# EDGAR Filing Document

**Accession Number:** 0001502966
**File Stem:** 0001493152-26-023548
**Filing Date:** 2026-5
**Character Count:** 100050
**Document Hash:** 47427e2f8e95a3d1a5bad749d947ed66
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-023548.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001493152-26-023548

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 72

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260515

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Hypha Labs, Inc.
- **CENTRAL INDEX KEY:** 0001502966
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-TESTING LABORATORIES [8734]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 273601979
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-54239
- **FILM NUMBER:** 26985390

**BUSINESS ADDRESS:**
- **STREET 1:** 5940 S. RAINBOW BOULEVARD
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89118
- **BUSINESS PHONE:** (702) 744-0640

**MAIL ADDRESS:**
- **STREET 1:** 5940 S. RAINBOW BOULEVARD
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89118

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Digipath, Inc.
- **DATE OF NAME CHANGE:** 20180919

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DigiPath,Inc.
- **DATE OF NAME CHANGE:** 20101006

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For Quarterly Period Ended March 31, 2026**

**or**

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from __________ to __________**

**Commission File Number 000-54239**

![](form10-q_001.jpg)

**<u>Hypha Labs, Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **27-3601979** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **5940 S. Rainbow Boulevard, Las Vegas, NV** | **89118** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>(702) 527-2060</u>**

(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 |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.

---

| | | | |
|:---|:---|:---|:---|
| 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).

---

| | | | |
|:---|:---|:---|:---|
| 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 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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

---

| | | | |
|:---|:---|:---|:---|
| Yes | ☐ | No | ☒ |

---

The number of shares of the registrant's common stock outstanding as of May 15, 2026 was 163,895,977.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page**<br>**No.** |
| **[PART I - FINANCIAL INFORMATION](#HK_001)** | **[PART I - FINANCIAL INFORMATION](#HK_001)** | 3 |
| ITEM 1. | [FINANCIAL STATEMENTS](#HK_002) | 3 |
|  | [Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and September 30, 2025](#HK_003) | 3 |
|  | [Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2026 and 2025 (Unaudited)](#HK_004) | 4 |
|  | [Consolidated Statements of Stockholders' Deficit for the Three and Six Months Ended March 31, 2026 and 2025 (Unaudited)](#HK_005) | 5 |
|  | [Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2026 and 2025 (Unaudited)](#HK_006) | 6 |
|  | [Notes to the Consolidated Financial Statements (Unaudited)](#HK_007) | 7 |
| ITEM 2. | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#JA_001) | 21 |
| ITEM 3. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#JA_002) | 25 |
| ITEM 4. | [CONTROLS AND PROCEDURES](#JA_003) | 25 |
| **[PART II - OTHER INFORMATION](#JA_004)** | **[PART II - OTHER INFORMATION](#JA_004)** | 26 |
| ITEM 1. | [Legal Proceedings](#JA_005) | 26 |
| ITEM 1A. | [RISK FACTORS](#JA_006) | 26 |
| ITEM 2. | [UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#JA_007) | 26 |
| ITEM 3. | [DEFAULTS UPON SENIOR SECURITIES](#JA_008) | 26 |
| ITEM 4. | [MINE SAFETY DISCLOSURES](#JA_009) | 26 |
| ITEM 5. | [OTHER INFORMATION](#JA_010) | 26 |
| ITEM 6. | [EXHIBITS](#JA_011) | 26 |
|  | [SIGNATURES](#JA_012) | 27 |

---

**PART I – FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**.

**HYPHA LABS, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **September 30,**<br> **2025** |
|  | (Unaudited) | |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $82200 | $38118 |
| &nbsp;&nbsp;&nbsp;Note receivable, net |  |  |
| &nbsp;&nbsp;&nbsp;Prepaids and other current assets | 14175 | 26560 |
| &nbsp;&nbsp;&nbsp;Deferred offering costs | - | 255853 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 96375 | 320531 |
| Fixed assets, net | 56766 | 62507 |
| Right-of-use asset, net | 6678 | 26180 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 63444 | 88687 |
| &nbsp;&nbsp;&nbsp;Total Assets | $159819 | $409218 |
| **Liabilities and Stockholders' Deficit** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $630315 | $472551 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 319169 | 263026 |
| &nbsp;&nbsp;&nbsp;Accrued expenses – related party | 184901 | 130462 |
| &nbsp;&nbsp;&nbsp;Current maturities of notes payable, net of discounts | 293513 | 226078 |
| &nbsp;&nbsp;&nbsp;Lease liabilities - current | 6842 | 26838 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1434740 | 1118955 |
| Notes payable, net of current | 123100 | 89600 |
| Convertible notes payable, net of current and discounts | 1384582 | 1303832 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities | 2942422 | 2512387 |
| Commitments and contingent liabilities (Note 13) |  |  |
| Mezzanine Equity |  |  |
| Series B convertible preferred stock, $0.001 par value, 1,500,000 shares authorized; 333,600 shares issued and outstanding as of March 31, 2026 and September 30, 2025 | 333600 | 333600 |
| Stockholders' Deficit: |  |  |
| &nbsp;&nbsp;&nbsp;Series A convertible preferred stock, $0.001 par value, 6,000,000 shares authorized; 1,047,942 shares issued and outstanding as of March 31, 2026 and September 30, 2025 | 1048 | 1048 |
| &nbsp;&nbsp;&nbsp;Series D preferred stock, $0.001 par value, 60,000,000 shares authorized; 700,313 and 390,250 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively | 700 | 390 |
| &nbsp;&nbsp;&nbsp;Series C preferred stock, $0.001 par value, 1,000 shares authorized; 1,000 shares issued and outstanding as of March 31, 2026 and September 30, 2025 | 1 | 1 |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value, 880,000,000 shares authorized; 163,895,977 and 147,121,825 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively | 163895 | 147121 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 21410232 | 21063998 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (24692079) | (23649327) |
| Total Stockholders' Deficit | (3116203) | (2436769) |
| Total Liabilities and Stockholders' Deficit | $159819 | $409218 |

---

See accompanying notes to unaudited consolidated financial statements.

**HYPHA LABS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
|  | **2026** | **2025** | **2026** | **2025** |
| Revenues | $- | $- | $- | $- |
| Cost of sales | - | - | - | - |
| Gross profit |  |  |  |  |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 114389 | 95467 | 300265 | 1150578 |
| &nbsp;&nbsp;&nbsp;Professional fees | 306004 | 573695 | 595148 | 823848 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 420393 | 669162 | 895413 | 1974426 |
| Operating loss | (420393) | (669162) | (895413) | (1974426) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (100721) | (22660) | (147339) | (45034) |
| &nbsp;&nbsp;&nbsp;Recovery of previously written off receivables |  | 50000 |  | 50000 |
| &nbsp;&nbsp;&nbsp;Interest income |  |  |  | 8000 |
| &nbsp;&nbsp;&nbsp;Other expense | - | - | - | (20003) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (100721) | 27340 | (147339) | (7037) |
| Net loss before income taxes | (521114) | (641822) | (1042752) | (1981463) |
| Provision for income taxes | - | - | - | - |
| Net loss | $(521114) | $(641822) | $(1042752) | $(1981463) |
| &nbsp;&nbsp;&nbsp;Weighted average number of common shares outstanding – basic | 159451482 | 131081825 | 155539787 | 127814133 |
| &nbsp;&nbsp;&nbsp;Weighted average number of common shares outstanding – fully diluted | 159451482 | 131081825 | 155539787 | 127814133 |
| &nbsp;&nbsp;&nbsp;Net loss per share from continuing operations – basic | $(0.00) | $(0.00) | $(0.01) | $(0.02) |
| &nbsp;&nbsp;&nbsp;Net loss per share from discontinued operations – diluted | $(0.00) | $(0.00) | $(0.01) | $(0.02) |

---

See accompanying notes to unaudited consolidated financial statements.

