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OFFON

MYCOTOPIA THERAPIES INC.

(TPIA)
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MYCOTOPIA THERAPIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

11/19/2021 | 05:18pm EST

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 use of psychedelics for the treatment of mental health issues. We intend to 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



Ehave, Inc, a publicly traded company, sold 100% of its wholly-owned subsidiary Mycotopia Therapies, Inc., a Florida corporation, to the Company (previously known as 20/20 Global Inc.) On May 4, 2021 20/20 Global, Inc. changed its name to Mycotopia Therapies, Inc. and changed its OTC Markets' trading symbol to TPIA. 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, 2021 and 2020



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, 2021 totaled $2,354,600, an increase of $2,348,668 compared to $5,932 for the three months ended September 30, 2020. The increase was primarily due to an increase stock based compensation of $2,267,000 related to shares issued to consultants and board members. In addition, an increase of $58,100 in legal and professional fees in relation to being a public traded company, an increase of $26,267 in compensation and consulting fees, an increase of $12,246 of stock transfer fees, and an increase of $7,178 in other miscellaneous expenses.



Other expense


Other expense for the three months ended September 30, 2021 totaled $31,604, an increase of $31,052 compared to $552 for the three months ended September 30, 2020. The increase was due to interest expense on our loan with Ehave, Inc.

Comparison of the Nine Months Ended September 30, 2021 and 2020



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 nine months ended September 30, 2021 totaled $2,467,198, an increase of $2,460,161 compared to $7,037 for the nine months ended September 30, 2020. The increase was primarily due to an increase stock based compensation of $2,267,000 related to shares issued to consultants and board members. In addition, an increase of $58,100 in legal and professional fees in relation to being a public traded company, an increase of $26,267 in compensation and consulting fees, an increase of $12,246 of stock transfer fees, and an increase of $14,880 in other miscellaneous expenses.



Other expense


Other expense for the nine months ended September 30, 2021 totaled $34,655, an increase of $33,401 compared to $1,254 for the nine months ended September 30, 2020. The increase was due to interest expense on our loan with Ehave, Inc.

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, 2021, our accumulated deficit was $2,531,027. Such conditions raise substantial doubts about our ability to continue as a going concern.

As of September 30, 2021, we entered into term promissory notes with Ehave, Inc. (a majority shareholder) in the amount of $625,000, in the aggregate. The notes mature two years after the issuance date and bear an interest rate of 1.75% per year. As of September 30, 2021, we owe $625,000 in accordance with these notes.

Further, during the quarter ended March 31, 2020, a pandemic occurred. While the full impact of the pandemic continues to evolve, the financial markets have been subject to significant volatility that adversely impacts our ability to enter into, modify, and negotiate favorable terms and conditions relative to equity and debt financing initiatives.

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The uncertain financial markets, potential disruptions in supply chains, mobility restraints, and changing priorities could also affect our ability to enter into key agreements. The outbreak and government measures taken in response to the pandemic have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as medical services and supplies, have spiked, while demand for other goods and services, such as travel, have fallen. The future progression of the outbreak and its effects on our business and operations are uncertain. While expected to be temporary, these disruptions will negatively impact our sales, results of operations, financial condition, and liquidity in 2021.

As of September 30, 2021, we had total current assets of $947,395 and total current liabilities of $216,243 resulting in working capital of $731,152. Net cash used in operating activities for the nine months ended September 30, 2021 was $145,357, which includes a net loss of $2,501,853, offset by changes in net working capital items related to the increase in accrued interest on our shareholder loan in the amount of $5,807 and an increase in accounts payable of $58,474, in addition to stock based compensation of $2,267,000, depreciation of $249, and amortization of $24,966.

As of September 30, 2021, we had cash of $947,395. 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.



Operating Activities


During the first nine months of 2021 and 2020, the net cash outflow from operating activities was $145,357 and $7,067, respectively. The 2021 amount was comprised of our net loss of $2,501,853, offset by noncash stock-based compensation expense of $2,267,000, depreciation of $249, amortization of the debt discount of $24,966, and net increase in operating liabilities of $64,281. The 2020 amount was comprised of our net loss of $8,291, offset by a net increase in operating liabilities of $1,224.



Financing Activities


Financing activities totaling $985,000 for the nine months ended September 30, 2021 reflected $485,000 in proceeds from the sale convertible debt and proceeds of $500,000 from loans from shareholders. Financing activities for the nine months ended September 30, 2020 consisted of $125,000 in proceeds from loans from shareholders.

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.

© Edgar Online, source Glimpses

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