Mitesco Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001185185-24-000529
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001185185-24-000820
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 26 previous paragraphs and 57 current paragraphs.
14 unchanged; 10 reworded; 31 added; 2 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
In June 2024 we announced the formation of two (2) new wholly owned business units, Centcore, LLC, who is providing data center services including cloud computing and application hosting, and Vero Technology Ventures, LLC, whose aim is to seek investment and acquisition opportunities, generally in the areas of cloud computing and data center related applications.
Current report
Centcore has two (2) areas of focus. The first, generic data center services, is aimed at hosting applications for a specific user, sometimes referred to as “managed services offerings” or MSO, where the client moves the software licensed from various vendors, or internally developed, into our data center where we maintain the computing, communications and backup environment. The second focus involves hosting application software developed by software vendors, from which they will sell the use of the software by their end user clients on a “cloud” basis. By taking this approach we gain the business of the vendor, and their clients, perhaps allowing us to grow at a faster rate with lower cost of sales. We have developed the “Centcore Partner Program” where we will help promote the software vendors who are hosting in our data centers. If we are successful helping the vendor grow his business, we will have provided a “value added service”, and benefit from increased utilization of our computing resources by not only the vendor, but also his new end user clients. Our initial focus for this area is on software providers who serve the “infrastructure” market doing design, engineering, construction and maintenance of significant assets. We desire to create “life cycle” relationships with both the design teams, and owners which may include private owners such as manufacturers and utilities, or publicly owned assets for municipalities, states or federal governments, domestically and internationally.
Current report
We have retained proven professionals in the data center, cyber security and infrastructure services areas to support our needs on a per hour basis, which we believe will allow us to control our costs relative to business activity, without significant staffing internally.
Current report
Revenues
Current report
We had revenues of $6,000 for the three months ended June 30, 2024, compared to $0 in the comparable period. The revenues were related to our newly formed subsidiary Centcore, LLC.
Current report
During the three months ended June 30, 2023, we recorded equity investment incentives of approximately $6.4 million. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a gain on forgiveness of debt of $25,000. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a gain on sale of assets of $20,097. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a gain on issuance of shares to a service provider of $33,092. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a loss on settlement of true-up obligation of $119,370. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a loss on legal settlement of $18,759. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a gain on revaluation of derivative liabilities of $39,738. There were no comparable transactions in the current period.
Current report
Comparison of the Six Months Ended June 30, 2024, and 2023.
Current report
Revenues
Current report
We had revenues of $6,000 for the six months ended June 30, 2024, compared to $0 in the comparable period. The revenues were related to our newly formed subsidiary Centcore, LLC.
Current report
Operating Expenses
Current report
Other Income and Expenses
Current report
Interest expense was $108,227 for the six months ended June 30, 2024, compared to 1,505,502 for the six months ended June 30, 2023. The decrease was a result of reduced debt balances in the current period.
Current report
Interest expense – related parties was $15,546 for the six months ended June 30, 2024, compared to $73,523 in the prior period. The decrease was a result of reduced debt balances in the current period.
Current report
During the six months ended June 30, 2024, we recorded a gain on termination of operating lease of approximately $233,000. There were no comparable transactions in the prior period.
Current report
During the six months ended June 30, 2023, we recorded equity investment incentives of approximately $6.4 million. There were no comparable transactions in the current period.
Current report
During the six months ended June 30, 2023, we recorded a gain on forgiveness of debt of $25,000. There were no comparable transactions in the current period.
Current report
During the six months ended June 30, 2023, we recorded a gain on sale of assets of $20,097. There were no comparable transactions in the current period.
Current report
During the six months ended June 30, 2023, we recorded a gain on issuance of shares to a service provider of $33,092. There were no comparable transactions in the current period.
Current report
During the six months ended June 30, 2023, we recorded a loss on settlement of true-up obligation of $119,370. There were no comparable transactions in the current period.
Current report
During the three months ended June 30, 2023, we recorded a loss on legal settlement of $18,759. There were no comparable transactions in the current period.
