UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, ~~2023~~2024

☐ 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

~~DIGIPATH,~~Hypha ~~INC~~Labs, Inc.

(Exact name of registrant as specified in its charter)

nevada		27-3601979
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

~~6450~~5940 ~~Cameron~~S. ~~Street,~~Rainbow ~~Suite 113~~Boulevard

Las Vegas, Nevada 89118

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (702) 527-2060

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Securities registered pursuant to Section 12(g) of the Act: Common Stock: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐

No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐

No ☒

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 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to 240.10D-1(b). ☐

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

Yes ☐

No ☒

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant based upon the closing price of $0.~~0079~~022 per share as of March 31, ~~2023~~2024 was approximately $~~604~~2,~~532~~051,031.

As of January 1613, ~~2024~~2025, there were 87126,~~096~~546,~~820~~825 shares of registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

TABLE OF CONTENTS

		Page
PART I
	PART I
Item 1. Business	1
Item 1. Business		1
Item 1A. Risk Factors	4
Item 1A. Risk Factors		4
Item 1B. Unresolved Staff Comments	15
Item 1B. Unresolved Staff Comments		8
Item 1C. Cybersecurity	15
Item 1C. Cybersecurity		8
Item 2. Properties	15
Item 2. Properties		8
Item 3. Legal Proceedings	16
Item 3. Legal Proceedings		9
Item 4. Mine Safety Disclosures	16
Item 4. Mine Safety Disclosures		9
PART II
	PART II	9
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		9
Item 6. Selected Financial Data	19
Item 6. Selected Financial Data		11
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	26
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		17
Item 8. Financial Statements and Supplementary Data	26
Item 8. Financial Statements and Supplementary Data		18
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		19
Item 9A. Controls and Procedures	48
Item 9A. Controls and Procedures		19
Item 9B. Other Information	49
Item 9B. Other Information		20
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	49
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		20
PART III
	PART III
Item 10. Directors, Executive Officers and Corporate Governance	49
Item 10. Directors, Executive Officers and Corporate Governance		20
Item 11. Executive Compensation	50
Item 11. Executive Compensation		22
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	52
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		23
Item 13. Certain Relationships and Related Transactions, and Director Independence	52
Item 13. Certain Relationships and Related Transactions, and Director Independence		24
Item 14. Principal Accounting Fees and Services	53
Item 14. Principal Accounting Fees and Services		24
PART IV
	PART IV
Item 15. Exhibits and Financial Statement Schedules	53
Item 15. Exhibits and Financial Statement Schedules		25
Item 16. Form 10-K Summary	55
Item 16. Form 10-K Summary		26
SIGNATURES	56
SIGNATURES		27

PART I

Forward Looking Statements

This Form 10-K contains “forward-looking” statements including statements regarding our expectations of our future operations. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. Although the forward-looking statements in this Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them.

These risks and uncertainties include: ~~demand~~the ~~for~~successful development of our products; ~~and~~the ~~services,~~demand ~~governmental~~for ~~regulation~~our ofproducts; ~~the cannabis industry,~~ our ability to ~~maintain~~ ~~customer~~obtain and ~~strategic~~maintain customer ~~business~~ relationships,; the impact of competitive products; ~~and~~our ~~pricing,~~ability ~~growth~~to inmarket ~~targeted markets, the adequacy of our liquidity~~ and ~~financial~~grow ~~strength~~demand tofor ~~support~~ our ~~growth, general economic and market conditions~~products; our ability to ~~sustain,~~obtain ~~manage,~~additional orfinancing ~~forecast~~to ~~growth,~~launch our ~~ability~~business ~~to successfully make~~ and ~~integrate~~execute ~~acquisitions,~~our ~~new~~business ~~product~~strategy; ~~development~~general economic and ~~introduction,~~market ~~existing government~~conditions ~~regulations~~ and ~~changes~~consumer ~~in,~~discretionary spending; orour ~~the~~ability ~~failure~~ to ~~comply~~manage ~~with,~~our ~~government~~growth; ~~regulations,~~our ~~adverse publicity, difficulty in forecasting operating results, change in business strategy or development plans, business disruptions, and the~~ ability to ~~attract~~protect ~~and~~our ~~retain~~internal ~~qualified personnel.~~information ~~Although~~technology ~~the~~system ~~forward-looking~~against ~~statements~~security ~~in this report reflect the good faith judgment of our management~~breaches, ~~such statements~~ ~~can~~loss ~~only~~or beleakage ~~based on facts and factors currently known by them. In light~~ of ~~these~~data ~~risks~~ and ~~uncertainties,~~other ~~you~~disruptions; ~~are~~our ~~cautioned not to place undue~~ reliance on ~~these~~third ~~forward-looking~~party ~~statements.~~manufacturers ~~Except~~who asmay ~~required~~be bybased ~~law,~~outside wethe ~~undertake~~United ~~no obligation to announce publicly revisions~~States; weour ~~make~~ability to ~~these~~protect ~~forward-looking~~our ~~statements~~intellectual toproperty; ~~reflect~~and ~~the~~our ~~effect~~reliance ofon ~~events~~key orindividuals ~~circumstances that may arise after the date of this report. All written~~ and ~~oral~~our ~~forward-looking~~ability ~~statements made subsequent~~ to ~~the~~attract ~~date of this report~~ and ~~attributable~~retain ~~to us or persons acting on our behalf are expressly~~ qualified ~~in their entirety by this section~~ personal.

~~ITEM~~These 1and other risks are described under the heading “Risk Factors” in this Form 10-K. ~~DESCRIPTION~~In OFlight ~~BUSINESS~~of these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to announce publicly revisions we make to these forward-looking statements to reflect the effect of events or circumstances that may arise after the date of this report. All written and oral forward-looking statements made subsequent to the date of this report and attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section.

ITEM 1. BUSINESS

Background

Hypha Labs, Inc. (formerly Digipath, 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 know 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.