**HYPHA LABS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT**

**FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2026 AND 2025**

**(Unaudited)**

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series B Convertible Preferred Stock | Series B Convertible Preferred Stock | Series A Convertible Preferred Stock | Series A Convertible Preferred Stock | Series D<br> Preferred Stock | Series D<br> Preferred Stock | Series C<br> Preferred Stock | Series C<br> Preferred Stock | Common Stock | Common Stock | | | |
|  | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid-in<br>Capital | Accumulated<br>Deficit | Total Stockholders'<br>Deficit |
| Balance, September 30, 2025 | 333600 | $333600 | 1047942 | $1048 | 390250 | $390 | 1000 | $1 | 147121825 | $147121 | $21063998 | $(23649327) | $(2436769) |
| Series D preferred shares issued for cash proceeds net of fees and offering costs |  |  |  |  | 310063 | 310 |  |  |  |  | 54877 |  | 55187 |
| Stock-based compensation |  |  |  |  |  |  |  |  | 8400000 | 8400 | 209731 |  | 218131 |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | (521638) | (521638) |
| Balance, December 31, 2025 | 333600 | 333600 | 1047942 | 1048 | 700313 | 700 | 1000 | 1 | 155521825 | 155521 | 21328606 | (24170965) | (2685089) |
| Common shares issued for conversion of notes payable |  |  |  |  |  |  |  |  | 8374152 | 8374 | 81626 |  | 90000 |
| Net loss | - | - | - | - | - | - | - | - | - | - | - | (521114) | (521114) |
| Balance, March 31, 2026 | 333600 | $333600 | 1047942 | $1048 | 700313 | $700 | 1000 | $1 | 163895977 | $163895 | $21410232 | $(24692079) | $(3116203) |

---

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series B Convertible <br> Preferred Stock | Series B Convertible <br> Preferred Stock | Series A Convertible <br> Preferred Stock | Series A Convertible <br> Preferred Stock | Series C <br> Preferred Stock | Series C <br> Preferred Stock | Common Stock | Common Stock | | | |
|  | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Additional <br> Paid-in<br>Capital | Accumulated<br>Deficit | Total <br> Stockholders'<br>Deficit |
| Balance, September 30, 2024 | 333600 | $333600 | 1047942 | $1048 |  | $- | 123046825 | $123046 | $19163039 | $(20547426) | $(1260293) |
| Stock-based compensation |  |  |  |  |  |  | 3500000 | 3500 | 63500 |  | 67000 |
| Issuance of shares of Series C preferred stock |  |  |  |  | 1000 | 1 |  |  | 968455 |  | 968456 |
| Net loss | - | - | - | - | - | - | - | - | - | (1339641) | (1339641) |
| Balance, December 31, 2024 | 333600 | 333600 | 1047942 | 1048 | 1000 | 1 | 126546825 | 126546 | 20194994 | (21887067) | (1564478) |
| Stock-based compensation |  |  |  |  |  |  | 10075000 | 10075 | 378988 |  | 389063 |
| Net loss | - | - | - | - | - | - | - | - | - | (641822) | (641822) |
| Balance, March 31, 2025 | 333600 | $333600 | 1047942 | $1048 | 1000 | $1 | 136621825 | $136621 | $20573982 | $(22528889) | $(1817237) |

---

See accompanying notes to unaudited consolidated financial statements.

**HYPHA LABS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| **Cash flows from operating activities** |  |  |
| Net loss from continuing operations | $(1042752) | $(1981463) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 218131 | 1424419 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discounts | 39420 |  |
| &nbsp;&nbsp;&nbsp;Default penalties on notes payable charged to interest expense | 44765 |  |
| &nbsp;&nbsp;&nbsp;Deferred offering costs charged to expense | 253556 |  |
| &nbsp;&nbsp;&nbsp;Depreciation expense | 5742 | 3247 |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use asset | 19502 | 12092 |
| Decrease (increase) in assets: |  |  |
| &nbsp;&nbsp;&nbsp;Prepaids and other current assets | 12385 | 245586 |
| Increase (decrease) in liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 157764 | 244227 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 56142 | 35311 |
| &nbsp;&nbsp;&nbsp;Accrued expenses – related parties | 54439 | (7500) |
| &nbsp;&nbsp;&nbsp;Lease liability | (19996) | (17530) |
| Net cash used in operating activities | (200902) | (41611) |
| **Cash flows from investing activities** |  |  |
| Purchase of fixed assets | - | (1730) |
| Net cash used in investing activities | - | (1730) |
| **Cash flows from financing activities** |  |  |
| Proceeds from sale of Series C Preferred shares |  | 100 |
| Proceeds from sale of Series D Preferred shares and warrants, net of fees | 57484 |  |
| Proceeds from convertible notes payable | 150000 |  |
| Proceeds from notes payable | 102500 | 65600 |
| Repayments on notes payable | (65000) |  |
| Payment of deferred offering costs | - | (92432) |
| Net cash provided by (used in) financing activities | 244984 | (26732) |
| Net increase (decrease) in cash | 44082 | (70073) |
| Cash – beginning | 38118 | 91166 |
| Cash – ending | $82200 | $21093 |
| Supplemental disclosures: |  |  |
| Interest paid | $- | $- |
| Income taxes paid | $- | $- |
| Non-cash investing and financing activities: |  |  |
| Amortization of deferred offering costs | $2297 | $- |

---

See accompanying notes to unaudited consolidated financial statements.

**HYPHA LABS, INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**For the Six Months Ended March 31, 2026 and 2025**

**(Unaudited)**

**Note 1 – Nature of Business and Significant Accounting Policies**

Nature of Business

Hypha Labs, Inc. was incorporated in Nevada on October 5, 2010. Hypha Labs, Inc. and its subsidiaries ("Hypha Labs," the "Company," "we," "our" or "us") was a service-oriented independent testing laboratory, data analytics and media firm focused on the developing cannabis and hemp markets, and supported the cannabis industry's best practices for reliable testing. Our mission was to provide pharmaceutical-grade analysis and testing to the cannabis industry, under ISO-17025:2017 guidelines, to ensure consumers and patients knew exactly what was in the cannabis they ingest and to help maximize the quality of our clients' products through research, development, and standardization. Hypha Labs had been operating a cannabis-testing lab in Nevada since 2015.

On February 20, 2024, we completed the sale of the net assets of our wholly-owned subsidiary Digipath Labs, Inc. ("Digipath Labs"). As of that date, we were no longer in the business as a service-oriented independent testing laboratory, data analytics and media firm focused on the developing cannabis and hemp markets, which supported the cannabis industry's best practices for reliable testing, cannabis education and training.

Effective March 12, 2024, the Company amended Article 1 of its Articles of Incorporation to change its name from Digipath, Inc. to Hypha Labs, Inc. Hypha Products, Inc., a wholly owned subsidiary of the Company, was formed on April 18, 2024.

Hypha Products Inc., a wholly owned subsidiary of the Company, was formed on April 18, 2024 to engage in the research, development and commercialization of a bioreactor, the Hypha Micropearl bioreactor, a home appliance designed to accelerate the production of nutritionally beneficial mushrooms for human consumption. The Company's easy-to-use device, together with its replacement cartridges, safely and effectively produces enriched mycelium of functional mushrooms, or Micropearls, in just eight days. These Micropearls contain active mushroom ingredients that offer a way to harness the medicinal properties of fungi in a concentrated, easy-to-handle, tasteless and odorless form. These Micropearls can be incorporated into various food and beverages without altering the flavor.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Intercompany accounts and transactions have been eliminated.

The unaudited consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The consolidated financial statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025. The interim consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at March 31, 2026 and September 30, 2025:

---

| | | |
|:---|:---|:---|
|  | Jurisdiction of |  |
| Name of Entity | Incorporation | Relationship |
| Hypha Labs, Inc.(1) | Nevada | Parent |
| Hypha Products Inc. | Nevada | Subsidiary |
| Digipath Labs, Inc. | Nevada | Subsidiary |
| Digipath Labs CA, Inc (2) | California | Subsidiary |
| Digipath Labs S.A.S.(3) | Colombia | Subsidiary |
| VSSL Enterprises, Ltd.(4) | Canada | Subsidiary |

---

<sup>(1)</sup> Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by Hypha Labs, Inc., the parent company.

<sup>(2)</sup> Formed during the second fiscal quarter of 2021, but has no operations.

<sup>(3)</sup> Formed during the first fiscal quarter of 2019, but has no operations.

<sup>(4)</sup> Acquired on March 11, 2020, but has no operations.

