The following discussion and analysis of our financial condition and results of
operations should be read together with our financial statements and the related
notes and the other financial information included elsewhere in this Quarterly
Report. This discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including those discussed below and elsewhere in this Quarterly Report,
particularly those under "Risk Factors."
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report on Form 10-Q contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 under Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, assumptions, estimates,
intentions and future performance, and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control, and which may
cause our actual results, performance or achievements to be materially different
from future results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of historical
fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as "may," "can,"
"anticipate," "assume," "should," "indicate," "would," "believe," "contemplate,"
"expect," "seek," "estimate," "continue," "plan," "point to," "project,"
"predict," "could," "intend," "target," "potential" and other similar words and
expressions of the future.
Overview
Mycotopia Therapies, Inc. ("Mycotopia Therapy") provides psychedelic therapies
through technology-focused, data-driven, and medical-based solutions for people
dealing with anxiety, depression, bipolar disorders, PTSD, ADHD, autism, and
addictions. With a primary focus of helping patients heal and reclaim their
life, Mycotopia Therapy endeavors to guide individuals through their journey of
healing. This is accomplished by acquiring an understanding of the causes and
works to mental wellness through psychedelic enhanced psychotherapy, integrated
with a professional team of mental wellness practitioners and cutting-edge
technology. Psychedelic therapy is a holistic and spiritual approach providing
healing and has shown successful treatment for many years.
Recent Developments
On January 19, 2021, Ehave, Inc, a publicly traded company, sold 100% of
its wholly-owned subsidiary Mycotopia Therapy to the Company (previously known
as 20/20 Global Inc.) On May 4, 2021 20/20 Global, Inc. changes its name to
Mycotopia Therapies, Inc. and changed its symbol to TPIA which trades on the OTC
Pink Sheets. As a result of the transaction closing, Ehave controls
approximately 75.77% of our outstanding shares.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires
companies to make estimates and assumptions that affect the reported amounts of
assets, liabilities and expenses and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. These estimates and judgments are subject
to an inherent degree of uncertainty, and actual results may differ. Our
significant accounting policies are more fully described in Note 3 to our
financial statements included elsewhere in this Quarterly Report. Critical
accounting estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances, and are particularly
important to the portrayal of our financial position and results of operations.
Our estimates are primarily guided by observing the following critical
accounting policies.
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Results of Operations
Comparison of the Three Months Ended September 30, 2022 and 2021
General and administrative
General administrative expenses consist primarily of costs associated without
overall operations and being a public company. The costs include legal and
professional services, corporate and compliance related fees.
General and administrative expense for the three months ended September 30, 2022
totaled $322,442, a decrease of $2,032,158 compared to $2,354,600 for the three
months ended September 30, 2021. The decrease was primarily due to legal and
professional services in relation to being a public traded company.
Other expense
Other expense for the three months ended September 30, 2022 totaled $185,651, an
increase of $154,047 compared to $31,604 for the three months ended September
30, 2021. The increase was due to interest expense on our convertible promissory
notes and related debt discount amortization.
Comparison of the Nine Months Ended September 30, 2022 and 2021
General and administrative
General administrative expenses consist primarily of costs associated with our
overall operations and being a public company. The costs include legal and
professional services, corporate and compliance related fees.
General and administrative expense for the nine months ended September 30, 2022
totaled $1,314,769, a decrease of $1,152,429 compared to $2,467,198 for the nine
months ended September 30, 2021. The decrease was primarily due to stock-based
compensation, advertising and marketing expenses, and legal and professional
services in relation to being a public traded company.
Other expense
Other expense for the nine months ended September 30, 2022 totaled $618,583, an
increase of $583,928 compared to $34,655 for the nine months ended September 30,
2021. The increase was due to the interest expense and amortization expense on
the debt discount from our loans.
Liquidity and Capital Resources
To date, we have generated no revenues, experienced negative operating cash
flows and have incurred operating losses from our activities. We expect to
continue to fund our operations through the issuance of debt or equity. As of
September 30, 2022, our accumulated deficit was $4,783,256. Such conditions
raise substantial doubts about our ability to continue as a going concern.
During the nine months ended, September 30, 2022, we raised $150,000 from the
sale of our preferred stock. Additionally, the Company raised an additional
$250,000 from the proceeds from convertible debt. This is in addition to
previous capital raises that occurred during the year ended December 31, 2021,
in which, the Company raised $895,000 in cash proceeds from the issuance of
convertible debt, as well as, $500,000 in cash proceeds from a related party
loan.
As of September 30, 2022, we had total current assets of $438,425 and total
current liabilities of $296,764 resulting in a working capital deficit of
$141,661. Net cash used in operating activities for the nine months ended
September 30, 2022 was $604,094, which includes a net loss from operations of
$1,933,352, offset by stock based compensation of $874,438, amortization of debt
discount of $533,308, and depreciation expense of $749, a decrease in accounts
payable and accrued expenses of $68,898, and a decrease in accrued interest on
our shareholder loans of $10,339.
As of September 30, 2022, we had cash of $438,425. We will need to raise
significant additional capital to continue to fund operations. We may seek to
sell common or preferred equity, convertible debt securities or seek other debt
financing. In addition, we may seek to raise cash through collaborative
agreements or from government grants. The sale of equity and convertible debt
securities may result in dilution to our shareholders and certain of those
securities may have rights senior to those of our common shares. If we raise
additional funds through the issuance of preferred stock, convertible debt
securities or other debt financing, these securities or other debt could contain
covenants that would restrict our operations. Any other third-party funding
arrangement could require us to relinquish valuable rights. The source, timing
and availability of any future financing will depend principally upon market
conditions, and, more specifically,
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on the progress of our product and programs as well as commercial activities.
Funding may not be available when needed, at all, or on terms acceptable to us.
Lack of necessary funds may require us, among other things, to delay, scale back
or eliminate expenses including those associated with our planned product
development and commercial efforts.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any
off-balance sheet arrangements, as defined under SEC rules, such as
relationships with unconsolidated entities or financial partnerships, which are
often referred to as structured finance or special purpose entities, established
for the purpose of facilitating financing transactions that are not required to
be reflected on our balance sheets.
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