Overview

~~Digipath,~~Hypha Products Inc., ~~was~~a ~~incorporated~~wholly inowned ~~Nevada~~subsidiary onof ~~October~~the 5,Company ~~2010.~~was ~~Digipath,~~formed ~~Inc.~~on ~~and~~April ~~its subsidiaries (“Digipath~~18,” ~~the “Company~~2024,~~” “we,”~~ ~~“our”~~to orengage ~~“us”)~~in ~~are~~the aresearch, ~~service-oriented~~development ~~independent testing laboratory~~ and ~~data analytics company~~commercialization ~~focused~~of ona bioreactor, the ~~developing~~Hypha ~~cannabis~~Micropearl ~~and~~bioreactor, ~~hemp~~a ~~markets,~~home ~~and~~appliance ~~supports~~designed to accelerate the ~~cannabis~~production ~~industry’s~~of ~~best~~nutritionally ~~practices~~beneficial mushrooms for ~~reliable~~human ~~testing~~consumption. ~~Our~~ ~~mission~~The isCompany’s easy-to-use ~~provide~~device, ~~pharmaceutical-grade~~together ~~analysis~~with ~~and~~its ~~testing~~replacement tocartridges, ~~the~~safely ~~cannabis~~and ~~industry,~~effectively produces ~~under~~enriched ~~ISO-17025:2017~~mycelium ~~guidelines~~of functional mushrooms, toor ~~ensure consumers~~Micropearls, ~~and~~in ~~patients~~just ~~know~~eight ~~exactly~~days. ~~what~~These isMicropearls incontain ~~the~~active ~~cannabis~~mushroom ~~they~~ingredients that ~~ingest~~offer ~~and~~a way to ~~help~~harness ~~maximize~~ the ~~quality~~medicinal properties of ~~our~~fungi ~~clients’~~in ~~products through~~a ~~research,~~concentrated ~~development,~~easy ~~and~~to ~~standardization.~~handle ~~Digipath~~tasteless ~~has~~and ~~been~~odorless ~~operating~~form. aThese ~~cannabis-testing~~Micropearls can ~~lab~~be inincorporated ~~Nevada~~into ~~serving~~various ~~the~~food ~~state~~and ~~of Nevada~~beverages ~~since~~without ~~2015~~altering the flavor.

On April 20, 2023, the Company and Digipath Labs, Inc., a wholly-owned subsidiary of the Company (“Digipath Labs”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with DPL NV, LLC (the “Buyer”) pursuant to which Digipath Labs has agreed to sell substantially all of its assets to Buyer for a cash purchase price of $2.3 million, subject to adjustment. The closing of the transaction contemplated by the Purchase Agreement is subject to the approval of the Nevada Cannabis Compliance Board (the “CCB”) being obtained by June 30, 2024. We believe that the transaction may close as early as January 2024. Upon closing of the asset sale, the Company intends to seek to acquire another business. The Company has not yet commenced a search for candidates.

Business

Our cannabis testing business is operated through our wholly owned subsidiary, Digipath Labs, which performs all cannabis related testing using FDA-compliant laboratory equipment and processes. We opened our first testing lab in Las Vegas, Nevada in May of 2015 to serve the new State approved and licensed medical marijuana industry. We have decreased our focus on expansion efforts since the signing of the Purchase Agreement.

We seek to be the nation’s highest standard, full-service testing lab for cannabis, hemp and ancillary cannabis and hemp infused products. We are a third party independent testing laboratory facility for cannabis, cannabis infused products, hemp and other botanical nutraceuticals to serve growers, dispensaries, caregivers, producers, patients and eventually all end users of cannabis and botanical products.

Our ~~mission~~Hypha isMicropearl tobioreactor ~~provide~~will ~~pharmaceutical~~be sold with replaceable cartridges which are delivered pre-~~grade~~sterilized ~~analysis~~to the home and ~~testing~~ready to be inserted into the ~~cannabis~~device. ~~and~~These ~~hemp~~cartridges ~~industry,~~are ~~under~~filled ~~ISO-17025:2017~~with ~~guidelines,~~powerful tonutrient formulations which allow for the production of the Micropearls. The ~~ensure~~QR ~~consumers~~codes on the cartridges are scanned to the Hypha Lab app and ~~patients~~inserted ~~know~~into ~~exactly~~the ~~what~~device isand the Micropearls are produced and fully formed in eight days. After harvesting the ~~cannabis~~Micropoearls ~~and~~with ~~hemp~~a strainer, they ~~ingest~~are ~~and~~ready to be incorporated into a variety of foods. The cartridges help ~~maximize~~to minimize the ~~quality~~risk of mold or yeast contamination and help improve the success of the at home mushroom growth. We believe that our ~~client’s~~innovative bioreactor technology will disrupt traditional methods of mushroom production and bring lab-quality nutrient ingredients ~~products~~into ~~through~~the ~~research,~~home ~~development~~with convenience and ~~standardization~~efficiency.

AsWe aintend ~~premier~~to ~~cannabis~~continue ~~and~~the ~~hemp testing laboratory with ISO-17025:2017 accreditation~~design, wedevelopment ~~take a careful, strategic approach to all of our cannabis~~ and ~~hemp~~ testing. ~~A diverse array~~ of ~~tests~~the ~~combined~~Hypha ~~with~~Micropearl ~~our~~bioreactor ~~lab~~over ~~equipment and analytical instrumentation enable us to accurately test cannabis and hemp for potency,~~ the ~~presence~~next oftwelve ~~pesticides,~~months. ~~microbial contamination~~Initially, ~~metals and heavy metals, which include, but~~we ~~are~~will ~~not~~produce a limited ~~to,~~number ~~substances~~of ~~like~~bioreactors ~~arsenic,~~at ~~cadmium,~~our ~~lead,~~headquarters orfor ~~mercury. Not only is~~ testing ~~for~~purposes, ~~potency~~both ~~and~~with ~~Cannabidiol~~mycologists ~~(“CBD”)~~ and ~~tetrahydrocannabinol~~experts ~~(“THC”)~~in ~~content~~the ~~important, we recognize that more profound testing is needed particularly as a true~~functional ~~national~~mushroom ~~standard is developed~~industry. ~~Digipath~~Upon ~~Labs~~completion isof ~~committed~~the todesign ~~follow Food~~ and ~~Drug~~successful ~~Administration~~testing ~~(“FDA”),~~of ~~Drug~~the ~~Enforcement Agency~~Hypha ~~(“DEA”),~~Micropearl ~~Environmental Protection Agency (“EPA”)~~bioreactor, ~~and~~we USwill ~~Department~~seek ofto ~~Agriculture~~enter ~~(“USDA”)~~into ~~guidelines,~~a ~~proprietary~~manufacturing ~~standard~~arrangement ~~operating~~outside ~~procedures~~the ~~(“SOP”),~~United ~~and~~States ~~Good~~to ~~Lab~~manufacture ~~Practices~~the ~~(“GLP”)~~Hypha ~~that~~Micropearl ~~are~~bioreactor infor ~~line with~~commercial ~~current Federal and State governing bodies~~sale. WeOur ~~utilize~~goal ~~a variety of tests~~ is to ~~safely~~be ~~and~~in ~~effectively share enhanced understanding of~~ the ~~cannabis~~position ~~plant with caregivers, dispensaries and patients. We are committed~~ to market the ~~advancement~~Micropearl ofbioreactor ~~science~~ by ~~offering~~the aend ~~method~~ of ~~standardization~~calendar ~~for~~year ~~cannabis~~2025, ~~that~~although isthere ~~intricate~~can ~~and~~be ~~accurate.~~no ~~This~~assurance ~~approach~~we ~~and~~will achieve our ~~investment~~goal in ~~state-of-the-art~~this ~~testing~~time ~~equipment are~~period, ofor ~~the~~at ~~utmost importance~~all.