The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company and subsidiaries will be collectively referred to herein as the "Company", "Hypha" or "FUNI". The Company's headquarters are located in Las Vegas, Nevada.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the three and six months ended March 31, 2026 and 2025, potential dilutive securities of 105,058,166 and 104,490,131 shares issuable upon conversion of convertible notes payable, respectively, and 13,920,000 and 8,120,000 shares issuable upon exercise of options, 17,387,050 and 15,387,050 shares issuable upon exercise of warrants, and 13,579,710 shares issuable upon conversion of Series A Preferred and Series B Preferred shares, had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Segment Reporting

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company at the consolidated level using information about its operating expenses and loss from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment.

Fair Value of Financial Instruments

The Company adheres to Accounting Standards Codification ("ASC") 820, *Fair Value Measurements and Disclosures* ("ASC 820"). ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

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| |
|:---|
| Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |

---

The carrying value of cash, accounts receivable, accounts payables and accrued expenses, notes payable and convertible notes payable are estimated by management to approximate fair value primarily due to the short term nature of the instruments. The Company has no assets or liabilities that are required to be remeasured at fair value at each reporting period.

Deferred Offering Costs

The Company capitalizes qualified legal, accounting and other direct costs related to its efforts to raise capital through the sale of its Series D Preferred shares under a qualified offering. Deferred offering costs will be deferred and amortized ratably upon sales under the offering, and upon completion, they will be reclassified to additional paid-in capital as a reduction of the offering proceeds. If the Company terminates the offering or there is a significant delay, all of the deferred offering costs will be immediately written off to operating expenses. During the three and six months ended March 31, 2026, the Company planned to terminate the offering and as a result recorded the remaining $253,556 as part of professional fees in the accompanying consolidated statement of operations. As of March 31, 2026 and September 30, 2025, $0 and $255,853 of deferred offering costs were capitalized related to the offering, which are included in deferred offering cost in the accompanying consolidated balance sheets.

Income Taxes

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

Uncertain Tax Positions

In accordance with ASC 740, "*Income Taxes*" ("ASC 740"), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities periodically audit the Company's income tax returns. These audits include questions regarding the Company's tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company's tax position relies on the judgment of management to estimate the exposures associated with the Company's various filing positions.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") <u>2023-09</u>, *Income Taxes* (*<u>Topic 740</u>*): *Improvements to Income Tax Disclosures*, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company has adopted this ASU as of October 1, 2025, which did not have a material effect on the consolidated financial statements.

In November 2024, the FASB issued <u>ASU 2024-03</u>, *Disaggregation of Income Statement Expenses*, and in January 2025, the FASB issued <u>ASU 2025-01</u>, *Clarifying the Effective Date* ("ASU 2025-01"). The amendments are intended to enhance disclosures regarding an entity's costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.

**Note 2 – Going Concern**

As shown in the accompanying unaudited consolidated financial statements, as of March 31, 2026, the Company had negative working capital of $1,338,365, accumulated recurring losses of $24,692,079, and $82,200 of cash on hand, which may not be sufficient to sustain operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company's ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

**Note 3 – Related Party Transactions**

During the three and six months ended March 31, 2026 and 2025 the Company incurred compensation expense of $30,000 and $60,000, respectively for services provided by the sole officer which are recorded in general and administrative expenses in the accompanying consolidated statement of operations. As of March 31, 2026, $140,000 was owed to the sole officer for services provided. As of March 31, 2026, the Company has accrued a total of $7,401 in reimbursable expenses owed to the sole officer.

During the six months ended March 31, 2026 and 2025, the Company accrued fees of $10,000 for services provided by its directors. As of March 31, 2026, the Company has accrued a total of $37,500 in fees for services provided by its directors.

During the six months ended March 31, 2026, the Company granted 2,000,000 shares of its common stock to the sole officer as compensation for services performed with a fair value of $48,800.

The transactions described above involve compensation and reimbursable expenses provided to members of management. These transactions may not have been conducted on an arms-length basis.

**Note 4 – Note Receivable**

On various dates between December 28, 2018 and June 13, 2019, we loaned Northwest Analytical Labs, Inc. a total of $95,000. The loans bear interest at an annual rate of 10%, are evidenced by secured demand notes, and are secured by a lien on the borrower's assets. An allowance for doubtful accounts for the full value of the notes was recorded prior to October 1, 2024, due to the uncertainty of collectability.

On December 8, 2022 (the "Transaction Date"), the Company entered into an Asset Purchase Agreement with Invictus Wealth Group ("Invictus"), whereby the Company agreed to sell certain collateralized equipment to Invictus for a total purchase price of $900,000. The purchase price consisted of an upfront payment of $275,000, and a note receivable (the "Invictus Note") in the amount of $625,000. The Invictus Note originally had a maturity date of December 31, 2023, accrued interest at a rate of 10% per annum, and provided for principal payments of $100,000 each due on June 30, 2023 and September 30, 2023, with the final payment of $425,000 due on December 31, 2023. As of June 30, 2023, the Company received the full down payment of $275,000. In April 2023, the Invictus Note was amended and restated to extend the maturity date to March 31, 2024, with principal payments of $100,000 each due on September 30, 2023 and December 31, 2023, with the final payment of $425,000 due on March 31, 2024. Subsequent to December 31, 2023, the Company amended the Invictus Note for a second time to extend the maturity date to December 31, 2025, with principal payments of $50,000 each due on June 30, 2024, September 30, 2024 and December 31, 2024, $100,000 due on March 31, 2025 and June 30, 2025, $125,000 due on September 30, 2025, with the final payment of $216,780 due on December 31, 2025. As of the date of this Quarterly Report on Form 10-Q, the Company has received the upfront payment of $275,000 and $124,000 of payments from Invictus under the Invictus Note. In the event the Company receives no further payments from Invictus, the Company may seek to repossess the equipment as allowed under the agreement.

The Company has recorded a full allowance against the Invictus Note.

**Note 5 – Fixed Assets**

Fixed assets consist of the following at March 31, 2026 and September 30, 2025, respectively:

Schedule of Fixed Assets

---

| | | |
|:---|:---|:---|
|  | As of | As of |
|  | March 31,<br>2026 | September 30,<br>2025 |
| Lab equipment | $74371 | $74371 |
| Less: accumulated depreciation | (17605) | (11864) |
| &nbsp;&nbsp;&nbsp;Total | $56766 | $62507 |

---

For the three months ended March 31, 2026 and 2025, the Company recorded depreciation expense of $3,719 and $1,835, respectively. For the six months ended March 31, 2026 and 2025, the Company recorded depreciation expense of $5,742 and $3,247, respectively.

**Note 6 –Notes Payable**

Notes payable consists of the following at March 31, 2026 and September 30, 2025, respectively:

Schedule of Notes Payable

---

| | | |
|:---|:---|:---|
|  | March 31, <br> 2026 | September 30, <br> 2025 |
| On October 15, 2024, the Company entered into a secured credit facility with a third party (the "2024 Secured Credit Facility"). Under the facility, the Company is able to borrow up to $200,000 which will incur interest at a rate of 12%, and is payable upon the earlier of February 28, 2025, or the date which the Company receives the escrow amount from the sale of the assets of Digipath Labs. On February 10, 2025, the facility holder agreed to extend the maturity date of the facility to July 31, 2025 in exchange for a deferred payment of $400. On August 18, 2025, the facility holder agreed to extend the maturity date of the facility to July 31, 2027 in exchange for a deferred payment of $2,607. During the six months ended March 31, 2026, the Company borrowed an additional $33,500 against the facility. | $123100 | $89600 |
| On January 25, 2025, the Company entered into a 12% secured credit facility (the "2025 Secured Credit Facility") for up to $200,000 payable on the earlier of December 31, 2025 or the date the Company receives sufficient funds from the Invictus Note described in Note 4 above. During the year ended September 30, 2025, the lender paid for certain services and equipment on behalf of the Company for an aggregate of $116,556. In addition, the lender advanced $23,000 of cash directly to the Company. On February 5, 2026, the note holder agreed to further extend the maturity date of the note to December 31, 2026. | 139556 | 139556 |
| On September 15, 2025, the Company entered into a promissory note with a principal balance of $113,850 which has a maturity date of July 15, 2026. The note carries an original issue discount of $14,850 and the lender retained $14,360 for legal and other fees for net proceeds to the Company of $84,640. In addition, the note carries an upfront interest charge of 12%, or $11,385, which was added to the principal balance upon closing. The aggregate discount of $40,595 is being amortized over the life of the loan. The note is to be repaid with an initial payment on March 15, 2026 of $62,617 and equal monthly payments thereafter of $15,654 through July 15, 2026. In the event of default, the note can be converted into shares of the Company's common stock at a rate of 65% of the lowest trading price of the preceding 10 trading days. On March 15, 2026, the Company failed to make the required payment and the loan went into default. On March 23, 2026 the Company came to an agreement with the lender whereby it agreed to make a payment of $65,000 against the balance, with equal bi-weekly payments of $10,625 to be made thereafter until the balance is paid in full. As a result, the Company recorded a default penalty to interest expense of $44,765. In addition during the default period, the lender converted $20,000 of principal into 1,374,152 shares of common stock. | 85000 | 125235 |
| On December 5, 2025, the Company entered into a promissory note with a principal balance of $94,300 which has a maturity date of September 30, 2026. The note carries an original issue discount of $12,300 and the lender retained $13,000 for legal and other fees for net proceeds to the Company of $69,000. In addition, the note carries an upfront interest charge of 12%, or $11,316, which was added to the principal balance upon closing. The aggregate discount of $36,616 is being amortized over the life of the loan. The note is to be repaid with an initial payment on May 30, 2026 of $52,808 and equal monthly payments thereafter of $13,202 through September 30, 2026. In the event of default, the note can be converted into shares of the Company's common stock at a rate of 65% of the lowest trading price of the preceding 10 trading days. | 105616 | - |
| Total notes payable | 453272 | 354391 |
| Less: discounts on notes payable | (36659) | (38713) |
| Notes payable, net of discounts | 416613 | 315678 |
| Less: current maturities | (293513) | (226078) |
| Notes payable, long term | $123100 | $89600 |

---

The Company recorded interest expense pursuant to the stated interest rates on the convertible notes in the amount of $5,383 and $1,266 for the three months ended March 31, 2026 and 2025, respectively. The Company recorded interest expense pursuant to the stated interest rates on the notes payable in the amount of $10,907 and $1,773 for the six months ended March 31, 2026 and 2025, respectively.

During the three and six months ended March 31, 2026 the Company recorded debt amortization expense attributed to the debt discount on its notes payable in the amounts of $23,119 and $38,670, respectively. Unamortized discount as of March 31, 2026 is $36,659.

As of March 31, 2026 and as of the date of this filing, none of the above notes are in default. The secured notes are secured by the assets of the Company.

**Note 7 - Convertible Notes Payable**

Convertible notes payable consist of the following at March 31, 2026 and September 30, 2025, respectively:

Schedule of Convertible Notes Payable

---

| | | |
|:---|:---|:---|
|  | March 31,<br>2026 | September 30,<br>2025 |
| (1) On February 11, 2020, the Company completed the sale to an accredited investor of a 9% Secured Convertible Promissory Note in the principal amount of $50,000. The Note matures on August 11, 2022, bears interest at a rate of 9% per annum, and was convertible into shares of the Company's common stock at a conversion price of $0.15 per share. On December 28, 2020, the conversion price was amended to $0.03 per share in exchange for an additional $10,000 of proceeds and the promissory note was increased to $60,000. The Company's obligations under the Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs, Inc., pursuant to a Security Agreement between the Company, Digipath Labs, Inc. and the investor. On December 29, 2020, the note holder converted $10,000 of principal into 333,334 shares of common stock at a conversion price of $0.03 per share. On August 8, 2022, the note holder agreed to extend the maturity date of the note to February 11, 2024. In exchange for the extension, the Company agreed to issue 650,000 common shares, which were recorded as debt discount, with a relative fair value of $6,989. On February 10, 2025, the note holder agreed to further extend the maturity date of the note to July 31, 2025 in exchange for a deferred payment of $1,000. On August 18, 2025, the note holder agreed to extend the maturity date of the note to July 31, 2027 in exchange for a deferred payment of $1,500 allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. | $51500 | $51500 |
| (2) On September 23, 2019, the Company received proceeds of $200,000 on a senior secured convertible note that carries an 8% interest rate, which matured on August 10, 2022, as amended. The principal and interest were convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.11 per share. On September 30, 2020, the maturity date was extended to August 10, 2022 and the conversion price was amended to $0.03 per share. The Company's obligations under this Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs. On February 22, 2021, the noteholder converted $90,000 of principal into 3,000,000 shares of common stock at a conversion price of $0.03 per share. On September 30, 2021, the note was amended to add the outstanding short term notes and accrued interest into the principal balance, making the outstanding balance $355,469, as amended. As a result of the modification, the Company recorded an additional debt discount of $98,188, as a result of the beneficial conversion feature of the additional principal. On October 1, 2022, the Company further extended the maturity date to February 11, 2024. In connection with the modification, the Company issued warrants to purchase 4,621,105 shares of common stock, with a fair value of $32,166, which was recorded as a debt discount. On January 22, 2024 the Company further amended the note to extend the maturity date to February 11, 2025 and reduced the conversion price to $0.01. As a result of the modification of the conversion price, the Company recorded a loss on debt extinguishment of $481,955. On February 10, 2025, the note holder agreed to further extend the maturity date of the note to July 31, 2025 in exchange for a deferred payment of $4,000. On August 18, 2025, the note holder agreed to extend the maturity date of the note to July 31, 2027 in exchange for a deferred payment of $9,299 allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. During the six months ended March 31, 2026, the lender converted $70,000 of principal into 7,000,000 shares of common stock pursuant to the conversion terms. | 296134 | 366134 |
| (3) On November 8, 2018, the Company received proceeds of $350,000 on a senior secured convertible note that carries an 8% interest rate, which matured on August 10, 2022, as amended. The principal and interest were convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.14 per share. On September 30, 2020, the maturity date was extended to August 10, 2022 and the conversion price was amended to $0.03 per share. The Company's obligations under this Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs. On October 1, 2022, the Company further extended the maturity date to February 11, 2024. In connection with the modification, the Company issued warrants to purchase 4,550,000 shares of common stock, with a fair value of $31,671 which was recorded as a debt discount. On January 29, 2024, the holder converted $40,000 of this note into common shares. On January 22, 2024, the Company further amended the note to extend the maturity date to February 11, 2025 and reduced the conversion price to $0.01. As a result of the modification of the conversion price, the Company recorded a loss on debt extinguishment of $474,539. On February 10, 2025, the note holder agreed to further extend the maturity date of the note to July 31, 2025 in exchange for a deferred payment of $7,000. On August 18, 2025, the note holder agreed to extend the maturity date of the note to July 31, 2027 in exchange for a deferred payment of $10,664 allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. | 319300 | 319300 |
| 4) On October 1, 2022, the Company entered into a senior secured convertible note that carries an 8% interest rate, which matured on February 11, 2024. The Note documented the advances made during the year ended September 30, 2022 in the amount of $362,765. The principal and interest on the Note are convertible into common shares at a conversion price of $0.01. In connection with the note, the Company issued warrants to purchase 4,715,945 shares of common stock, with a fair value of $30,102, which was recorded as a debt discount. On January 22, 2024, the note holder agreed to extend the maturity date of the Note to February 11, 2025. On February 10, 2025, the note holder agreed to further extend the maturity date of the note to July 31, 2025 in exchange for a deferred payment of $7,255. On August 18, 2025, the note holder agreed to extend the maturity date of the note to July 31, 2027 in exchange for a deferred payment of $10,883 allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. | 373648 | 373648 |
| (5) On June 5, 2025, the Company received proceeds of $133,000 on a senior secured convertible note that carries an 8% interest rate, which matures on May 31, 2028. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.03 per share. | 133000 | 133000 |
| (6) On July 31, 2025, the Company received proceeds of $60,000 on a senior secured convertible note that carries an 8% interest rate and an original issue discount of $3,000, which matures on March 31, 2028. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.03 per share. | 63000 | 63000 |
| (7) On March 24, 2026, the Company received proceeds of $150,000 on a senior secured convertible note that carries an 8% interest rate, which matures on March 31, 2031. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.02 per share. | 150000 | - |
| Total convertible notes payable | 1386582 | 1306582 |
| Less: unamortized debt discounts | (2000) | (2750) |
|  | 1384582 | 1303832 |
| Less: current maturities | - | - |
| Convertible notes payable, long term | $1384582 | $1303832 |

---

The Company recorded interest expense pursuant to the stated interest rates on the convertible notes in the amount of $25,770 and $21,393 for the three months ended March 31, 2026 and 2025, respectively. The Company recorded interest expense pursuant to the stated interest rates on the convertible notes in the amount of $52,246 and $43,261 for the six months ended March 31, 2026 and 2025, respectively.

