10-Q/A - AIBT - Equibles

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A<br>(Amendment No. 1)
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Commission file number: 000-56022
Mycotopia Therapies, Inc.
(Exact name of registrant as specified in its charter)
Nevada		87-0645794
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
18851 NE 29th Ave., Suite 700, Aventura, FL 33180
(Address of principal executive offices, including zip code)
954-233-3511
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x No
Indicate by check mark if the registrant is not required to file reports pursuant to the Section 13 or Section 15(d) of the Exchange Act. ¨ Yes x No

All values are in US Dollars.

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 Yes ¨ No

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 Yes ¨No
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 ¨
	Non-accelerated Filer x	Smaller reporting company ☒
	Emerging growth company ☐
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
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐Yes xNo
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At May 16, 2022 the registrant had 11,337,109 shares of common stock, par value $0.086 per share, outstanding.

EXPLANATORY NOTE

Mycotopia Therapies, Inc. (the “Company”) filed its Quarterly Report on Form 10-Q for the three months ended March 31, 2022, with the Securities and Exchange Commission (“SEC”) on May 23, 2022 (the “Original Form 10-Q”). This Amendment No. 1 on Form 10-Q/A is being filed to reflect the restatement of accrue expenses – related party, common stock, additional paid-in capital, general and administrative expense, net loss, and net loss per share (the “Restatement”) in the consolidated balance sheet and statement of operations for the three months ended March 31, 2022.

The Restatement is due to the Company performing an evaluation of its accounting in connection with the employment agreement entered into between Mycotopia Therapies, Inc. (“Mycotopia”) and Ben Kaplan, the Company’s CEO. Management determined that the does not give effect to $360,000 cash compensation owed through March 31, 2022 and the issuance of a warrant (the “Warrant”) to purchase shares 5% of the fully diluted common stock outstanding of Mycotopia. The cash compensation and Warrant was granted to the Chief Executive Officer of the Company pursuant to his consulting agreement with Mycotopia entered into on November 17, 2021. On April 25, 2023, management concluded its evaluation and determined that the identified errors require the filing of Amendment No. 1, as further discussed in Notes 1 and 4 to the consolidated financial statements included in this Form 10-Q/A.

Mycotopia Therapies, Inc.

Form 10-Q/A for the Quarter Ended March 31, 2022

TABLE OF CONTENTS

Item		Page
	Part I—Financial Information
1	Financial Statements	4
	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (restated) (unaudited)	4
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (restated) (unaudited)	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (restated) (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (restated) (unaudited)	7
	Notes to the Unaudited Condensed Consolidated Financial Statements	8
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
3	Quantitative and Qualitative Disclosures about Market Risk	15
4	Controls and Procedures	16
	Part II—Other Information
6	Exhibits	17
	Signatures	18

PART I–FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Mycotopia Therapies, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
	March 31,		December 31,
	2022		2021
	(Restated)		(Restated)
CURRENT ASSETS
Cash	1,482,475	$	1,267,519
TOTAL CURRENT ASSETS	1,482,475		1,267,519
NON-CURRENT ASSETS
Property and equipment, net	2,249		2,497
TOTAL ASSETS	1,484,724	$	1,270,016
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)	****	****	****
CURRENT LIABILITIES
Accounts payable and accrued expenses	47,006	$	121,031
Accrued expenses - related party	360,000		338,000
Accrued interest - shareholder loan	8,036		10,339
Shareholder loan	125,000		125,000
TOTAL CURRENT LIABILITES	540,042		594,370
Convertible Note Payable, net of debt discount	278,557		123,625
Shareholder loan payable, non-current	500,000		500,000
TOTAL LIABILITIES	1,318,599		1,217,995
MEZZANINE EQUITY
Preferred stock, 0.001 par value; 5,000,000 shares authorized, and 8,000 and 0, as of March 31, 2022 and December 31, 2021; liquidation preference of 80,000 and 0, respectively	8		-
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 0.001 par value, 100,000,000 shares authorized; 14,332,374 and 13,967,332, shares issued and outstanding, respectively.	14,321		13,966
Additional paid-in capital	6,624,271		5,205,820
Accumulated deficit	(6,472,475)		(5,167,765)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	166,125		52,021
TOTAL LIABILITIES, MEZZANINE EQUITY (DEFICIT) AND STOCKHOLDERS’ EQUITY (DEFICIT)	1,484,724	$	1,270,016
The accompanying notes are an integral part of these consolidated financial statements

All values are in US Dollars.