~~Digipath Labs screens medicinal and recreational cannabis for potentially harmful contaminants, including:~~Technology

-Traditional ~~Residual~~mushroom ~~Solvents~~cultivation ~~(for~~requires ~~extracts)~~extensive infrastructure and costly lab equipment, posing significant barriers to small scale producers. We address this issue with our innovative bioreactor technology which reduces costs, simplifies the process and ensures safe, high quality functional mushroom production, making it accessible to a broader audience.

Bioreactors are devices that utilize biological processes mediated by enzymes, cells, and microorganisms to produce and analyze substances. Unlike chemical reactions, biological reactions in bioreactors tend to be slower but are advantageous for producing fewer byproducts and maintaining catalytic activity without the need for high temperatures and pressures. This makes bioreactors cost-effective and essential for various ~~Moisture~~applications, including cell culture. Bioreactors find applications in numerous industries, such as:

~~- Water~~● ~~Activity~~Food Production: Used to produce fermented products like miso, soy sauce, sake, and wine. ● The Chemical Industry: Mass production of amino acids and sugars. ● Medicine and Research: Producing functional substances through cell culture. ● Physicochemical Analysis: Utilizing biosensors and autoanalyzers for detecting and quantifying substances.

-Bioreactors ~~Visual~~operate ~~Inspection~~by managing conditions such as temperature, pH, and pressure to facilitate reactions with immobilized enzymes and other biological elements, leading to the synthesis, decomposition, or conversion of materials to obtain desired products. Cells, microorganisms, and purified enzymes serve as primary reaction elements, with immobilization techniques enhancing separation efficiency from the products.

We believe that our technology will disrupt traditional methods, bringing lab-quality nutrient ingredients into the home with convenience ~~Pesticides~~and efficiency.

- Heavy metals, including mercury, arsenic, lead, cadmium, chromium and nickel

- Biological toxins, such as aflatoxin and ocratoxins

- Microbial contaminants including E. coli, salmonella, coliforms, aspergillus, gram negative bacteria, total aerobic bacteria and mold and yeast

Digipath Labs also tests cannabis and hemp for its quality, potency, and cannabinoid and terpene profiles, which determine the suitability of specific chemoprofiles for the treatment of specific ailments.

We utilize one of our two Ultra-High Performance Liquid Chromatographs (“UPLC”), which accurately separates and measures the cannabinoid content of any sample of flower, edible, concentrate or other cannabis products. Our Inductively Coupled Plasma Mass Spectrometer (“ICP-MS”) is utilized for heavy metals testing, and provides accurate readings for harmful metals ensuring that the Parts Per Billion (“PPB”) are substantially below the regulated and accepted trace amounts. Our laboratory testing equipment is calibrated using third party reference standards to ensure precision measurements throughout the testing process and has been certified in accordance with ISO-17025:2017 standards.

With accurate science becoming a major part of the cannabis and hemp industry, the major question is one of standards; we hold ourselves accountable and provide efficient and accurate research and results to our clients. Our test results are meant to help dispensaries, caregivers and patients know the concentration and quality of their cannabis without having to question the credibility of the data.

Market Overview

According to New Frontier Data, a cannabis researcher based in Washington, D.C., the hemp CBD business worldwide will grow from $4.4 billion in 2018 to over $14.7 billion by 2026, and the worldwide cannabis industry in 2019 generated $15 billion. In 2024 that will increase to $44.8 billion. Total legal sales of cannabis in current legal states are projected to grow at a compound annual growth rate (CAGR) of 14% over the next six years, reaching nearly $30 billion by 2025. This figure takes into account the likely projection that more states will legalize. Currently, thirty-nine states and the District of Columbia have passed some kind of medical and/or adult use marijuana laws.

* Annual sales of medical cannabis are projected to grow at a 17% CAGR through 2025, to an estimated $13.1 billion by 2025; adult-use sales are projected to grow at a 16% CAGR, to $16.6 billion. * An estimated 38.4 million U.S. adults consume cannabis at least once annually, from either a legal or illicit source. * 36% of cannabis consumers report using cannabis daily, and 59% use cannabis at least once a week.

With increased legalization nationwide, the lab-testing sector is expected to experience substantial growth. According to The Insight Partners, the cannabis testing market is expected to reach approximately $2.5 billion in 2025, with an estimated CAGR of 11.9% from 2017-2025. The data troves collected through the testing process are already creating value and could become an increasingly valuable asset and generate substantial revenue for the most accomplished laboratories. This data could also be used to determine specific genetic attributes of targeted cannabinoids and assist with maximizing medicinal benefits and individualized medicine in the future. Market

The global market for functional mushrooms was estimated to be at $34.75 billion in 2024, and is projected to grow to $65.83 billion by 2030 with a CAGR of 11.2% (Source: Grand View Research). While there are a variety of mushrooms that can provide health benefits, there are six main types of functional mushrooms with scientific evidence suggesting broader health benefits.

	●	Reishi
	●	Lions Mane
	●	Cordyceps
	●	Turkey Tail
	●	Chaga
	●	Shiitake

These different mushrooms are sold in various ways. The biggest place functional mushrooms are found is in health and wellness supplements. Shiitake and Lions Mane mushrooms are often eaten or used in cooking due to their lighter flavor and texture. Functional mushrooms can also be used to brew teas or are infused into other food products for consumption.

The global market is expected to exhibit significant growth during the forecast period owing to the rising awareness related to the benefits offered by consuming specialty mushrooms. The rising inclination of consumers toward functional foods further boosts market growth. Furthermore, increasing industry developments such as R&D activities to expand mushroom applications in different sectors and the launch of new products are influencing global market growth.

Intellectual Property

The Company has filed two U.S patent applications. The pending patents seek to protect the use of sophisticated machine learning algorithms to process mycelium, the vegetative part of fungi composed of an intricate network of hyphae. The Company believes that this has tremendous potential across various sectors including pharmaceuticals, nutraceuticals, and biotechnology. Traditionally, mycelium processing to produce psilocybin has faced challenges due to prolonged cultivation times and the necessity of soil-based mushroom growth over extended durations. To address these issues, Hypha Labs has introduced Artificial Intelligence (AI) with novel machine learning methods that overcome these barriers, providing a more efficient and sustainable way to process mycelium for cultivating, producing and extracting active psilocybin. The integration of advanced machine learning offers significant advantages, including optimized growth conditions, accelerated processing times, enhanced yield predictability, and reduced resource consumption, thus revolutionizing the mycelium industry.

We currently use the trademark Micropearls in connection with our bioreactor device. Although we have not registered this trademark, our use and claim to this trademark can protect us from third parties using this trademark for similar products. There can be no assurance however that we will not experience infringement of our trademark, Micropearls, or any other trademark we use in the future.