During the three and six months ended the Company recorded debt amortization expense attributed to the debt discount on its notes payable and convertible notes payable in the amounts of $23,494 and $39,420, respectively. Unamortized discount as of March 31, 2025 is $38,659.

As of March 31, 2026 and as of the date of this filing, none of the above notes are in default. The secured convertible notes are secured by the assets of the Company.

The Company recognized interest expense for the six months ended March 31, 2026 and 2025, respectively, as follows:

---

| | | |
|:---|:---|:---|
|  | March 31,<br>2026 | March 31,<br>2025 |
| Interest on notes payable | $10908 | $1773 |
| Amortization of debt discounts | 39420 |  |
| Interest on convertible notes | 52246 | 43261 |
| Default penalties added to principal | 44765 | - |
| &nbsp;&nbsp;&nbsp;Total interest expense | $147339 | $45034 |

---

The following summarizes the Company's maturities of all debt instruments described above as of March 31, 2026:

Schedule of Maturities of Debt

---

| | |
|:---|:---|
| Fiscal Year Ending | Future |
| September 30, | Maturities |
| 2026 | 190616 |
| 2027 | 1303236 |
| 2028 | 196000 |
| 2029 |  |
| 2030 |  |
| Thereafter | 150000 |
| Total | 1839852 |

---

**Note 8 – Stockholders' Equity**

Preferred Stock

The Company is authorized to issue 70,000,000 shares of preferred stock with a par value of $0.001 per share, of which 6,000,000 have been designated as Series A Convertible Preferred Stock ("Series A Preferred"), 1,500,000 have been designated as Series B Convertible Preferred Stock ("Series B Preferred"), 1,000 shares have been designated as Series C Preferred Stock ("Series C Preferred"), and 60,000,000 shares have been designated as Series D Preferred Stock ("Series D Preferred"), with the remaining 2,499,000 shares available for designation from time to time by the Board as set forth below. As of March 31, 2026, there were 1,047,942 shares of Series A Preferred issued and outstanding, 333,600 shares of Series B Preferred issued and outstanding, 1,000 shares of Series C Preferred issued and outstanding, and 700,313 shares of Series D Preferred issued and outstanding. Our board of directors is authorized to determine any number of series into which the undesignated shares of preferred stock may be divided and to determine the rights, preferences, privileges and restrictions granted to any series of the preferred stock. Each share of Series A Preferred is currently convertible into five shares of common stock, each share of Series B Preferred is currently convertible into twenty-five shares of common stock and each share of Series D Preferred is currently convertible into one share of common stock. The Series C Preferred is not convertible into common stock.

*Series A Preferred*

The conversion price is adjustable in the event of stock splits and other adjustments in the Company's capitalization, and in the event of certain negative actions undertaken by the Company. At the current conversion price, the 1,047,942 shares of Series A Preferred outstanding at March 31, 2026 are convertible into 5,239,710 shares of the common stock of the Company. No holder is permitted to convert its shares of Series A Preferred if such conversion would cause the holder to beneficially own more than 4.99% of the issued and outstanding common stock of the Company immediately after such conversion, unless waived by such holder by providing at least sixty-five days' notice.

Additional terms of the Series A Preferred include the following:

● The
 shares of Series A Preferred are entitled to dividends when, as and if declared by the Board as to the shares of the common stock
 of the Company into which such Series A Preferred may then be converted, subject to the 4.99 % beneficial ownership limitation described
 above.

● Upon
 the liquidation or dissolution of the Company, or any merger or sale of all or substantially all of the assets, the shares of Series
 A Preferred are entitled to receive, prior to any distribution to the holders of common stock, 100 % of the purchase price per share
 of Series A Preferred plus all accrued but unpaid dividends.

● The
 Series A Preferred plus all declared but unpaid dividends thereon automatically will be converted into common stock, at the then
 applicable conversion rate, upon the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred.

● Each
 share of Series A Preferred will carry a number of votes equal to the number of shares of common stock into which such Series A Preferred
 may then be converted, subject to the 4.99 % beneficial ownership limitation described above. The Series A Preferred generally will
 vote together with the common stock and not as a separate class, except as provided below.

● Consent
 of the holders of the outstanding Series A Preferred , voting separately as a class, is required in order for the Company to: (i)
 amend or change the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred;
 (ii) authorize, create or issue shares of any class of stock having rights, preferences, privileges or powers superior to the Series
 A Preferred; (iii) reclassify any outstanding shares into shares having rights, preferences, privileges or powers superior to the
 Series A Preferred; or (iv) amend the Company's Articles of Incorporation or Bylaws in a manner that adversely affects the
 rights of the Series A Preferred.

● Pursuant
 to various Securities Purchase Agreements, holders of Series A Preferred are entitled to unlimited "piggyback" registration
 rights on registrations by the Company, subject to pro rata cutback at any underwriter's discretion.

*Series C Preferred*

The Series C Preferred stock was designated on July 20, 2022. The principal feature of the Series C Preferred is that it provides the holder thereof, so long as he or she is an executive officer of the Company, with the ability to vote with the holders of the Company's common stock on all matters presented to the holders of common stock, whether at a special or annual meeting, by written action in lieu of a meeting or otherwise, on the basis of 200,000 votes for each share of Series C Preferred. The shares of Series C Preferred are not convertible into common stock, are not entitled to dividends, are not subject to redemption, and have a stated value of $0.10 per share payable on any liquidation of the Company in preference to any payment payable to the holders of common stock.

Additional terms of the Series C Preferred include the following:

● The
 shares of Series C Preferred are not entitled to dividends.

● Upon
 the liquidation or dissolution of the Company, the shares of Series C Preferred are entitled to receive, prior to any distribution
 to the holders of common stock, 100 % of the stated value per share of Series C Preferred.

● The
 shares of Series C Preferred have no conversion rights.

*Series D Preferred*

The Series D Preferred ranks, as to dividend rights and rights upon our liquidation, dissolution, or winding up, junior to the Series A Preferred and Series B Preferred and senior to the Series C Preferred and all classes or series of common stock. The terms of the Series D Preferred do not limit our ability to (i) incur indebtedness or (ii) issue additional equity securities that are equal or senior in rank to the shares of Series D Preferred as to distribution rights and rights upon our liquidation, dissolution or winding up.

The shares of Series D Preferred are not entitled to dividends, provided that if dividends are paid on the shares of common stock, the Series D Preferred will be entitled to dividends based on the number shares of common stock into which the Series D Preferred may then be converted.

The liquidation preference for each share of Series D Preferred is $0.20. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series D Preferred will be entitled to receive out of the assets of the Company available to its stockholders before any payment is made to the holders of shares of common stock or other classes of shares of the Company ranking junior to the Series D Preferred, the liquidation preference with respect to their shares plus an amount equal to any accrued but unpaid dividends (if declared) to, but not including, the date of payment with respect to such shares. After the payment to the holders of the Series D Preferred of the amount payable to them as above provided, they shall not be entitled to share in any further distribution of the assets or property of the Company.

The shares of Series D Preferred have no maturity date, and the Company is not required to redeem shares of Series D Preferred at any time. Accordingly, the shares of Series D Preferred will remain outstanding indefinitely, unless otherwise converted at the option of the holder thereof or pursuant to a mandatory conversion described below.

At any time after issuance, each share of Series D Preferred is convertible into one share of common stock at the option of the holder. At any time after issuance upon the occurrence of any of the following events, the Company shall have a right to direct the mandatory conversion of the Series D Preferred: (a) a change in control, or (b) if the closing price of the common stock closes at or above $0.40 per share for 10 consecutive trading days.

Holders of Series D Preferred generally have no voting rights. However, certain material and adverse changes to the terms of the Series D Preferred cannot be made without the affirmative vote of holders of at least a majority of the outstanding shares of Series D Preferred, voting as a separate class.