Mycotopia Therapies, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended March 31,
	2022		2021
		(Restated)
OPERATING EXPENSE
General and administrative	$	1,122,107	$	7,702
TOTAL OPERATING EXPENSES		1,122,107		7,702
NET LOSS FROM OPERATIONS	****	(1,122,107)	****	(7,702)
OTHER (EXPENSE) INCOME
Interest expense		(179,906)		-
Interest expense - related party		(2,697)		(538)
TOTAL OTHER (EXPENSE) INCOME		(182,603)		(538)
NET LOSS BEFORE PROVISION FOR INCOME TAXES		(1,304,710)		(8,240)
Provision for income taxes		-		-
NET LOSS	$	(1,304,710)	$	(8,240)
NET LOSS PER SHARE – BASIC AND DILUTED	$	(0.09)	$	(0.00)
AVERAGE NUMBER OF COMMON SHARE OUTSTANDING – BASIC AND DILUTED		14,249,005		12,925,420

The accompanying notes are an integral part of these consolidated financial statements

MYCOTOPIA THERAPIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) AND MEZZANINE EQUITY (DEFICIT)
(Unaudited)
	Common Stock			Additional	Accumulated
	Shares	Amount	Amount	Paid-In Capital	Deficit	Total
Balance as of December 31, 2020	12,925,420	12,925		-	$(29,174)	$(16,249)
Net loss for the three months ended, March 31, 2021	-	-	-	-	(8,240)	$(8,240)
Balance as of March 31, 2021	12,925,420	12,925	$-	$-	$(37,414)	$(24,489)
Balance as of December 31 , 2021 (Restated)	13,967,332	13,966	$-	$5,205,820	(5,167,765)	$52,021
Stock based compensation	322,122	322	-	1,018,492	-	1,018,814
Sale of preferred shares in private placements	-	-	15	149,985.00	-	150,000
Conversion of preferred to common	32,920	33	(7)	(26)	-	-
Debt discount on convertible debt and warrants	-	-	-	250,000	-	250,000
Net loss for the three months ended, March 31, 2022	-	-	-	-	(1,304,710)	(1,304,710)
Balance as of March 31, 2022 (Restated)	$14,322,374	14,321	$8	$6,624,271	$(6,472,475)	$166,125
The accompanying notes are an integral part of these consolidated financial statements

All values are in US Dollars.

Mycotopia Therapies, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the Three Months Ended, March 31,
		2022		2021
	(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(1,304,710)	$	(8,240)
Adjustments to Reconcile Net Income (Loss) to Net Cash Used In Operating Activities:
Depreciation expense		248		-
Amortization of debt discount		154,932		-
Stock based compensation		1,018,814		-
Changes in Operating Assets and Liabilities:
Increase (Decrease) in accounts payable and accrued expenses		(74,025)		538
Increase in accrued expenses - related party		22,000		-
Accrued interest - shareholder loan		(2,303)		-
NET CASH USED IN OPERATING ACTIVITES		(185,044)		(7,702)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of preferred stock		150,000		-
Proceeds from the issuance of convertible debt		250,000		-
NET CASH PROVIDED (USED) BY FINANCING ACTIVITES		400,000		-
NET CHANGE IN CASH		214,956		(7,702)
CASH AT BEGINNING OF PERIOD		1,267,519		110,747
CASH AT END OF PERIOD	$	1,482,475	$	103,045
Cash paid during the period:
Cash paid for interest	$	5,000	$	-
Cash paid for income taxes	$	-	$	-
Supplemental Disclosure of Non-Cash Financing Activities:
Conversion of preferred to common stock	$	70,000	$	-
Debt discount on convertible note payable	$	250,000	$	-
The accompanying notes are an integral part of the consolidated financial statements.

MYCOTOPIA THERAPIES, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022 and 2021

(Restated)

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 75.77% of the Company’s then-outstanding stock and there was a change in control of the board of directors, the transaction was accounted for as a reverse merger in which Mycotopia Therapies, Inc. was deemed to be the accounting acquirer and the Company the legal acquirer. Subsequent to the transaction, the Company changed its name from 20/20 Global, Inc. to Mycotopia Therapies, Inc.

As a result of the transaction, the historical consolidated financial statements of the Company for periods prior to the date of the transaction are those of Mycotopia Therapies, Inc., as the accounting acquirer, and all references to the consolidated financial statements of the Company apply to the historical financial statements of Mycotopia Therapies, Inc. prior to the transaction and the consolidated financial statements of the Company subsequent to the transaction.