Competition

The ~~cannabis~~increasing ~~industry~~popularity inand ~~the~~acceptance ~~United~~of ~~States~~mushroom isbased-products ~~highly~~has ~~fragmented,~~led ~~rapidly~~to ~~expanding~~the ~~and~~rapid ~~evolving.~~development ~~The~~of ~~industry~~new isand ~~characterized~~innovative byproducts ~~new~~in ~~and~~the ~~potentially~~mushroom ~~disruptive~~industry. orThus, ~~conflicting~~manufacturers ~~legislation~~in ~~promulgated~~the onmushroom aindustry, ~~state-by-state~~owing ~~basis.~~to ~~Our~~these ~~competitors~~rapid ~~include~~advancements, ~~local~~are ~~enterprises,~~constantly ~~some~~working on innovative offormulations ~~which~~and ~~may~~delivery ~~have~~methods ~~financial,~~to ~~technical,~~make ~~sales,~~medical ~~marketing~~mushroom ~~and~~products ~~other~~more ~~resources~~palatable ~~greater~~and ~~than~~convenient ~~ours~~for consumers. These ~~companies~~manufacturers are ~~also~~focusing ~~compete~~on ~~with~~expanding us their global presence by adopting strategies such as investing in ~~recruiting~~joint ~~and~~ventures, ~~retaining~~partnerships, ~~qualified~~mergers ~~personnel~~and acquisitions and ~~consultants~~research and development in innovative product lines.

~~Our~~Although ~~competitive~~we ~~position~~do ~~depends~~not onbelieve ~~our~~there ~~ability~~are any other companies developing a bioreactor device to ~~attract~~produce functional mushrooms in the home, we do believe that there is ongoing research into the medical properties and ~~retain~~applications ~~qualified~~of ~~scientists~~various mushroom species for personal care and ~~other~~pharmaceuticals which ~~personnel~~continues to promote the development of new functional mushroom-based products. For instance, ~~develop~~in ~~effective~~August ~~proprietary~~2023, Four Sigmatic, a wellness products ~~and~~manufacturing ~~solutions~~company, ~~the~~launched ~~personal~~organic ~~relationships~~mushroom ofcomplex ~~our~~capsules ~~executive~~in ~~officers~~Calm, Focus, and ~~directors~~Memory varieties. These capsules contain lion’s mane mushroom extract, vitamin B12, and ~~our~~L-theanine. ~~ability~~Mushroom toPerfecti, ~~secure~~a ~~adequate~~company ~~capital resources.~~focused Weon ~~compete~~the toproduction ~~attract~~of ~~and~~mushroom-based products ~~retain~~from ~~customers~~mycelium, is producing a line of ~~our~~nutritional ~~services~~supplements. WeNature’s ~~compete~~Rise, ina ~~this~~manufacturer ~~area~~of organic mushroom products, launched Lion’s Mane organic powder extract on ~~the~~Amazon ~~basis~~in ofOctober ~~price~~2022 and Lifeway Foods, ~~regulatory~~Inc., ~~compliance~~a U.S. supplier of Kefir and fermented probiotic products, launched a new line of adaptogenic medical mushroom beverages at the Winter Fancy Food Show in Las Vegas in February ~~vendor~~2022. ~~relationships~~In August 2023, ~~usefulness~~Applied Food Sciences Inc. (“AFS”), ~~availability~~one of the leaders in supplying functional and organic ingredients, announced ~~excellent~~its ~~customer~~equity ~~service~~investment and ~~ease~~partnership with KAAPA Biotech, a Finland-based company. This partnership would help AFS expand its botanical portfolio by adding Nordic-grown medical mushroom extracts that could be used in food, beverages and supplements. These companies represent the availability of ~~use~~alternative sources of ~~our~~functional ~~services~~mushrooms offered to consumers.

Government Regulation

Marijuana is categorized as a Schedule-I controlled substance by the Drug Enforcement Agency and the United States Department of Justice and is illegal to grow, possess and consume under Federal law. A Schedule-I controlled substance is defined as a substance that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse. The Department of Justice defines Schedule- 1 controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.” However, since 1995, thirty-nine states and the District of Columbia have passed some kind of medical and/or adult use marijuana laws. This has created an unpredictable business-environment for dispensaries and collectives that legally operate under state-laws but in violation of Federal law. On August 29, 2013, United States Deputy Attorney General James Cole issued the Cole Memo to United States Attorneys guiding them to prioritize enforcement of Federal law away from the cannabis industry operating as permitted under state law, so long as:

● cannabis is not being distributed to minors and dispensaries are not located around schools and public buildings; ● the proceeds from sales are not going to gangs, cartels or criminal enterprises; ● cannabis grown in states where it is legal is not being diverted to other states; ● cannabis-related businesses are not being used as a cover for sales of other illegal drugs or illegal activity; ● there is not any violence or use of fire-arms in the cultivation and sale of marijuana; ● there is strict enforcement of drugged-driving laws and adequate prevention of adverse health consequences; and ● cannabis is not grown, used, or possessed on Federal properties.

The Cole Memorandum was meant only as a guide, not a rule of law, for United States Attorneys and did not alter in any way the Department of Justice’s Federal authority to enforce Federal law, including Federal laws relating to cannabis, regardless of state law. Moreover, the Cole Memorandum also provided that it could not be used as a defense to any criminal prosecution.

On January 4, 2018, United States Attorney General Jefferson Sessions issued a Memorandum to United States Attorneys rescinding the Cole Memorandum, stating that prosecutors should follow well-established principles in effect prior to the issuance of the Cole Memorandum that govern all Federal prosecutions in deciding which activities to prosecute under existing Federal laws. Federal legislation has been proposed over the years to reschedule or de-schedule cannabis, as well as to transform the Cole Memorandum into a rule of law.

~~Customers~~Further, advancements in biotechnology and mycology have enabled researchers to explore novel cultivation techniques and optimize growing conditions thereby enhancing the production of bioactive compounds in mushrooms. In May 2023, Optimi Health Corp., a Canadian-based company, opened a new mushroom research and development facility, consisting of two 10,000-square-feet facilities with ten growing rooms producing approximately 2,000 kilograms of dried psilocybin mushrooms a month. Thus, the global functional mushroom market share is anticipated to exhibit a promising growth rate in a competitive marketplace.