Current report
During the six months ended June 30, 2023, we recorded a loss on revaluation of derivative liabilities of $71,040. There were no comparable transactions in the current period.
Current report
We have agreements from three (3) of our institutional investors to provide interim funding so that the Company may stay current with its accounting and reporting requirements under the Securities Act of 1934, settle obligations from the prior healthcare clinic operations and find a new business area to engage within. The team performing the work effort is doing so with no cash compensation, either paid or accrued. Through June 30, 2024, the total amount loaned under 12-month, 10% interest simple notes is $300,000, with roughly $200,000 attributable to accounting and compliance, $50,000 generally related to settlements and legal related, with the remaining for general expenses including T&E and communications.
Current report
In May 2024 we reached an agreement with the holders of our Series F Preferred shares to waive all interest payments permanently beginning May 15, 2024. This creates a reduction in accrued interest of over $200,000 per month. Similar adjustments with other holders of debt and interest paying equity are expected.
Current report
The Company is working with its institutional investors on a plan to eliminate all existing obligations through the issuance of a new preferred stock which would be issued to the holder in lieu of debt. It is envisioned that this stock would be listed and traded separately from the Company’s common stock. This plan is in its early stages and there can be no guarantee that it will be fully implemented, approved by the SEC for trading, or accepted by all creditors, some of which may be required to see a reduction in the amounts currently owned in order to get consent from the larger investor group.
Current report
The Company has relationships with a number of consultants who are assisting in the creation of the new business units. It is anticipated that this approach will continue indefinitely as it does not desire to create the overhead associated with a large employment force.
Removed paragraphs (2)
Previous report
We have undertaken the following action plan to improve our liquidity: (i) We have raised approximately $194,000 from the sale of office equipment, supplies, and other assets; (ii) several institutional investors have invested in our Series F Preferred Stock; (iii) we have restructured our SBA Loan; (iv) we are negotiating with vendors to convert our accounts payable into common stock or Series F Preferred stock, (iv) We are negotiating with lenders to convert our notes payable into restricted common or preferred stock, or revise the terms of the notes; (v) We are negotiating with landlords to resolve the amounts due under the leases by offering to convert these amounts to equity or promissory notes. See below for details regarding the progress we have made in the implementation of this plan.
Previous report
Initial funds raised via the above efforts will be used primarily to complete the Company’s SEC filings and to fund legal costs related to the winding down of our previous operations.
Reworded paragraphs (10)
Previous wording
We have a number of near-term opportunities that we hope to pursue, assuming the capital markets make sufficient funding available at reasonable rates. During the first quarter of 2024 we recruited a number of individuals to a newly formed Advisory Board, who might assist the Company in determining the viability of certain ventures going forward. These individuals have a background in data center services, cyber and data security and software applications related to infrastructure design, implementation and management including geographical information systems (GIS). We expect to announce in the second quarter of 2024 the formation of a new, wholly owned subsidiary whose business will be focused on those areas generally. Until those announcements are made effective in the second quarter of 2024, the Company has no operating business other than the winding down of its previous operations.
Current wording
We are a holding company seeking to provide products, services and technology. We have a number of near-term opportunities that we hope to pursue, assuming the capital markets make sufficient funding available at reasonable rates. During the first quarter of 2024 we recruited a number of individuals to a newly formed Advisory Board, who might assist the Company in determining the viability of certain ventures going forward. These individuals have a background in data center services, cyber and data security and software applications related to infrastructure design, implementation and management including geographical information systems (GIS).
Previous wording
Our total operating expenses for the three months ended March 31, 2024, were $135,476. For the comparable period in 2023, the operating expenses were $1,344,426. The decrease is the result of the winding down of the Company’s clinic operations with The Good Clinic, LLC subsidiary.
Current wording
Our total operating expenses for the three months ended June 30, 2024, were $345,877. For the comparable period in 2023, the operating expenses were $558,277. The decrease is the result of the winding down of the Company’s clinic operations with The Good Clinic, LLC subsidiary.
Previous wording
Interest expense was $40,624 for the three months ended March 31, 2024, compared to 1,376,066 for the three months ended March 31, 2023. The decrease was a result of reduced debt balances in the current period.
