Aibotics, Inc 10-Q for FY2023 Q3
Aibotics, Inc. (AIBT)
About this 10-Q
Aibotics, Inc filed this 10-Q on November 13, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).
Headline figures
Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $308.7K
- compared with a net loss of $292.63K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to _____
Commission file number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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(Address of principal executive offices, including zip code) | |
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(Registrant’s telephone number, including area code) | |
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on |
N/A | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $0.001
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. x
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ |
| Accelerated filer ☐ |
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| Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of November 13, 2023, we had
Mycotopia Therapies, Inc.
Form 10-Q for the Quarter Ended September 30, 2023
TABLE OF CONTENTS
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| Part I—Financial Information |
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1 | 4 | |
| Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (unaudited) | 4 |
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| Notes to the Unaudited Condensed Consolidated Financial Statements | 8 |
2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
3 | 17 | |
4 | 17 | |
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| Part II—Other Information |
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6 | 18 | |
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PART I–FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Mycotopia Therapies Inc. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
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CURRENT ASSETS |
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Cash | $ | |
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TOTAL CURRENT ASSETS |
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NON-CURRENT ASSETS |
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Property and equipment, net |
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TOTAL ASSETS | $ | |
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LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT |
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CURRENT LIABILITIES |
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Accounts payable and accrued expenses | $ | |
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Accrued expenses - related party |
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Convertible note payable, net of debt discount |
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TOTAL CURRENT LIABILITES |
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Convertible note payable, net of debt discount |
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TOTAL LIABILITIES |
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MEZZANINE EQUITY |
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Preferred stock, $ |
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STOCKHOLDERS' EQUITY |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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TOTAL STOCKHOLDERS' DEFICIT |
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TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | $ | |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
Mycotopia Therapies Inc. | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
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OPERATING EXPENSE |
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General and administrative |
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TOTAL OPERATING EXPENSES |
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NET LOSS FROM OPERATIONS |
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OTHER EXPENSE |
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Interest expense |
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Interest expense - related party |
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TOTAL OTHER EXPENSE |
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NET LOSS BEFORE PROVISION FOR INCOME TAXES |
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Provision for income taxes |
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NET LOSS |
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NET LOSS PER SHARE – BASIC AND DILUTED |
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AVERAGE NUMBER OF COMMON SHARE OUTSTANDING – BASIC AND DILUTED |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
MYCOTOPIA THERAPIES, INC. | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | |||||||||||||||||||||
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Balance as of December 31, 2022 |
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Net loss for the three months ended, March 31, 2023 |
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Balance as of March 31, 2023 |
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Stock based compensation |
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Common stock issued to settle accounts payable and accrued expenses |
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Net loss for the three months ended, June 30, 2023 |
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Balance as of June 30, 2023 |
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Net loss for the three months ended, September 30, 2023 |
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Balance as of September 30, 2023 |
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Balance as of December 31, 2021 |
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Stock based compensation |
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Sale of preferred shares in private placements |
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Conversion of preferred to common |
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Debt discount on convertible debt and warrants |
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Net loss for the three months ended March 31, 2022 |
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Balance as of March 31, 2022 |
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Stock based compensation |
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Conversion of preferred shares to common shares |
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Conversion of convertible debt into shares of common stock |
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Common stock issued on cashless exercise of warrant |
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Net loss for the three months ended, June 30, 2022 |
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Balance as of June 30, 2022 |
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Common stock issued on cashless exercise of warrant |
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Net loss for the three months ended September 30, 2022 |
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Balance as of September 30, 2022 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
6
Mycotopia Therapies Inc. | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) | $ | ( |
