in inventories of $278,352, an increase in deferred revenues of$39,170, a decrease in prepaid expenses and other current assets of $37,645 andan increase in long term deposits of $15,627 offset by an decrease in accountspayable and accrued expenses of $683,058 and an increase in accounts receivableof $24,047. For the year ended December 31, 2021, net cash flows used inoperating activities were $1,914,093.

Cash Flows from Financing Activities

We have financed our operations primarily from either the issuance of our sharesof common stock or notes payable. For the year ended December 31, 2022, wegenerated $338,734 cash from financing activities which consists of $611,266from the issuance of convertible promissory notes, $214,249 proceeds fromfactoring arrangement and $100,002 proceeds from issuance of stocks for cash,partially offset by payments on notes payable of $586,783. For the year endedDecember 31, 2021, net cash flows provided by financing activities were$2,628,739.

Plan of Operation and Funding

We expect that working capital requirements will continue to be funded through acombination of our existing funds and further issuances of equity securities anddebt instruments.

Existing working capital, further advances and debt instruments, and anticipatedcash flow are expected to be adequate to fund our operations over the next threemonths. We have no lines of credit or other bank financing arrangements.Generally, we have financed operations to date through the proceeds of theprivate placement of equity and debt instruments. In connection with ourbusiness plan, management anticipates additional increases in operating expensesand capital expenditures relating to: (i) acquisition of inventory; (ii)developmental expenses associated with a start-up business; and (iii) marketingexpenses. We intend to finance these expenses with further issuances ofsecurities and director loans. Thereafter, we expect we will need to raiseadditional capital and generate revenues to meet long-term operatingrequirements. Additional issuances of equity or convertible debt securities willresult in dilution to our current shareholders. Additional financing may not beavailable upon acceptable terms, or at all. If adequate funds are not availableor are not available on acceptable terms, we may not be able to take advantageof prospective new business endeavors or opportunities, which couldsignificantly and materially restrict our business operations. We will have toraise additional funds in the next twelve months in order to sustain and expandour operations. We currently do not have a specific plan of how we will obtainsuch funding; however, we anticipate that additional funding will be in the formof equity financing from the sale of our common stock. We have and will continueto seek to obtain short-term loans from our directors, although no futurearrangement for additional loans has been made. We do not have any agreementswith our directors concerning these loans. We do not have any arrangements inplace for any future equity financing.

Off-Balance Sheet Arrangements

As of the date of this report, we do not have any off-balance sheet arrangementsthat have or are reasonably likely to have a current or future effect on ourfinancial condition, changes in financial condition, revenues or expenses,results of operations, liquidity, capital expenditures or capital resources thatare material to investors.

The Company is authorized to issue up to 200,000,000 shares of common stock, parvalue $0.001 par value. Each outstanding share of common stock entitles theholder to one vote per share on all matters submitted to a stockholder vote. Allshares of common stock are non-assessable and non-cumulative, with nopre-emptive rights.

On September 3, 2021, the Company executed a Convertible Promissory Note,Securities Purchase Agreement and ancillary agreements with Leonite. Per theterms of the Agreements with Leonite, the Company was tendered $410,000, whichis open with right of redemption for one year. Prior to the maturity date of thenote, the Company at its option, has the right to redeem in cash in part or inwhole, the amounts outstanding. Should Leonite wish to convert this debt intoequity, the conversion price shall be sixty-five percent of the lowest intradayprice during the previous 21 days. Pursuant to the Agreements, the Company hasearmarked the net proceeds for immediate cash infusion for normative workingcapital purposes and capital expenditures. Leonite. has agreed that neither itnor any of its affiliates shall engage in any short-selling or hedging of ourcommon stock during any time.

On September 3, 2021, the Company finalized a Promissory Convertible Note,Securities Purchase Agreement and ancillary agreements with MCUS. Per the termsof the Agreements with MCUS., the Company was tendered $500,000, which theCompany utilizes for normative working capital purposes and capitalexpenditures. The note is open with right of redemption for nine months. MCUShas agreed that neither it nor any of its affiliates shall engage in anyshort-selling or hedging of our common stock during any time during the term ofthe Agreements. Pursuant to the Agreements, the Company is required to registerall shares which Leonite may acquire. The foregoing is a summary description ofcertain terms of the Agreements. For a full description of all terms, pleaserefer to the original Agreements which were filed as an 8K with the SEC onSeptember 10, 2021.

On September 17, 2021, the Company finalized a $1,400,000 investment into ourCompany with Sharing Services Global Corporation, a publicly traded company("SHRG") via a Convertible Promissory Note, a Share Purchase Agreement andWarrant Agreement. Per the terms of the Agreements, the Company was tendered thefull $1,400,0000, which is open with right of redemption at 10% interest perannum until September 9, 2024.

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