Current wording
Interest expense was $67,603 for the three months ended June 30, 2024, compared to 129,436 for the three months ended June 30, 2023. The decrease was a result of reduced debt balances in the current period.
Previous wording
Interest expense – related parties was $10,581 for the three months ended March 31, 2024, compared to $44,777 in the prior period. The decrease was a result of reduced debt balances in the current period.
Current wording
Interest expense – related parties was $4,965 for the three months ended June 30, 2024, compared to $29,954 in the prior period. The decrease was a result of reduced debt balances in the current period.
Previous wording
For the three months ended March 31, 2024, we had a net loss available to common shareholders from discontinued operations of $0, compared to a net loss available to common shareholders from discontinued operations of $2,325,044.
Current wording
For the three months ended June 30, 2024, we had a net loss available to common shareholders from discontinued operations of $0, compared to a net loss available to common shareholders from discontinued operations of $373,759.
Previous wording
To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through sale of equity securities and short-term borrowings. As of May [ ], 2024, we had cash of approximately $12,000 compared to cash of approximately $41,000 as of March 31, 2024.
Current wording
To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of equity securities and short-term borrowings. As of August [ ], 2024, we had cash of approximately $[ ] compared to cash of approximately $40,000 as of June 30, 2024. Our Company’s recurring losses from operations and negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern.
Previous wording
Net cash used in operating activities was $154,267 for the three months ended March 31, 2024. This is the result of the winding down of the Company’s clinic operations. Cash used in operations for the three months ended March 31, 2023, was $35,324.
Current wording
Net cash used in operating activities was $248,157 for the six months ended June 30, 2024. This is the result of the winding down of the Company’s clinic operations. Cash used in operations for the six months ended June 30, 2023, was $518,232.
Previous wording
The Company had no investing activities for the three months ended March 31, 2024 and 2023.
Current wording
The Company had no investing activities for the six months ended June 30, 2024, and 2023.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2024, was 192,214, compared to $0 for the three months ended March 31, 2023. Cash provided by financing activities was the result of cash proceeds from notes payable, offset by the repayment of principal on the SBA loan in the amount of $7,786
Current wording
Net cash provided by financing activities for the six months ended June 30, 2024, was $285,515, compared to $738,500 for the six months ended June 30, 2023. Cash provided by financing activities was the result of cash proceeds from notes payable, offset by the repayment of principal on the SBA loan in the amount of $7,786.
Previous wording
At March 31, 2024, we had the following current liabilities which are payable in cash: Accounts payable and accrued liabilities of $7.4 million; notes payable of $1.3 million; notes payable to related parties of $.2 million; SBA Loan Payable of $0.4 million; legal settlements of $2.5 million; accrued interest payable of $0.4 million; accrued interest payable to related parties of $0.01 million; and other current liabilities of $0.1 million. We also have the following liabilities which are payable in stock: derivative liabilities of $0.2 million, preferred stock dividends of $2.0 million, and preferred stock dividends payable to related parties of $0.2 million.
Current wording
At June 30, 2024, we had the following current liabilities which are payable in cash: Accounts payable and accrued liabilities of $7.4 million; notes payable of $1.2 million; notes payable to related parties of $.3 million; SBA Loan Payable of $0.4 million; legal settlements of $2.5 million; accrued interest payable of $0.4 million; accrued interest payable to related parties of $0.01 million; and other current liabilities of $0.1 million. We also have the following liabilities which are payable in stock: derivative liabilities of $0.2 million, preferred stock dividends of $2.3 million, and preferred stock dividends payable to related parties of $0.2 million.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Our total operating expenses for the six months ended June 30, 2024, were $481,353. For the comparable period in 2023, the operating expenses were $2,188,180. The decrease is the result of the winding down of the Company’s clinic operations with The Good Clinic, LLC subsidiary.
Current report — wording carried from elsewhere
For the three months ended June 30, 2024, we had a net loss available to common shareholders from discontinued operations of $0, compared to a net loss available to common shareholders from discontinued operations of $2,698,803.