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Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: |
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Depreciation expense |
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Amortization of debt discount |
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Changes in Operating Assets and Liabilities: |
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Increase (Decrease) in accounts payable and accrued expenses |
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Increase (Decrease) in accrued expenses - related party |
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Decrease in accrued interest - shareholder loan |
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NET CASH USED IN OPERATING ACTIVITIES |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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NET CASH USED IN INVESTING ACTIVITIES |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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NET CASH USED IN FINANCING ACTIVITIES |
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NET CHANGE IN CASH |
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CASH AT BEGINNING OF PERIOD |
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CASH AT END OF PERIOD | $ |
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Cash paid during the period: |
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Cash paid for interest | $ |
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Cash paid for income taxes | $ |
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Supplemental Disclosure of Non-Cash Financing Activities: |
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Conversion of preferred to common stock | $ |
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Debt discount on convertible note payable | $ |
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Conversion of convertible debt and interest | $ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
7
MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization and Business Activity
The Company was incorporated in Nevada on January 21, 2000, under the name RM Investors, Inc. In December 2020, we entered into definitive agreements with Ehave, Inc., an Ontario corporation (“Ehave”), Mycotopia Therapies Inc., a Florida corporation and wholly owned subsidiary of Ehave (“MYC”), and the former and current directors of 20/20 Global that provide for: (i) 20/20 Global’s purchase for $350,000 in cash of all of the outstanding stock of MYC from Ehave under a Stock Purchase Agreement, resulting in MYC becoming a wholly owned subsidiary of 20/20 Global; and (ii) the change of control of 20/20 Global’s board of directors and management under a Change of Control and Funding Agreement. In a related transaction, Ehave agreed to purchase 9,793,754 shares of 20/20 Global common stock, which constitute approximately 75.77% of the then-issued and outstanding shares of 20/20 Global’s common stock, for $350,000 in cash through a Stock Purchase Agreement (“MYC SPA”) with 20/20 Global stockholders Mark D. Williams, Colin Gibson, and The Robert and Joanna Williams Trust. Ehave’s ownership has since been diluted to 65.9% as of December 31, 2022.
On January 19, 2021, the above transaction closed. Because the former shareholder of Mycotopia Therapies, Inc. acquired
NOTE 2 – GOING CONCERN
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. To date, the Company has generated no revenues, experienced negative operating cash flows and has incurred operating losses since inception. Management expects the Company to continue to fund its operations primarily through the issuance of debt or equity.
For the nine months ended September 30, 2023, the Company incurred a net loss of $
The Company’s existence is dependent upon management’s ability to develop profitable operations which raises substantial doubt about the Company’s ability to continue as a going concern. Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Company’s efforts will be successful. No assurance can be given that management’s actions will result in profitable operations or the resolution of its liquidity problems. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result should the company be unable to continue as a going concern.
In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance that the Company will be successful in its effort to secure additional equity financing.
The financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
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MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of the Company’s financial position, results of operations and cash flows as of and for the interim periods presented.
Basis of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, MYC. All inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our financial statements include, when applicable, disclosures of estimates, assumptions, uncertainties, and markets that could affect our financial statements and future operations.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value.
Fixed Assets and Depreciation
Property, plant, and equipment are stated at cost. For financial reporting, we provide for depreciation using the straight-line method at rates based upon the estimated useful lives of the various assets. Depreciation expense was $
Fair Value of Financial Instruments
The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical
9
MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data;
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
There were no changes in the fair value hierarchy leveling during the six months ended September 30, 2023 and 2022.
Income Taxes
The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of September 30, 2023 and December 31, 2022, the Company had a full valuation allowance against its deferred tax assets.
The Company follows ASC 740-10-25, Income Taxes—Recognition, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.
Stock Based Compensation
We follow ASC 718, Compensation–Stock Compensation which prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. Share-based payments to employees and non-employees, including grants of stock options, are recognized as compensation expense in the financial statements based on their fair values on the grant date. That expense is recognized over the period required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
Basic and Diluted Net Loss per Share
Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period before giving effect to stock options, stock warrants, restricted stock units and convertible securities outstanding, which are considered to be dilutive common stock equivalents. Diluted net loss per common share is calculated based on the weighted average number of common and potentially dilutive shares outstanding during the period after giving effect to dilutive common stock equivalents. Contingently issuable shares are included in the computation of basic loss per share when issuance of the shares is no longer contingent. The common stock equivalents not included in the computation of earnings per share because the effect was antidilutive, were related to convertible debt and totaled
10
MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements, other than those disclosed below.