NOTE 2 - GOING CONCERN

The accompanying 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 three months ended March 31, 2022, the Company incurred a net loss of $1,304,710, had negative cash flows from operations of $185,044 and may incur additional future losses. At March 31, 2022, the Company had total current assets of $1,482,475 and total current liabilities of $540,042 resulting in working capital deficit of $942,433.

The Company’s existence is dependent upon management’s ability to develop profitable operations. 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 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.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (RESTATED)

Restatement of Previously Issued Financial Statements

Subsequent to the Company’s filing of its Annual Report on Form 10-Q for the three months ended March 31, 2022, with the Securities and Exchange Commission on May 23, 2022, the Company performed an evaluation of its accounting in connection with the employment agreement entered into between the Company and Ben Kaplan, the Company’s CEO. Management determined that the Original Form 10-Q does not give effect to $288,000 annual cash compensation and the issuance of a warrant (the “Warrant”) to purchase shares 5% of the fully diluted common stock outstanding of the Company. The cash compensation and Warrant was granted to the Chief Executive Officer of the Company pursuant to his consulting agreement (the “Consulting Agreement”) with Mycotopia entered into on November 17, 2021. Management concluded on April 25, 2023 that it has identified errors in its calculation of compensation in relation to the Consulting Agreement. Accordingly, the Company restates its consolidated financial statements in this Form 10-Q/A as outlined further below and in Note 4 - Related Party Transactions*.*

The following table sets forth the effects of the adjustments on affected items within the Company’s previously reported consolidated balance sheets for the period ended March 31, 2022.

		As Reported		Adjustment		As Restated
Accrued expenses – related party	$	-	$	360,000	$	360,000
Total current liabilities	$	180,042	$	360,000	$	540,042
Total liabilities	$	958,599	$	360,000	$	1,318,599
Additional paid-in capital	$	4,450,034	$	2,174,237	$	6,624,271
Accumulated deficit	$	(3,938,238)	$	(2,029,861)	$	(6,472,475)
Total stockholders’ equity	$	526,125	$	(360,000)	$	166,125

The following table sets forth the effects of the adjustments on affected items within the Company’s previously reported consolidated statements of operations for the three months ended March 31, 2022.

	As Reported		Adjustment		As Restated
General and administrative	$	905,731	$	216,376	$	1,122,107
Total operating expenses	$	905,731	$	216,376	$	1,122,107
Loss from operations	$	(905,731)	$	(216,376)	$	(1,122,107)
Net loss before provision from income taxes	$	(1,088,334)	$	(216,376)	$	(1,304,710)
Net loss	$	(1,088,334)	$	(216,376)	$	(1,304,710)
Basic and diluted loss per share	$	(0.08)	$	(0.01)	$	(0.09)

Additionally, please refer to Note 4. – Related Party Transactions, where the Company has included additional disclosure related to the CEO’s consulting agreement with the Company.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Updates, or ASUs, of the Financial Accounting Standards Board, or FASB.

Basis of Consolidation

The accompanying 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 $248 and $0 for the three months ended March 31, 2022 and 2021, respectively. The estimated useful lives are as follows: buildings and improvements—30 years; machinery and equipment—10-15 years; computer software—3-5 years; vehicles—3-7 years; and land improvements—10-20 years. We assess our long-lived assets for impairment whenever there is an indicator of impairment. Impairment losses are evaluated if the estimated undiscounted cash flows from using the assets are less than carrying value. A loss is recognized when the carrying value of an asset exceeds its fair value. There were no impairment losses in the three months ended March 31, 2022 and 2021.

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 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 three months ended March 31, 2022 and 2021.

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 March 31, 2022 and December 31, 2021, the Company had a full valuation allowance against its deferred tax assets.

We adopted 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 D iluted N et L oss per S hare

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 1,377,263 and 0 for the three months ended March 31, 2022 and 2021, respectively, and the outstanding warrants that totaled 1,680,265 and 0 for the three months ended March 31, 2022 and 2021, respectively.

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 (RESTATED)

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 1.75% per year. As of March 31, 2022 and December 31, 2021, the Company owed $625,000 and $625,000, respectively. As of March 31, 2022 and December 31, 2021, the Company owed accrued interest related to these loans of $8,036 and $10,339, respectively. During the three months ended March 31, 2022 and 2021, the Company recorded interest expense of $2,697 and $538, respectively, in relation to these notes.

