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 June 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 June 30, 2022
totaled $86,596, a decrease of $18,300 compared to $104,896 for the three months
ended June 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 June 30, 2022 totaled $250,329, an
increase of $247,816 compared to $2,513 for the three months ended June 30,
2021. The increase was due to interest expense on our convertible promissory
notes and related debt discount amortization.
Comparison of the Six months ended June 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 six months ended June 30, 2022
totaled $992,327, an increase of $879,729 compared to $112,598 for the six
months ended June 30, 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 six months ended June 30, 2022 totaled $432,932, an
increase of $429,881 compared to $3,051 for the six months ended June 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
June 30, 2022, our accumulated deficit was $4,275,163. Such conditions raise
substantial doubts about our ability to continue as a going concern.
During the six months ended, June 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 June 30, 2022, we had total current assets of $783,377 and total current
liabilities of $95,631 resulting in a working capital deficit of $687,746. Net
cash used in operating activities for the six months ended June 30, 2022 was
$259,142, which includes a net loss from operations of $1,425,259, offset by
stock based compensation of $874,438, amortization of debt discount of $375,774,
and depreciation expense of $498, as week as the decrease in accounts payable
and accrued expenses of $85,017, and the nominal increase in accrued interest on
our shareholder loans of $424 due to the $5,000 payment on accrued interest.
As of June 30, 2022, we had cash of $783,377. 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,
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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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MYCOTOPIA THERAPIES, INC. 