WeGovernment provide cannabis and hemp lab testing services in Las Vegas to Nevada licensed Medical Marijuana Enterprises (“MMEs”), and have expanded to recreational use facilities with the recently passed legislation that allows for the recreational use of marijuana in Nevada. We sell our services to these enterprises on a fixed fee per test or panel of tests, and offer a discounted price for customers based on volume. On June 17, 2014, Clark County initially approved a total of 117 special use permits for cultivation and 87 production applicants. Since the inception of legalized adult-use marijuana, Nevada has issued 288 cannabis-related licenses, including those for retail stores, cultivation, production, and testing labs, according to the state taxation department. We have worked with over 90 cultivators and producers in and around Clark and Nye County.Regulation

~~Marketing~~As a manufacturer and distributor of consumer products in the United States, the Company is subject to the Consumer Products Safety Act, ~~Sales~~which empowers the U.S. Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the U.S. Consumer Products Safety Commission could require the Company to repair, replace or refund the purchase price of one or more of its products, or the Company may voluntarily do so. Any repurchase or recall of products could be costly and ~~Support~~damage the Company’s reputation, as well as subject it to a sizable penalty that the Commission is empowered to impose.

WeMarketing ~~use a range of communication platforms to reach our target customers. The goal of the marketing strategy is to position us as the leading testing company in the botanical, nutraceutical,~~ and cannabis industries in the country starting in Nevada. Our marketing efforts include digital/online, industry conferences and affiliations, media outreach, direct response and public relations. We believe that these efforts have the ability to deliver our brand message in a powerful way to maximize audience reach.Sales

The Company intends to sell its products primarily online directly to consumers, with consumers purchasing our Hypha Micropearl bioreactor directly through our app. Customers will also be able to purchase replacement cartridges online through our website or third- party providers. We intend to offer a subscription service to our users, where they can have regularly scheduled deliveries to their homes of replacement cartridges which will offer savings compared to one-off purchases.

Seasonality

Our business is not subject to seasonality.

Insurance

We intend to maintain property, business interruption, product liability and casualty insurance.

Employees

As of ~~September~~January 3013, ~~2023~~2024, we had ~~seventeen~~seven employees. None of our employees are members of a trade union. We believe that we maintain ~~good~~ good relationships with our employees and have not experienced any strikes or shutdowns and have not been involved in any labor disputes.

In connection with the transactions contemplated by the Purchase Agreement, Digipath, Digipath Labs and Buyer entered into a Management Services Agreement, dated as of April 30, 2023 (the “Services Agreement”), pursuant to which the Buyer was engaged to manage the operations of the Company’s cannabis testing laboratory, subject to the approval of the CCB which was obtained on October 17, 2023. Pursuant to the Services Agreement, after the payment of expenses to third parties and a payment of 15% of cash collections to Digipath (but not less than $15,000) in each month, Buyer will be entitled to a management fee of $10,000 per month. Any remaining cash generated from the operation of the Lab in any month will be payable 45% to the Buyer and 55% to the Company. The description of the Services Agreement is qualified in its entirety by reference to the actual terms thereof, which have been filed with the SEC.

Corporate Information

Our principal executive offices are located at ~~6450~~5940 ~~Cameron~~S. ~~Street,~~Rainbow ~~Suite 113~~Boulevard, Las Vegas, Nevada 89118, Telephone No.: (702) 527-2060. Our ~~website~~ website is located at http://www.~~digipath~~hyphalab.com. The content on our website is available for information purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Report.

ITEM 1A. Risk Factors

The following important factors, and the important factors described elsewhere in this report or in our other filings with the Securities and Exchange Commission (“SEC”), could affect (and in some cases have affected) our results and could cause our results to be materially different from estimates or expectations. Other risks and uncertainties may also affect our results or operations adversely. The following and these other risks could materially and adversely affect our business, operations, results or financial condition.

An investment in the Company is highly speculative in nature and involves an extremely high degree of risk.

~~Our~~Risks ~~auditor~~Related ~~has~~To expressed substantial doubt about our ability to continue as a going concern. We may be unable to obtain additional capital required to implement our business plan. As a result of recurring net losses and insufficient cash reserves, our independent certified public accountant has added a paragraph to its report on our financial statements for the year ended September 30, 2023 questioning our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to achieve sustainable revenues and profitable operations. Since inception, we have raised funds primarily through the sale of equity securities. We will need additional funds to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations or cause substantial dilution for our stockholders. If we are unable to obtain additional funds, our ability to carry out and implement our planned business objectives and strategies will be significantly delayed, limited or may not occur. We cannot guarantee that we will become profitable. Even if we achieve profitability, given the competitive and evolving nature of the industry in which we operate, we may not be able to sustain or increase profitability and our failure to do so would adversely affect our business, including our ability to raise additional funds.Businesses

WeOur ~~have~~auditor ahas ~~limited~~expressed ~~operating~~substantial ~~history~~doubt ~~and~~about ~~if we are not successful in continuing to grow~~ our ~~business,~~ability ~~then we may have~~ to ~~scale~~continue ~~back~~as ora ~~even cease~~going ~~our ongoing business operations~~concern. We ~~have~~may abe ~~limited~~unable ~~operating history. Our operations are subject~~ to ~~all~~obtain ~~the~~additional ~~risks inherent~~capital inrequired ~~the~~to ~~establishment~~implement ~~of a developing enterprise and the uncertainties arising from the absence of a significant operating history. If~~ our business plan ~~is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company~~.

~~Our~~As ~~plans~~a ~~are~~result ~~dependent~~of ~~upon~~recurring ~~key~~net ~~individuals~~losses and ~~the~~insufficient ~~ability~~cash toreserves, ~~attract~~our ~~qualified~~independent ~~personnel.~~certified Inpublic ~~order~~accountant tohas ~~execute~~added ~~our~~a ~~business~~paragraph ~~plan,~~to weits ~~will~~report ~~be dependent~~ on ~~upon~~ our ~~executive~~financial ~~officers~~statements ~~and~~for ~~directors,~~the asyear ~~well~~ended asSeptember ~~other~~30, ~~key~~2024 ~~personnel.~~questioning ~~The~~our ~~loss~~ability ofto ~~any~~continue ofas ~~the~~a ~~foregoing~~going ~~individuals~~concern. ~~could~~Our ~~have~~ability to continue as a ~~material~~going ~~adverse~~concern ~~effect~~is dependent upon our ~~business~~ability ~~prospects.~~to ~~Moreover,~~raise ~~our~~additional ~~success~~capital ~~continues~~and to ~~depend~~achieve tosustainable arevenues and ~~significant~~profitable ~~extent~~operations. ~~on our~~Since ~~ability~~inception, towe ~~identify,~~have ~~attract,~~raised ~~hire,~~funds ~~train~~primarily ~~and~~through ~~retain~~the ~~qualified~~sale ~~professional,~~of ~~creative,~~equity ~~technical~~securities and ~~managerial~~convertible ~~personnel~~notes. ~~Competition~~ ~~for~~We ~~such~~will ~~personnel~~need isadditional ~~intense,~~funds to commercially launch and ~~there~~then ~~can~~operate beour nobusiness. No assurance can be given that weany future financing will be ~~successful~~available ~~in identifying~~or, ~~attracting,~~if ~~hiring~~available, ~~training, and~~that ~~retaining~~it ~~such~~will ~~personnel~~be inon ~~the~~terms ~~future.~~that ~~If we~~ are ~~unable~~satisfactory to ~~hire,~~us. ~~assimilate~~Even ~~and~~if ~~retain~~we ~~such~~are ~~qualified~~able ~~personnel~~to inobtain ~~the~~additional ~~future~~financing, ~~our~~ ~~business,~~it ~~operating~~may ~~results,~~contain ~~and~~undue ~~financial~~restrictions ~~condition~~on ~~could~~our beoperations ~~materially~~or ~~adversely~~cause ~~affected.~~substantial Wedilution ~~may~~for ~~also~~our ~~depend~~stockholders. onIf ~~third~~we ~~party~~are ~~contractors and~~unable ~~other~~to ~~partners~~obtain additional funds, toour ~~assist~~ability ~~with~~to ~~the~~carry ~~execution~~out ofand implement our planned business ~~plan.~~objectives ~~There~~and ~~can~~strategies will be nosignificantly ~~assurance~~delayed, limited or may not occur. We cannot guarantee that we will beever ~~successful~~generate inrevenue ~~either~~and become profitable. Even if we achieve profitability, given ~~attracting~~the competitive and ~~retaining~~evolving ~~qualified~~nature ~~personnel,~~of orthe ~~creating~~industry ~~arrangements~~in ~~with~~which ~~such~~we ~~third~~operate, ~~parties.~~we ~~The~~may ~~failure~~not be able to ~~succeed~~sustain inor ~~these~~increase ~~endeavors~~profitability and ~~would~~our ~~have~~failure ato ~~material~~do ~~adverse~~so ~~effect~~would onadversely affect our business, including our ability to ~~consummate~~raise ~~our~~additional ~~business plans~~funds.