Mycotopia Consulting Agreement with the CEO

On November 17, 2021, the Company 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 March 31, 2022, the Company has recorded $360,000 for cash compensation as accrued expense - related party in relation to the Mycotopia Consulting Agreement. During the three months ended March 31, 2022 and 2021, the Company has recorded $216,376 and $0, respectively, as general and administrative expense, of which $144,376 was recorded as stock-based compensation in relation to the Warrant issued, in connection with the Mycotopia Consulting Agreement.

Significant terms of the Mycotopia Consulting Agreement are as follows:

BK was granted a Warrant to purchase that number of shares of Mycotopia common stock equal to 5% of the issued and outstanding Mycotopia common shares, on a fully diluted basis. The Warrant has an exercise price of $0.01 per share and shall expire November 16, 2023.

During the three months ended March 31, 2022, the Company issued 49,814 vested warrants valued at $144,376 (please see Note 6).

Bonus

The Company will pay the CEO a bonus in restricted stock or restricted stock units based on the following EBITDA milestones. As of March 31, 2022, no EBITDA milestones were met, and no amounts have been recorded for the bonus milestones.

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’s market capitalization by maintaining the below market cap for Mycotopia 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, 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 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. As of March 31, 2022 and December 31, 2021, the Company did not grant any equity in relation to a Significant Transaction.

As of March 31, 2022, no amounts have been accrued related to the bonuses.

NOTE 5 – PROMISSORY AND CONVERTIBLE NOTES

As of March 31, 2022 and December 31, 2021, the Company had outstanding to various lenders as convertible promissory notes an aggregate amount of $1,332,500. In aggregate, as of March 31, 2022 the principal amount includes $171,000 of original issue discount. All notes are due to mature 24 months from their respective effective date and mature beginning on August 27, 2023 through January 21, 2024. Additionally, the effective interest rate of the notes is 8% and they are convertible into shares of common stock at $1.00 per share.

The following tables reflects a summary of the outstanding principal and interest by each lender and their respective maturity date as of March 31, 2022 and December 31, 2021:

			March 31, 2022						December 31, 2021
****	Maturity Date	****	Total Outstanding***	****	Principal	****	Interest		Total Outstanding***	****	Principal	****	Interest
Lender A	8/27/2023	$	524,020	$	500,000	$	24,020	$	513,883	$	500,000	$	13,883
Lender B	9/27/2023	****	57,379		55,000.00		2,379		56,269		55,000		1,269
Lender C	10/27/2023	****	227,536		220,000		7,536		223,134		220,000		3,134
Lender D	11/9/2023	****	28,362		27,500		862		27,813		27,500		313
Lender E	10/21/2023	****	56,958		55,000		1,958		55,856		55,000		856
Lender F	12/27/2023	****	153,093		150,000		3,093		150,132		150,000		132
Lender G	1/21/2024	****	329,915		325,000		4,915		-		-		-
		$	1,377,263	$	1,332,500	$	44,763	$	1,027,087	$	1,007,500	$	19,587
			*** - Total Outstanding = Principal + Interest as of March 31, 2022 and December 31, 2021

During the three months ended March 31, 2022 and 2021, the Company recorded an aggregate debt discount of $325,000 and $0, respectively, under the terms of convertible promissory note agreement. The total debt discount recorded during the three months ended March 31, 2022 was allocated between the original issue discount related to cash financing fees of $75,000, as well as $250,000 recorded as an offset to additional paid-in capital in connection with the beneficial conversion feature and warrants (see Note 6).

During the three months ended March 31, 2022 and 2021, the Company recorded debt discount amortization expense in the amount of $18,925 and $0, respectively. As of March 31, 2022, the Company had an unamortized debt discount balance of $1,199,525 with a weighted amortization period of 2.59 years.

NOTE 6 – STOCKHOLDERS’ EQUITY (RESTATED)

We are authorized to issue 100,000,000 shares of common stock, $0.001 par value, and5,000,000 shares of preferred stock, $0.001 par value. Each share of common stock entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

Mezzanine Equity

The Preferred Shares are recorded as mezzanine equity in accordance with ASC 480, “Distinguishing Liabilities from Equity,” 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 three months ended March 31, 2022, the Company sold 15,000 shares of preferred stock to three shareholders for $150,000 in proceeds. The shares are allowed to convert into common stock by option of the holder at any time based on the fair market value of the common stock at the date of the conversion. During the three months ended March 31, 2022, 7,000 shares of preferred stock were converted into 32,920 shares of common stock.

As of March 31, 2022 and December 31, 2021, there were 8,000 and 0 shares of preferred stock outstanding.

STOCK BASED COMPENSATION

On January 21, 2022, the Company issued 250,000 shares of common stock to a related party and majority shareholder, Benjamin Kaplan, as part of his compensation for services rendered in accordance with his Agreement (Note 7) for services rendered as CEO. The Company expensed $750,000 in relation to this issuance.