Regulation A Offering

On June 30, 2025, the Securities and Exchange Commission (the "SEC") declared effective the Company's offering statement on Form 1-A (the "Offering Statement") filed pursuant to Tier 2 of Regulation A under the Securities Act of 1933, as amended (the "Securities Act"). On July 1, 2025, the Company commenced a public offering on a "best-efforts" basis of up to a maximum of 50,000,000 units (the "Units"), at a public offering price of $0.20 per Unit. Each Unit consists of (i) one share of our Series D Preferred stock, and (ii) one Common Stock Purchase Warrant (each, a "Warrant") to purchase one share of our common stock, par value $0.001 per share (the "Common Stock"), for a maximum aggregate offering amount of $10,000,000 (the "Maximum Offering Amount"), plus up to an additional 10,000,000 Bonus Shares (as described in the Offering Statement). The minimum initial investment amount per investor is $1,000 for 5,000 Units. Additionally, investors are required to pay a transaction fee to the Company at the time of subscription to help offset transaction costs equal to 2.0% of the subscription price per Unit, up to a maximum of $100.00 (the "Transaction Fee"), representing a total minimum investment of $1,020.

The Units have no stand-alone rights and are not certificated or issued as stand-alone securities. The Warrants became exercisable on the 180th day following the qualification date of the offering and will remain exercisable for a period of 18 months thereafter. Each Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $0.30 per share. The shares of Series D Preferred stock and the Warrants comprising each Unit are immediately separable upon issuance and will be issued separately, but must be purchased together as a Unit in the offering.

On November 6, 2025, the Company filed a supplement to the Offering Statement pursuant to Rule 253(g)(2) under the Securities Act to reflect an increase in the public offering price per Unit from $0.20 to $0.21.

During the six months ended March 31, 2026, the Company sold 310,063 shares of Series D Preferred shares and 310,063 warrants to purchase shares of common stock for net proceeds of $57,485 under the Offering Statement. In addition, the Company amortized $2,297 of deferred offering costs against the proceeds during the six months ended March 31, 2026.

Common Stock

The common stock has a par value of $0.001, and 880,000,000 shares were authorized as of March 31, 2026, of which 163,895,977 shares were issued and outstanding.

During the six months ended March 31, 2026, the Company issued 2,000,000 shares of common stock to the sole officer. The shares were valued at the closing price on the date of issuance for an aggregate value of $48,800.

During the six months ended March 31, 2026, the Company issued 6,400,000 shares of common stock to outside consultants. The shares were valued at the closing price on the date of issuance for an aggregate value of $152,600.

During the six months ended March 31, 2026, the Company issued 8,374,152 shares common stock upon the conversion of $90,000 of principal on notes payable.

**Note 9 – Mezzanine Equity**

*Series B Preferred*

The shares of Series B Preferred were designated on December 29, 2021. Each share of Series B Preferred has a stated value of $1.00 and is currently convertible into common stock at a conversion price equal to $0.04. The conversion price of the Series B Preferred is subject to equitable adjustment in the event of a stock split, stock dividend or similar event with respect to the common stock, and in the event of the issuance of common stock by the Company below the conversion price, subject to customary exceptions. At the current conversion price, the 333,600 shares of Series B Preferred outstanding at December 31, 2025 are convertible into 8,340,000 shares of the common stock of the Company. No holder is permitted to convert its shares of Series B Preferred if such conversion would cause the holder to beneficially own more than 4.99% of the issued and outstanding common stock of the Company immediately after such conversion, unless waived by such holder by providing at least sixty-five days' notice.

Additional terms of the Series B Preferred include the following:

● The
 shares of Series B Preferred are not entitled to dividends, provided that if dividends are paid on the shares of common stock of
 the Company, the Series B Preferred will be entitled to dividends based on the number of shares of common stock into which the Series
 B Preferred may then be converted.

● Upon
 the liquidation or dissolution of the Company, or any merger or sale of all or substantially all of the assets, or upon a change
 in control whereby a stockholder gains control of 50% or more of the outstanding shares of common stock, the shares of Series B Preferred
 are entitled to receive, prior to any distribution to the holders of common stock and Series A Preferred, 100% of the purchase price
 per share of Series B Preferred plus all accrued but unpaid dividends.

● Each
 share of Series B Preferred carries a number of votes equal to the number of shares of common stock into which such shares of Series
 B Preferred may then be converted.

Due to the change in control provision of the Series B Preferred, the Series B Preferred is classified as temporary equity on the unaudited consolidated balance sheets.

**Note 10 – Common Stock Options**

Stock Incentive Plan

On June 21, 2016, we amended and restated our 2012 Stock Incentive Plan (the "2012 Plan"), which was originally adopted on March 5, 2012, and terminated on March 5, 2022. As amended, the 2012 Plan provided for the issuance of up to 11,500,000 shares of common stock pursuant to the grant of options or other awards, including stock grants, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the 2012 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant.

Common Stock Option Issuances

There were no issuances of common stock options during the six months ended March 31, 2026.

Amortization of Stock-Based Compensation

A total of $16,731 and $0 of stock-based compensation expense was recognized during the six months ended March 31, 2026 and 2025, respectively, as a result of the vesting of common stock options issued in prior periods. As of March 31, 2026 no additional amounts of unamortized expense remains to be amortized over the vesting period.

The following is a summary of information about the stock options outstanding at March 31, 2026.

Summary of Common Stock Options Outstanding

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Shares Underlying Options Outstanding | Shares Underlying Options Outstanding | Shares Underlying Options Outstanding | Shares Underlying Options Outstanding | Shares Underlying Options Exercisable | Shares Underlying Options Exercisable |
|  |  | Weighted |  |  |  |
|  | Shares | Average | Weighted | Shares | Weighted |
| Range of | Underlying | Remaining | Average | Underlying | Average |
| Exercise | Options | Contractual | Exercise | Options | Exercise |
| Prices | Outstanding | Life | Price | Exercisable | Price |
| $.0056-0.13 | 13920000 | 1.58 years | $0.062 | 13920000 | $0.062 |

---

The following is a summary of activity of outstanding common stock options:

---

| | | |
|:---|:---|:---|
|  |<br>Number<br>of Shares | Weighted<br>Average<br>Exercise<br>Price |
| Balance, September 30, 2025 | 13920000 | $0.062 |
| &nbsp;&nbsp;&nbsp;Options issued |  |  |
| &nbsp;&nbsp;&nbsp;Options forfeited | - | - |
| Balance, March 31, 2026 | 13920000 | $0.062 |
| Exercisable, March 31, 2026 | 13920000 | $0.062 |

---

As of March 31, 2026, these options in the aggregate had $46,890 of intrinsic value for the outstanding and exercisable options, based on the per share market price of $0.027 of the Company's common stock as of such date was greater than the weighted-average exercise price of some of these options.

**Note 11 – Common Stock Warrants**

Warrants to purchase a total of 17,974,312 shares of common stock were outstanding as of March 31, 2026.

The following is a summary of information about our warrants to purchase common stock outstanding at March 31, 2026 (including those issued to both investors and service providers).

Summary of Common Stock Warrants Outstanding

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | Shares Underlying | Shares Underlying |
| Shares Underlying Warrants Outstanding | Shares Underlying Warrants Outstanding | Shares Underlying Warrants Outstanding | Shares Underlying Warrants Outstanding | Warrants Exercisable | Warrants Exercisable |
|  |  | Weighted |  |  |  |
|  | Shares | Average | Weighted | Shares | Weighted |
| Range of | Underlying | Remaining | Average | Underlying | Average |
| Exercise | Warrants | Contractual | Exercise | Warrants | Exercise |
| Prices | Outstanding | Life | Price | Exercisable | Price |
| $0.0074 -0.30 | 18087363 | 6.20 years | $0.028 | 17387050 | $0.017 |

---

The following is a summary of activity of outstanding common stock warrants:

Schedule of Outstanding Common Stock Warrants Activity

---

| | | |
|:---|:---|:---|
|  |<br>Number<br>of Shares | Weighted<br>Average<br>Exercise<br>Price |
| Balance, September 30, 2025 | 17777300 | $0.023 |
| &nbsp;&nbsp;&nbsp;Warrants granted | 310063 | 0.30 |
| &nbsp;&nbsp;&nbsp;Warrants expired | - | - |
| Balance, March 31, 2026 | 18087363 | $0.028 |
| Exercisable, March 31, 2026 | 17387050 | $0.017 |

---

As of March 31, 2026, these warrants in the aggregate had $278,243 of intrinsic value as the per share market price of $0.027 of the Company's common stock as of such date was greater than the exercise price of certain warrants.