~~Risks~~Our ~~Related~~limited Tooperating ~~Cannabis~~history ~~Related~~in ~~Businesses~~our current business makes it difficult to evaluate our current business and future prospects and the risk of your investment.

~~Our~~Although ~~business~~we iswere ~~dependent~~incorporated onin ~~state~~2010, ~~laws~~we ~~pertaining~~were topreviously in the ~~cannabis~~business ~~industry.~~of Asoperating ofa ~~December~~service-oriented ~~2023~~independent testing laboratory, ~~thirty-eight~~data analytics ~~states~~and media firm focused on developing cannabis and hemp markets. We sold the ~~District~~ assets of ~~Columbia~~this ~~allow~~business ~~its~~in ~~citizens~~2024, and recently positioned our business to ~~use~~develop ~~medical~~and ~~cannabis.~~sell ~~Additionally,~~a ~~twenty-four~~bioreactor ~~states~~device ~~and~~for the ~~District~~production of ~~Columbia~~functional mushrooms. As such we have ~~legalized~~a limited operating ~~cannabis~~history ~~for~~upon ~~adult~~which ~~recreational~~to ~~use,~~evaluate ~~and~~our ~~additional~~commercial ~~recreational~~prospects. ~~measures~~Our ~~are~~historical ~~expected~~results toare benot ~~pursued~~indicative byof ~~other~~our ~~states~~future results in the ~~future.~~new ~~Continued~~line ~~development~~ of ~~the~~business. ~~cannabis~~Our ~~industry~~limited isoperating ~~dependent~~history ~~upon~~makes ~~continued~~it ~~legislative~~difficult ~~authorization~~for ofpotential ~~cannabis~~investors atto ~~the~~evaluate ~~state~~our ~~level.~~prospective ~~Any~~operations ~~number~~and business ofprospects. ~~factors~~Investors ~~could~~should ~~slow~~consider orour ~~halt~~future ~~progress~~prospects in ~~this~~light ~~area.~~of ~~Further,~~the ~~progress~~risks inand ~~the~~uncertainties ~~cannabis~~of ~~industry,~~early-stage ~~while~~companies ~~encouraging,~~operating in isa ~~not~~competitive ~~assured~~environment. ~~While there~~We may beencounter ~~ample~~unanticipated ~~public~~problems ~~support~~as ~~for~~we ~~legislative~~continue ~~action,~~to ~~numerous~~refine ~~factors~~our ~~impact~~business ~~the~~model ~~legislative~~and ~~process.~~may ~~Any~~be ~~one~~forced ~~of these factors could~~to ~~slow~~make orsignificant ~~halt~~changes ~~use~~to ofbe ~~cannabis,~~successful ~~which~~in ~~would~~the ~~negatively impact our business~~marketplace.

~~Cannabis~~We ~~remains~~will ~~illegal~~require ~~under~~substantial ~~Federal~~additional ~~law~~financing ~~and~~to aachieve ~~change in Federal enforcement practices could significantly and negatively affect~~ our ~~business. Despite the development of a cannabis industry legal under state laws~~goals, ~~state laws legalizing medicinal~~ and ~~adult cannabis use are in conflict with the Federal Controlled Substances Act, which classifies cannabis as~~ a ~~Schedule-I~~failure ~~controlled substance and makes cannabis use and possession illegal on a national level. The United States Supreme Court has ruled that it is the Federal government that has the right~~ to ~~regulate~~obtain ~~and~~this ~~criminalize~~necessary ~~cannabis,~~capital ~~even~~when ~~for~~needed ~~medical purposes, and thus Federal law criminalizing the use of cannabis~~could ~~preempts~~force ~~state~~us laws that legalize its use. While the Obama Administration’s Department of Justice adopted a policy (known as the Cole Memorandum) that effectively stated that it was not an efficient use of resources to ~~direct Federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical cannabis~~delay, ~~on January 4~~limit, ~~2018, the~~reduce ~~United~~or ~~States~~terminate ~~Attorney~~our ~~General~~product ~~rescinded~~development ~~the~~or ~~Cole~~commercialization ~~Memorandum~~efforts. ~~The Federal government’s enforcement of Federal laws could cause significant financial damage to us and our shareholders.~~

We plan to continue the development of the Hypha Micropearl bioreactor over the next twelve months with the goal of commercializing the device by the end of calendar year 2025. Accordingly, we will continue to incur additional substantial development costs and other expenses to commercialize our products. We cannot reasonably estimate the actual amounts necessary to execute our business strategy and successfully launch our business. Further we cannot estimate the costs involved in the development, manufacture and commercialization of any future products. In addition, other unanticipated costs may arise. We will require additional financing to execute our business plan. As a result, until we can generate substantial revenues from our products, we expect to finance our cash needs though equity offerings, debt financings or other capital sources.

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate our development activities for our products or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our products.