In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.
NOTE 4 – RELATED PARTY TRANSACTION
During the year ended December 31, 2020, the Company entered into two term promissory notes with Ehave, Inc. (a majority shareholder) in the amount of $125,000. During the year ended December 31, 2021, the Company entered a term promissory note with Ehave, Inc. in the amount of $500,000. The notes mature two years after the issuance date and bear an interest rate of
Mycotopia Consulting Agreement with the CEO
On November 17, 2021, Mycotopia entered into an Executive Consulting Agreement (the “Mycotopia Consulting Agreement”), with Benjamin Kaplan (“BK”) to serve as the Company’s CEO for an initial term of 36 months. As of September 30, 2023 and December 31, 2022, the Company has accrued $
Significant terms of the Mycotopia Consulting Agreement are as follows:
BK was granted a Warrant to purchase that number of shares of the Company’s common stock equal to 5% of the issued and outstanding common shares of the Company, on a fully diluted basis. The Warrant has an exercise price of $0.01 per share and shall expire November 16, 2023.
During the nine months ended September 30, 2023 and 2022, the Company issued
Bonus
The Company will pay the CEO a bonus in the Company’s restricted stock or restricted stock units based on the following EBITDA milestones. As of September 30, 2023, no EBITDA milestones were met, and no amounts have been recorded for the bonus milestones.
11
MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
Bonus |
|
| EBITDA Milestones | |
$ | 100,000 |
|
| 1st $1,000,000 |
$ | 100,000 |
|
| 2nd $1,000,000 |
$ | 100,000 |
|
| 3rd $1,000,000 |
$ | 100,000 |
|
| 4th $1,000,000 |
$ | 100,000 |
|
| 5th $1,000,000 |
The Company will pay the CEO a bonus in restricted stock or restricted stock units based on the following Company market capitalization by maintaining the below market cap for the Company for a period of 22 consecutive trading days:
Bonus (Shares) |
|
| Market Capitalization Milestone |
| |
250,000 |
|
| $ | 30,000,000 |
|
250,000 |
|
| $ | 40,000,000 |
|
250,000 |
|
| $ | 60,000,000 |
|
250,000 |
|
| $ | 80,000,000 |
|
250,000 |
|
| $ | 100,000,000 |
|
Stock Grants – Significant Transactions
Upon the Company closing of a Significant Transaction with the Company, the CEO shall be granted shares of the Company’s common stock or new series of the Company’s preferred shares that is convertible into common stock of the Company equal to 5% of the value of all the consideration, including any stock, cash or debt of such completed transaction. The CEO shall earn this grant for each Significant Transaction closed by the Company. A “Significant Transaction” shall mean a financing of at least $500,000 or the closing of an acquisition with a valuation of at least $1,000,000 for the Company. As of September 30, 2023 and December 31, 2022, the Company did not grant any equity in relation to a Significant Transaction.
As of September 30, 2023 and 2022, no amounts have been accrued related to the bonuses.