**Note 12 – Leases**

On May 6, 2024, the Company entered into a lease to lease its operating and office facility under a non-cancelable real property lease agreement that expires on May 31, 2026. The real property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company's leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The components of lease expense were as follows:

Schedule of Lease Expense

---

| | | |
|:---|:---|:---|
|  | For the<br>Six Months Ended<br>March 31,<br>2026 | For the<br>Six Months Ended<br>March 31,<br>2025 |
| Operating lease cost | $20236 | $20236 |
| Total net lease cost | $20236 | $20236 |

---

Supplemental balance sheet information related to leases was as follows:

Schedule of Operating Lease Supplemental Balance Sheets

---

| | | |
|:---|:---|:---|
|  | March 31,<br>2026 | September 30,<br>2025 |
| **Operating leases:** |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease assets | $6678 | $26180 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 6842 | 26838 |
| &nbsp;&nbsp;&nbsp;Noncurrent operating lease liabilities | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | $6842 | $26838 |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 0.17 years | .67 years |
| Weighted average discount rate: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 7.9% | 7.9% |

---

Supplemental cash flow and other information related to leases was as follows:

Schedule of Operating Lease Supplemental Cash Flow

---

| | | |
|:---|:---|:---|
|  | For the<br>Six Months Ended<br>March 31,<br>2026 | For the<br>Six Months Ended<br>March 31,<br>2025 |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows used for operating leases | $19996 | $17530 |
| &nbsp;&nbsp;&nbsp;Financing cash flows used for finance leases | $- | $- |
| Leased assets obtained in exchange for lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Total operating lease liabilities | $- | $- |
| &nbsp;&nbsp;&nbsp;Total finance lease liabilities | $- | $- |

---

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities on a fiscal year basis, including common area maintenance fees, under non-cancelable operating leases as of March 31, 2026:

Schedule of Future Minimum Operating Lease Payments

---

| | |
|:---|:---|
| Fiscal Year Ending | Minimum Lease |
| September 30, | Commitments |
| 2026 (6 months) | $6910 |
| 2027 |  |
| 2028 |  |
| 2029 |  |
| 2030 | - |
| Total future undiscounted lease payments | 6910 |
| Less interest | (68) |
| Present value of lease payments | 6842 |
| Less current portion | 6842 |
| Long-term operating lease liabilities | $- |

---

**Note 13 – Commitments and Contingencies**

Legal Contingencies

There are no material pending legal proceedings to which we are a party or to which any of our property is subject, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

---

| | |
|:---|:---|
| **ITEM 2.** | **MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.** |

---

*The information contained in this Quarterly Report on Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended September 30, 2025 and presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our unaudited financial statements and the notes to the financial statements included elsewhere in this Quarterly Report on Form 10-Q.*

*The following discussion contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Annual Report on Form 10-K for the year ended September 30, 2025 in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this Quarterly Report on Form 10-Q. The following should also be read in conjunction with the unaudited financial statements and notes thereto that appear elsewhere in this Quarterly Report on Form 10-Q.*

**Overview**

Hypha Labs, Inc. was incorporated in Nevada on October 5, 2010. Hypha Labs, Inc. and its subsidiaries ("Hypha Labs," the "Company," "we," "our" or "us") was a service-oriented independent testing laboratory, data analytics and media firm focused on the developing cannabis and hemp markets, and supported the cannabis industry's best practices for reliable testing. Our mission was to provide pharmaceutical-grade analysis and testing to the cannabis industry, under ISO-17025:2017 guidelines, to ensure consumers and patients knew exactly what was in the cannabis they ingest and to help maximize the quality of our clients' products through research, development, and standardization. Hypha Labs had been operating a cannabis-testing lab in Nevada since 2015.

On February 20, 2024, we completed the sale of the net assets of our wholly owned subsidiary Digipath Labs, Inc. ("Digipath Labs"). As of that date, we were no longer in the business as a service oriented independent testing laboratory, data analytics and media firm focused on the developing cannabis and hemp markets, which supported the cannabis industry's best practices for reliable testing, cannabis education and training. Following closing of the asset sale, the Company changed its name from Digipath, Inc. to Hypha Labs, Inc.

Hypha Products Inc., a wholly owned subsidiary of the Company, was formed on April 18, 2024 to engage in the research, development and commercialization of a bioreactor, the Hypha Micropearl bioreactor, a home appliance designed to accelerate the production of nutritionally beneficial mushrooms for human consumption. The Company's easy-to-use device, together with its replacement cartridges, safely and effectively produces enriched mycelium of functional mushrooms, or Micropearls, in just eight days. These Micropearls contain active mushroom ingredients that offer a way to harness the medicinal properties of fungi in a concentrated, easy-to-handle, tasteless and odorless form. These Micropearls can be incorporated into various food and beverages without altering the flavor.

Our Hypha Micropearl bioreactor will be sold with replaceable cartridges which are delivered pre-sterilized to the home and ready to be inserted into the device. These cartridges are filled with powerful nutrient formulations which allow for the production of the Micropearls. The QR codes on the cartridges are scanned to the Hypha Labs app and inserted into the device and the Micropearls are produced and fully formed in eight days. After harvesting the Micropearls with a strainer, they are ready to be incorporated into a variety of foods. The cartridges help to minimize the risk of mold or yeast contamination and help improve the success of the at home mushroom growth. We believe that our innovative bioreactor technology will disrupt traditional methods of mushroom production and bring lab-quality nutrient ingredients into the home with convenience and efficiency

We intend to continue the design, development and testing of the Hypha Micropearl bioreactor over the next nine months. Initially, we will produce a limited number of bioreactors at our headquarters for testing purposes, both with mycologists and experts in the functional mushroom industry. Upon completion of the design and successful testing of the Hypha Micropearl bioreactor, we will seek to enter into a manufacturing arrangement outside the United States to manufacture the Hypha Micropearl bioreactor for commercial sale. Our goal is to be in the position to market the Hypha Micropearl bioreactor by the latter part of calendar year 2026, although there can be no assurance we will achieve our goal in this time period, or at all.

**Results of Operations for the Three Months Ended March 31, 2026 and 2025:**

The following table summarizes selected items from the statement of operations for the three months ended March 31, 2026 and 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | |
|  | 2026 | 2025 | Increase /<br>(Decrease) |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | $114389 | $95467 | $18922 |
| &nbsp;&nbsp;&nbsp;Professional fees | 306004 | 573695 | (267691) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses: | 420393 | 669162 | (248769) |
| Operating loss | (420393) | (669162) | 248769 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | (100721) | 27340 | (128061) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(521114) | $(641822) | $120708 |

---

**General and Administrative Expenses**

General and administrative expenses for the three months ended March 31, 2026 were $114,389, compared to $95,467 during the three months ended March 31, 2025, an increase of $18,922, or 20%. General and administrative expenses increased primarily due to increased marketing expenses.

**Professional Fees**

Professional fees for the three months ended March 31, 2026 were $306,004, compared to $573,695 during the three months ended March 31, 2025, a decrease of $267,691, or 47%. Professional fees included non-cash, stock-based compensation of $0 and $389,063 during the three months ended March 31, 2026 and 2025, respectively. Professional fees decreased primarily due to the decrease in stock based compensation offset by increased corporate consulting services and legal fees during the current period as we increased our focus on developing our new business in addition to expensing the remaining portion of the deferred offering costs.

**Other Income (Expense)**

Other expense, on a net basis, for the three months ended March 31, 2026 was $100,721, compared to other income, on a net basis, of $27,340 during the three months ended March 31, 2025, a net increase in other expense of $128,061. Other expense consisted of interest expense of $100,721 for the three months ended March 31, 2026 compared to interest expense of $22,660 offset by the gain on the recovery of previously written off receivables for the three months ended March 31, 2025. The increase in interest expense in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was a result of increased note payable and convertible note payable balances.

