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") focuses on the psychedelic
space. We provide 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 changes 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 March 31, 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 three months ended March 31, 2022
totaled $905,731, an increase of $898,089 compared to $7,702 for the three
months ended March 31, 2021. The increase 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 three months ended March 31, 2022 totaled $182,603, an
increase of $177,563 compared to $538 for the three months ended March 31, 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
March 31, 2022, our accumulated deficit was $3,938,238. Such conditions raise
substantial doubts about our ability to continue as a going concern.
During the three months ended, March 31, 2022, the Company raised $150,000 from
the sale of the Company's preferred stock. Additionally, the Company raised an
additional $250,000 from the proceeds from convertible debt. This is 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 March 31, 2022, we had total current assets of $1,482,475 and total
current liabilities of $180,042 resulting in a working capital deficit of
$1,304,682. Net cash used in operating activities for the three months ended
March 31, 2022 was $180,044, which includes a net loss from continuing
operations of $1,088,334, offset by changes in net working capital items related
to the increase in stock based compensation of $874,438, the increase in the
amortization of debt discount of $154,932, the increase in depreciation expense
of $248, the decrease in accounts payable and accrued expenses of $124,025, and
the decrease in accrued interest on our shareholder loans due to the $5,000
payment on accrued interest.
As of March 31, 2022, we had cash of $1,482,475. 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, 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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