~~The~~We ~~loss~~will orinitially ~~temporary~~be ~~suspension of one or more of our licenses could significantly reduce our revenues. Our ability to operate our cannabis testing lab is~~ dependent ~~upon maintaining licenses issued by state and local regulators in Nevada. Our cannabis testing and business licenses were briefly suspended by Nevada regulators~~ on ~~January~~a ~~19,~~limited ~~2018~~number ~~and were reinstated on January 31, 2018. This significantly affected our financial results for the second and third fiscal quarters~~ of ~~2018. In order to retain our licenses~~customers, ~~we are required to comply with ongoing compliance~~ and ~~reporting~~any ~~requirements~~significant ~~and~~decline ~~ongoing~~in ~~regulation~~business ~~and~~from ~~oversight~~one ~~by governmental authorities. Any loss~~ or ~~temporary~~more ~~suspension~~ of our ~~licenses or any failure to comply with any such regulatory requirements or any failure to maintain any~~customers ~~required~~could ~~licenses~~adversely ~~would~~affect ~~have a material adverse effect on~~ our ~~business,~~operating ~~financial condition,~~ results ~~of operation and, in the extreme case, require us to discontinue operations~~.

As ~~the~~an ~~possession~~early-stage ~~and use of cannabis is illegal under the Federal Controlled Substances Act~~company, we ~~may~~will beinitially ~~deemed to~~ be ~~aiding~~dependent ~~and~~on ~~abetting illegal activities through the services that we provide. As~~ a ~~result,~~limited wenumber ~~may~~of becustomers ~~subject~~ to ~~enforcement~~purchase ~~actions by law enforcement authorities, which would materially and adversely affect~~ our ~~business.~~device ~~Under~~as ~~Federal~~well ~~law,~~as ~~and~~to ~~more specifically the Federal Controlled Substances~~purchase ~~Act,~~replacement ~~the~~cartridges ~~possession,~~for use, ~~cultivation, and transfer of cannabis is illegal. Our business provides services to customers that are engaged~~ in the ~~business of possession, use, cultivation, and/or transfer of cannabis~~device. As a result, ~~law~~if ~~enforcement~~customers ~~authorities,~~fail ~~in their attempt~~ to ~~regulate~~place ~~the~~anticipated ~~illegal~~orders, ~~use~~change ofplanned ~~cannabis~~quantities, delay ~~may~~purchases, ~~seek~~or tochange ~~bring~~product anpreferences ~~action~~for orreasons ~~actions~~beyond ~~against~~our uscontrol, ~~including,~~we ~~but~~could ~~not~~experience ~~limited, to~~ a ~~claim~~decline ~~of aiding~~in ~~and~~our ~~abetting~~operating ~~another’s criminal activities~~results. Sales ~~The~~in ~~Federal~~the ~~aiding~~consumer ~~and~~product ~~abetting~~segment ~~statute~~are ~~provides~~highly ~~that~~seasonal ~~anyone~~and ~~who~~dependent ~~“commits an~~upon ~~offense against~~ the United States orretail ~~aids,~~markets ~~abets,~~and ~~counsels,~~consumer ~~commands~~spending. Traditionally, ~~induces~~this orsegment ~~procures~~has ~~its~~recognized ~~commission,~~a issubstantial ~~punishable~~portion asof aits ~~principal.” 18~~sales ~~U.S.C.~~during ~~§2(a).~~the Asholiday aselling ~~result~~season. ofAny ~~such~~downturn anin ~~action~~the general economy, weshift ~~may~~in beconsumer ~~forced~~spending toaway ~~cease~~from ~~operations~~housewares/small ~~and~~appliances, ~~our~~or ~~investors~~further ~~could~~deterioration ~~lose~~in ~~their~~the ~~entire~~financial ~~investment.~~health of ~~Such~~our ancustomer ~~action~~base ~~would~~could ~~have~~adversely aaffect ~~material negative effect on~~ our ~~business~~sales and ~~operations~~operating results.

~~Laws~~Our ~~and~~business ~~regulations~~model ~~affecting the cannabis~~ and ~~marijuana~~growth ~~industries~~strategy ~~are~~depend ~~constantly~~on ~~changing, which could detrimentally affect~~ our ~~business, and~~marketing weefforts ~~cannot predict the impact that future regulations may have on us. Local, state~~ and ~~Federal~~ability ~~cannabis laws and regulations are constantly changing and they are subject~~ to ~~evolving~~introduce ~~interpretations, which could require us to incur substantial costs associated with compliance or to alter one or more of~~ our ~~service offerings. In addition~~products, ~~violations~~maintain ~~of these laws, or allegations of such violations, could disrupt~~ our ~~business~~brand and ~~result in a material adverse effect on our revenues, profitability, and financial condition. We cannot~~attract ~~predict~~customers ~~the~~to nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our ~~business.~~platform ~~Any change~~ in ~~law or interpretation could have~~ a ~~material~~cost-effective ~~adverse effect on our business, financial condition, and results of operations~~manner.

~~Federal~~Our ~~enforcement~~success ~~practices~~depends ~~could~~on ~~change~~our ~~with~~ability ~~respect~~ to ~~services~~acquire ~~providers~~and toretain ~~participants~~customers in ~~the~~a ~~cannabis~~cost-effective ~~industry,~~manner ~~which~~through ~~could~~marketing ~~adversely impact~~efforts ~~us.~~and Ifexposure ~~the~~to ~~Federal~~our products. ~~government~~In ~~were~~order to ~~change~~create ~~its~~and ~~practices~~expand our customer base, orwe ~~were~~will need to ~~expand~~appeal ~~its~~to ~~resources~~and ~~attacking~~acquire ~~providers~~customers inwho ~~the~~have ~~cannabis~~not historically ~~industry,~~consumed ~~such~~functional ~~action~~mushrooms ~~could~~or ~~have~~used a ~~materially~~bioreactor ~~adverse~~device ~~effect~~to ongrow ~~our~~these ~~operations,~~mushrooms. ~~our~~We ~~customers,~~plan orto ~~the~~make ~~sales~~a ofsignificant ~~our~~investment ~~products.~~related Itto iscustomer ~~possible~~acquisition ~~that~~and expect to continue to spend significant amounts to acquire additional ~~Federal~~customers. orOur ~~state~~advertising ~~legislation~~efforts ~~could~~will consist beprimarily ~~enacted~~of email marketing, online advertisements and promotions, digital marketing and social media. These efforts are expensive and may not result in the ~~future~~cost-effective acquisition of customers. We cannot assure you that ~~would~~the ~~prohibit~~net ~~our~~profit from new customers ~~from~~we ~~selling~~acquire ~~cannabis,~~will ~~and~~ultimately ifexceed ~~such~~the ~~legislation~~cost ~~were~~of ~~enacted,~~acquiring ~~such~~those customers ~~may~~through ~~discontinue~~enhancements to the ~~use~~customer ofexperience on our ~~services~~website, mobile-optimized websites and mobile operations. WeIf ~~cannot~~we ~~predict~~fail to deliver a quality shopping experience, or if consumers do not perceive the ~~nature~~products we offer to be of ~~any~~high ~~future~~value ~~laws,~~and ~~regulations~~quality, ~~interpretations~~we ormay ~~applications,~~not ~~nor~~be ~~can~~able to acquire new customers. If we ~~determine~~are ~~what~~unable ~~effect~~to ~~additional~~acquire ~~governmental~~new ~~regulations~~customers who purchase orproducts ~~administrative~~in ~~policies~~numbers ~~and~~sufficient ~~procedures~~to grow our business, ~~when~~we ~~and~~may ifnot ~~promulgated~~be able to generate the scale necessary to drive beneficial network effects with our suppliers or efficiencies in our logistics network, ~~could~~our ~~have~~net onrevenue may decrease, and our business, financial condition and operating results may be materially adversely affected.