**Results of Operations for the Six Months Ended March 31, 2026 and 2025:**

The following table summarizes selected items from the statement of operations for the Six months ended March 31, 2026 and 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | Six Months Ended March 31, | Six Months Ended March 31, | |
|  | 2026 | 2025 | Increase /<br>(Decrease) |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | $300265 | $1150578 | $(850313) |
| &nbsp;&nbsp;&nbsp;Professional fees | 595148 | 823848 | (228700) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses: | 895413 | 1974426 | (1079013) |
| Operating loss | (895413) | (1974426) | 1079013 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expense, net | (147339) | (7037) | (140302) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(1042752) | $(1981463) | $938711 |

---

**General and Administrative Expenses**

General and administrative expenses for the six months ended March 31, 2026 were $300,265, compared to $1,150,578 during the six months ended March 31, 2025, a decrease of $850,313, or 74%. General and administrative expenses included non-cash, stock-based compensation of $48,800 and $968,356 during the six months ended March 31, 2026 and 2025, respectively. General and administrative expenses decreased primarily due to the issuance of the Series C Preferred shares to our sole officer with a value in excess of the purchase price of $968,356 during the prior period which did not occur in the current period.

**Professional Fees**

Professional fees for the six months ended March 31, 2026 were $595,148, compared to $823,848 during the six months ended March 31, 2025, a decrease of $228,700, or 28%. Professional fees included non-cash, stock-based compensation of $169,331 and $456,063 during the six months ended March 31, 2026 and 2025, respectively. Professional fees decreased primarily due to the decrease in stock based compensation offset by increase corporate consulting services and legal fees during the current period as we increased our focus on developing our new business in addition to expensing the remaining portion of the deferred offering costs.

**Other Income (Expense)**

Other expense, on a net basis, for the six months ended March 31, 2026 was $147,339, compared to other expense, on a net basis of $7,037 during the six months ended March 31, 2025, a net increase in other expense of $140,302. Other expense consisted of interest expense of $147,339 for the six months ended March 31, 2026 compared to interest expense of $45,034 and loss on the settlement of the escrow deposit of $20,003, offset by interest income of $8,000 and the recovery of previously written off receivables of $50,000 for the six months ended March 31, 2025. The increase in interest expense in the six months ended March 31, 2026 compared to the six months ended March 31, 2025 was a result of increased note payable and convertible note payable balances.

**Liquidity and Capital Resources**

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the six months ended March 31, 2026 and 2025:

---

| | | |
|:---|:---|:---|
|  | **2026** | **2025** |
| Operating Activities | $(200902) | $(41611) |
| Investing Activities |  | (1730) |
| Financing Activities | 244984 | (26732) |
| Net increase (decrease) in Cash | $44082 | $(70073) |

---

Net Cash Used in Operating Activities

During the six months ended March 31, 2026, net cash used in operating activities was $200,902, compared to net cash used in operating activities of $41,611 for the same period ended March 31, 2025. The increase in net cash used in operating activities was primarily attributable to our increase in net loss related to the development of our new business, after taking into account the non-cash expense related to the issuance of Series C Preferred shares to the sole officer in the six months ended March 31, 2025.

Net Cash Used in Investing Activities

During the six months ended March 31, 2026, net cash used in investing activities was $0, compared to $1,730 used in investing activities for the same period ended March 31, 2025. The cash used in investing activities for the prior period related to the purchase of fixed assets.

Net Cash Provided by (Used in) Financing Activities

During the six months ended March 31, 2026, net cash provided by financing activities was $244,984, compared to net cash used in financing activities of $26,732 for the same period ended March 31, 2025. Cash provided by financing activities for the six months ended March 31, 2026 related to proceeds from notes payable of $102,500, proceeds of $150,000 from convertible notes payable and net proceeds from the sale of Series D Preferred Shares of $57,484, offset by the repayment of $65,000 on notes payable. Cash provided by financing activities for the six months ended March 31, 2025 related to proceeds from notes payable of $65,600, proceeds from purchase of Series C Preferred Shares of $100, offset by the payment of $92,432 in deferred offering costs.

**Ability to Continue as a Going Concern**

As of March 31, 2026, our balance of cash on hand was $82,200, and we had negative working capital of $1,338,365 and an accumulated deficit of $24,692,079 resulting from recurring losses. These factors raise substantial doubt about the Company's ability to continue as a going concern. Until the agreement to sell the assets of the Company's lab testing business, management was actively pursuing new customers to increase revenues. In addition, the Company was seeking additional sources of capital to fund short term operations. The Company will seek to raise funds to complete the development and testing of its bioreactor over the next 6 to 12 months and to fund the initial launch of commercial sales of its bioreactor device. The Company intends to raise such funds through either the sale of equity or debt securities, including through a Regulation A offering. The Company is also currently evaluating future investments into potential acquisition targets. There can be no assurance that we will be successful in raising the necessary funds to achieve these objectives or that we will be able to continue our business without either a temporary interruption or a permanent cessation if such funds are not available. In addition, additional financing may result in substantial dilution to existing stockholders. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

**Off-Balance Sheet Arrangements**

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

**Critical Accounting Policies and Estimates**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments.

While our significant accounting policies are more fully described in notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we used in the preparation of our financial statements.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 *Stock Compensation* (ASC 718) and *Improvements to nonemployee share-based payment accounting* pursuant to ASC 2018-07 (ASC 2018-07). All transactions in which the consideration provided in exchange for the purchase of goods or services consists of the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty's performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

**ITEM 4. CONTROLS AND PROCEDURES.**

**Disclosure Controls and Procedures**

Our management, with the participation of our Chief Executive and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. 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. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our Chief Executive and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level as a result of the following material weaknesses:

---

| |
|:---|
| Lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by our Chief Executive and Chief Financial Officer. |
| Lack of a formal review process that includes multiple levels of review, as all accounting and financial reporting functions are performed by our Chief Executive and Chief Financial Officer and the work is not reviewed by anyone. |
| Lack of an independent Board of Directors, and lack of a board member designated as an independent financial expert to the Company. As a result, there is a lack of independent oversight of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures made by the Company. |

---

**Changes in Internal Control over Financial Reporting**

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other factors that occurred during the period of our evaluation or subsequent to the date we carried out our evaluation which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any system of controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS.**

We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.

**ITEM 1A. RISK FACTORS.**

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

*[Open – do the shares issued upon note conversion need to be added here. They were issued directly under DTC Fast by the TA]*

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

None.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**ITEM 5. OTHER INFORMATION.**

During the three months ended March 31, 2026, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

**ITEM 6. EXHIBITS**.

---

| | |
|:---|:---|
| Exhibit | Description |
| 31.1\* | [Section 302 Certification of Principal Executive and Principal Financial Officer](ex31-1.htm) |
| 32.1\*\* | [Section 1350 Certification of Principal Executive and Principal Financial Officer](ex31-2.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Schema Document |
| 101.CAL\* | Inline XBRL Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Labels Linkbase Document |
| 101.PRE\* | Inline XBRL Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |

---

\* Filed herewith.

\*\*Furnished herewith.

**SIGNATURES**

Pursuant to the requirements 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.

---

| | |
|:---|:---|
| **Hypha Labs, INC.** | **Hypha Labs, INC.** |
| (Registrant) | (Registrant) |
| By: | */s/ A. Stone Douglass* |
|  | A. Stone Douglass |
|  | Chairman, President, Chief Executive Officer, Chief Financial Officer and Secretary<br> (Principal Executive Officer and<br> Principal Financial/Accounting Officer) |
| Dated: | May 15, 2026 |

---

## Exhibit 31.1

**EXHIBIT 31.1**

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, A. Stone Douglass, certify that:

1. I
 have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2026 of Hypha Labs, 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.

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):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 small business issuer's
 internal control over financial reporting.

Date: May 15, 2026

---

| |
|:---|
| */s/ A. Stone Douglass* |
| A. Stone Douglass, Chief Executive Officer |
| Chairman, President, Chief Executive Officer, Chief Financial Officer and Secretary<br> (Principal Executive Officer and<br> Principal Financial/Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

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 Hypha Labs, Inc. (the "Company") on Form 10-Q for the fiscal quarter ended March 31, 2026 (the "Report"), I, A. Stone Douglass, 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

Dated: May 15, 2026

---

| |
|:---|
| */s/ A. Stone Douglass* |
| A. Stone Douglass, Chairman, President, Chief Executive Officer, Chief Financial Officer and Secretary<br> (Principal Executive Officer and<br> Principal Financial/Accounting Officer) |

---

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.