NOTE 5 – PROMISSORY AND CONVERTIBLE NOTES
As of September 30, 2023 and December 31, 2022, the Company had outstanding to various lenders as convertible promissory notes an aggregate amount of $
As of September 30, 2023, two convertible promissory notes were in default in the aggregate principal amount of $
The following tables reflects a summary of the outstanding principal and interest by each lender and their respective maturity date as of September 30, 2023 and December 31, 2022:
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|
| September 30, 2023 |
| December 31, 2022 | ||||||||
|
| Maturity Date |
| Total Outstanding*** |
| Principal |
| Interest |
| Total Outstanding*** |
| Principal |
| Interest |
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|
|
|
|
|
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|
|
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|
Lender A |
|
| $ |
| $ |
| $ |
| $ |
| $ |
| $ | |
Lender B |
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| |||||||
Lender C |
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Lender D |
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Lender E |
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| |||||||
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|
|
| $ |
| $ |
| $ |
| $ |
| $ |
| $ |
*** - Total Outstanding = Principal + Interest as of September 30, 2023 and December 31, 2022
12
MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
During the nine months ended September 30, 2023 and 2022, the Company recorded an aggregate debt discount of $
During the nine months ended September 30, 2023 and 2022, the Company recorded debt discount amortization expense in the amount of $
NOTE 6 – STOCKHOLDERS’ EQUITY
We are authorized to issue
Mezzanine Equity
The Preferred Shares are recorded as mezzanine equity in accordance with ASC 480 at its initial net carrying value in the amount of $50,000. The Series A Shares are recorded as mezzanine equity in accordance with ASC 480 because the Company may be obligated to issue a variable number of shares at a fixed price known at inception and there is no maximum number of shares that could potentially be issued upon conversion. In this instance, cash settlement would be presumed and the Series A Shares are classified as mezzanine equity in accordance with ASC 480-10-S99. Immediately upon effectiveness of the registration statement registering for resale of all the common stock issuable under the Series A Shares, all outstanding Series A Shares shall automatically convert into common stock.
During the nine months ended September 30, 2022, the Company sold 15,000 shares of preferred stock to three shareholders for $
STOCK BASED COMPENSATION
On January 21, 2022, the Company issued
On January 24, 2022, the Company issued
On March 17, 2022, the Company issued
During the nine months ended September 30, 2023, the Company issued
Warrants Issued
During the nine months ended September 30, 2022, the Company issued
13
MYCOTOPIA THERAPIES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
During the nine months ended September 30, 2022, the Company issued
During the nine months ended September 30, 2022, the Company issued 125,162 shares of common stock upon the cashless exercise of 151,667 warrants.
During the nine months ended September 30, 2023, the Company issued
The following table reflects a summary of Common Stock warrants outstanding and warrant activity during the nine months ended September 30, 2023
|
| Underlying |
| Weighted Average |
| Weighted Average | |
Warrants outstanding at January 1, 2023 |
|
| $ |
| |||
Granted |
|
|
| ||||
Exercised |
|
| - |
| - | ||
Forfeited |
| ( |
|
| - | ||
Warrants outstanding and exercisable at September 30, 2023 |
|
| $ |
| |||
The intrinsic value of warrants outstanding as of September 30, 2023 was $12,000.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Related Party Transaction
On November 17, 2021, the Company entered into an Executive Consulting Agreement (the “Agreement”) with Benjamin Kaplan whereby Mr. Kaplan was appointed as CEO of the Company (see Note 4).
NOTE 8 – SUBSEQUENT EVENTS
The Company’s management has evaluated subsequent events occurring after September 30, 2023, the date of our most recent balance sheet, through the date our financial statements were issued, and there are no events requiring disclosure.
14
Item 2. MANAGEMENT’S DISCUSSION AND ANLAYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
Critical Accounting Estimates
We have identified the estimates outlined below as critical to our business operations and an understanding of our results of operations. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company. Based on this definition, we have the critical accounting estimates identified below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results which are found in Note 3 – Significant Accounting Policies of our 2022 Annual Report on Form 10-K/A and Note 3 – Significant Accounting Policies in the accompanying consolidated financial statements. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
Stock Based Compensation
ASC 718 Compensation–Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. Share-based payments to employees and non-employees, including grants of stock options and warrants, are recognized as compensation expense in the financial statements based on their fair values on the grant date. That expense is recognized over the period required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
Results of Operations
Comparison of the Three Months Ended September 30, 2023 and 2022
Sales and Cost of Sales
We did not have any revenue or cost of revenue from operations for the three months ended September 30, 2023 and 2022.