On January 24, 2022, the Company issued 12,500 shares of common stock to a consultant for services rendered. The Company expensed $38,188 in relation to this issuance.

On March 17, 2022, the Company issued 59,622 shares of common stock valued at $86,250 for consulting services rendered in a prior period.

Warrants Issued

During the three months ended March 31, 2022, the Company issued 166,667 warrants to purchase common stock as part of the convertible promissory notes discussed above in Note 5.

During the three months ended March 31, 2022, the Company issued 49,814 warrants to purchase common stock as part of the consulting agreement with the Company’s CEO, Ben Kaplan. The warrants were valued at $144,376 and were recorded as stock-based compensation. The warrants were valued using the black-scholes option pricing model with the following terms a) stock price of $2.90, b) exercise price of $0.01, c) discount rate of 2.28%, d) volatility of 371%, d) dividend yield of 0%, and f) term of 1.63 years.

The following table reflects a summary of Common Stock warrants outstanding and warrant activity during the three months ended March 31, 2022

		Weighted Average Exercise Price
Warrants outstanding at January 1, 2022 (restated)	1,463,784	$	0.67	1.83
Granted	216,481		1.16	1.77
Exercised	-		-	-
Forfeited	-		-	-

Warrants outstanding and exercisable at March 31, 2022	1,680,265	$	0.74	1.61

The intrinsic value of warrants outstanding as of March 31, 2022, was $3,636,650.

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 March 31, 2022, the date of our most recent balance sheet, through the date our financial statements were issued, and there are no events requiring disclosure.

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 Policies and Estimates

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles in the United States, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the notes to our March 31, 2023, financial statements. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. We cannot assure that actual results will not differ from those estimates.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. These estimates and assumptions are reviewed on an on-going basis and updated as appropriate. Actual results could differ from those estimates. The Company’s estimates include the allowance for doubtful accounts and useful lives of property plant and equipment.

Depreciation of equipment is dependent upon estimates of useful lives and residual values, both of which are determined through the exercise of judgement. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that consider factors such as economic/market conditions and the useful lives of assets.

Results of Operations

Comparison of the Three Months Ended March 31, 202 2 and 202 1

Sales and Cost of Sales

Due to the termination of our fresh produce business, we did not have any revenue or cost of revenue from operations for the three months ended March 31, 2022, and 2021.

Operating Expenses from Operations

Operating expenses from operations for the three months ended March 31, 2022, and 2021, consisted of general and administrative expenses of $1,122,107 and $7,702, 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 the significant increase in stock-based compensation.

Other Income (Expense)

Other expenses of $182,603 and $538 for the three months ended March 31, 2022, and 2021, respectively, consisted of interest expense from convertible notes with debt discounts and interest expense from related parties.

Net Loss

We had a net loss for the three months ended March 31, 2022, and 2021, of $1,304,710 and $8,240, respectively.

Liquidity and Capital Resources

As of March 31, 2022, we had a working capital deficiency of $942,433, an increase from a working capital deficiency of $266,787 as of December 31, 202. As of March 31, 2022, we had current assets of $1,482,475, consisting solely of cash. As of March 31, 2022, our current liabilities consisted predominantly of accounts payable and accrued interest, accrued expenses – related party and convertible notes payable. We had an accumulated deficit of $6,472,475 as of March 31, 2022, an increase from an accumulated deficit of $5,167,765 as of December 31, 2021.

Operating activities used net cash of $185,044 for the three months ended March 31, 2022, as compared to using net cash of $7,702 for the three months ended March 31, 2021. Investing activities used net cash of $0 and $0, respectively, for the three months ended March 31, 2022, and 2021. Cash provided by financing activities was $400,000 for the three months ended March 31, 2022, as compared to $0 for the three months ended March 31, 2021. We had a cash balance of $1,482,475 and $1,267,519 as of March 31, 2022, and December 31, 2021, respectively.

Our monthly operating costs averaged approximately $60,000 per month for the three months ended March 31, 2022, excluding capital expenditures. We plan to fund our operations with our 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, which includes successfully integrating Mycotopia Therapies, Inc. which was acquired subsequent to December 31, 2020. 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 March 31, 2022. 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 March 31, 2022.

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.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None

Item 6. Exhibits

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: October 17, 2023	By:	/s/ Ben Kaplan
	Name:	Ben Kaplan
	Title:	Chief Executive Officer and Principal Accounting Officer