15
Operating Expenses from Operations
Operating expenses from operations for the three months ended September 30, 2023 and 2022, consisted of general and administrative expenses of $165,421 and $106,982, respectively. General and administrative expenses consisted primarily of consulting fees, stock-based compensation, board compensation, and legal and professional services. Our increase in general and administrative expenses is the result of an increase in administrative costs due to being a publicly traded company.
Other Expense
Other expenses of $143,279 and $185,651 for the three months ended September 30, 2023 and 2022, respectively, consisted of interest expense from convertible notes with debt discounts and interest expense from related parties. Interest expense decreased due to a decrease in amortization of the debt discount.
Net Loss
We had a net loss for the three months ended September 30, 2023 and 2022, of $308,700 and $292,633, respectively.
Comparison of the Nine Months Ended September 30, 2023 and 2022
Sales and Cost of Sales
We did not have any revenue or cost of revenue from operations for the nine months ended September 30, 2023 and 2022.
Operating Expenses from Operations
Operating expenses from operations for the nine months ended September 30, 2023 and 2022, consisted of general and administrative expenses of $427,785 and $1,389,700, respectively. General and administrative expenses consisted primarily of consulting fees, stock-based compensation, board compensation, and legal and professional services. Our decrease in general and administrative expenses is the result of decreased administrative costs due to decreased compliance costs, and a decrease in stock-based compensation.
Other Expense
Other expenses of $462,601 and $611,380 for the nine months ended September 30, 2023 and 2022, respectively, consisted of interest expense from convertible notes with debt discounts and interest expense from related parties. Interest expense decreased due to a decrease in amortization of the debt discount.
Net Loss
We had a net loss for the nine months ended September 30, 2023 and 2022, of $890,386 and $2,008,283, respectively.
Liquidity and Capital Resources
As of September 30, 2023, we had working capital deficiency of $1,738,098, an increase from a working capital deficiency of $378,614 as of December 31, 2022. As of September 30, 2023, we had current assets of $316,985, consisting solely of cash. As of September 30, 2023 our current liabilities consisted predominantly of accounts payable and accrued expenses, accrued expenses – related party and convertible notes payable. We had an accumulated deficit of $8,670,020 as of September 30, 2023, an increase from an accumulated deficit of $7,779,634 as of December 31, 2022.
Operating activities used net cash of $68,914 for the nine months ended September 30, 2023, as compared to using net cash of $604,094 for the nine months ended September 30, 2022. The Company did not have any investing activities for the nine months ended September 30, 2023 and 2022. The Company did not have any financing activities
16
for the nine months ended September 30, 2023.The Company had net cash used of $225,000 from financing activities for the nine months ended September 30, 2022. We had a cash balance of $316,985 and $438,425 as of September 30, 2023 and December 31, 2022, respectively.
We plan to fund our operations with cash on hand and additional financing.
Our consolidated financial statements have been prepared assuming we will continue as a going concern. Our ability to continue our operations as a going concern is dependent on management’s plans. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Principal Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As a result of a material weakness in our internal control over financial reporting, our Chief Executive Officer and Principal Accounting Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of September 30, 2023.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
None.
17
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None
Item 6. Exhibits
EXHIBIT |
| DESCRIPTION |
31.1 |
| |
32.1 |
| |
101.INS |
| Inline XBRL Instance Document. |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Mycotopia Therapies, Inc. | |
|
| |
Date: November 13, 2023 | By: | /s/ Ben Kaplan |
| Name: | Ben Kaplan |
| Title: | Chief Executive Officer and Principal Accounting Officer |
19
Exhibit 31.01
CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002
I, Ben Kaplan, certify that:
1.I have reviewed this annual report on Form 10-Q of Mycotopia Therapies, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: November 13, 2023 |
|
|
|
/s/ Ben Kaplan |
|
Ben Kaplan |
|
Chief Executive Officer and |
|
Exhibit 32.01
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Mycotopia Therapies, Inc. (“the Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ben Kaplan, Chief Executive Officer and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Ben Kaplan |
|
Ben Kaplan |
|
Chief Executive Officer |
|
Principal Accounting Officer |
|
November 13, 2023 |
|
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.