~~Expansion~~We bybelieve ~~well-established~~that ~~laboratory~~many ~~testing~~of ~~companies~~our ~~into~~new ~~the~~customers ~~cannabis~~will ~~industry~~originate ~~could~~from ~~prevent~~word-of-mouth usand ~~from~~other ~~realizing~~non-paid ~~anticipated~~referrals ~~growth~~from inexisting customers. Therefore, ~~and~~we ~~revenues.~~must ~~Traditional~~ensure ~~laboratory~~that ~~testing~~our ~~companies~~existing ~~may~~customers ~~expand~~remain ~~their~~loyal ~~businesses~~to ~~into~~us ~~cannabis~~in ~~testing~~order to continue receiving those referrals. If ~~they~~our ~~decided~~efforts to satisfy ~~expand~~our ~~into~~existing ~~cannabis~~customers ~~testing~~are not successful, ~~this~~we ~~could~~may ~~hurt~~not ~~the~~be ~~growth~~able ofto ~~our~~acquire ~~business~~new ~~and~~customers ~~cause~~in ~~our~~sufficient ~~revenues~~numbers to becontinue ~~lower~~to ~~than~~grow our business, or we ~~expect~~may be required to incur significantly higher marketing expenses in order to acquire new customers.

Our success depends in part on our ability to increase our net revenue per active customer. If our efforts to increase customer loyalty and repeat purchasing as well as maintain high levels of customer engagement are not successful, our growth prospects and revenue will be materially adversely affected.

Our ability to grow our business depends on our ability to retain our existing customer base and generate increased revenue and repeat purchases from this customer base and maintain high levels of customer engagement. To do this, we must continue to provide our customers and potential customers with a unified, convenient, efficient and differentiated shopping experience by:

	●	providing imagery, tools and technology that attract customers who historically would not have purchased our mushroom products;

	●	maintaining a high-quality and diverse portfolio of nutrient and mycelium products to be used with the bioreactor device to encourage repeat sales from existing customers;

	●	delivering products on time and without damage; and

	●	maintaining and further developing our online and mobile platforms.

~~Due~~If ~~to our involvement in the cannabis industry,~~ we ~~may~~fail ~~have a difficult time obtaining the various insurances that are desired~~ to ~~operate our~~increase ~~business,~~net ~~which~~revenue ~~may~~per ~~expose~~active ~~us to additional risk and financial liabilities. Insurance that is otherwise readily available~~customer, ~~such~~ asgenerate ~~workers’~~repeat ~~compensation,~~purchases ~~general~~or ~~liability,~~maintain ~~and~~high ~~directors~~levels ~~and~~of ~~officers~~customer ~~insurance~~engagement, isour ~~more difficult for us to find, and more~~growth ~~expensive~~prospects, ~~because~~operating weresults ~~are~~and ~~service~~financial ~~providers~~condition tocould ~~companies in the cannabis industry. We currently have adequate coverage, however, there are no guarantees that we will~~ be ~~able~~materially toadversely ~~find such insurances in the future, or that the cost will be affordable to us~~affected. ~~If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities.~~TM

~~Participants~~The inCompany ~~the~~may ~~cannabis~~not industry have difficulty accessing the service of banks, which makes it difficult for us to operate. Despite rules issued by the United States Department of the Treasury mitigating the risk to banks that do business with cannabis companies permitted under state law, as well as guidance from the United States Department of Justice, banks remain wary to accept funds from businesses in the cannabis industry. Our prior bank at which we maintained deposit accounts forced us to close our accounts. While after much difficulty we were recently able find a replacement banking institution, there can be nosuccessful ~~assurance that we will be able to maintain this banking relationship. Since the use of cannabis remains illegal under Federal law, there remains a compelling argument that banks may be~~ in ~~violation of~~developing ~~Federal law when accepting for deposit, funds derived from~~ the ~~sale~~Hypha orMicropearl ~~distribution~~bioreactor ~~of cannabis. Consequently, businesses involved in the cannabis industry, including us, continue to have trouble establishing~~ and ~~maintain~~introducing ~~banking~~any ~~relationships.~~new ~~An inability to open~~ and ~~maintain~~improved ~~bank~~models ~~accounts may make it difficult for us and our customers to do business. In addition, our inability to maintain a bank account previously resulted in our holding large sums~~ of ~~cash.~~the ~~Although we store our cash in a secure safe, holding large sums of cash exposes us to a greater risk of theft~~device.

~~The~~We ~~outbreak~~plan to continue the design, development and testing of the ~~COVID-19~~Hypha ~~coronavirus~~Micropearl ~~has~~bioreactor ~~negatively~~over ~~impacted~~the ~~and~~next ~~could~~twelve ~~continue~~months. toIf ~~negatively~~the ~~impact~~bioreactor performs ~~our~~as ~~business~~expected, ~~and~~of which there can be no assurance, we will introduce it into the ~~global~~marketplace. ~~economy~~The introduction of the initial Hypha Micropearl bioreactor will require substantial expenditures for advertising and marketing to gain marketplace recognition. Further, Inafter ~~addition~~the introduction and sale of the initial Hypha Micropearl bioreactor, the ~~COVID-19~~ability ~~pandemic~~to ~~could~~develop ~~negatively~~new ~~impact~~and improved devices will be important to our long-term success. The ability to ~~obtain~~develop ~~financing~~new ~~when~~and ~~required~~improved devices, will depend upon, among other things, whether we can develop and fund technological innovations and successfully anticipate consumer needs and preferences. There is no guarantee that we will be successful in developing products necessary to compete effectively in the functional mushroom industry or that we will be successful in advertising, marketing and selling the bioreactor or any new products.

~~The~~Product ~~COVID-19~~recalls ~~coronavirus has spread across the globe and is impacting worldwide economic activity. A pandemic, including COVID-19~~ or ~~other public~~lawsuits ~~health~~relating ~~epidemic,~~to ~~poses~~defective ~~the~~products ~~risk~~could ~~that~~have ~~we or our employees, customers, and other commercial partners may be prevented from conducting business activities for~~ an ~~indefinite~~adverse ~~period~~effect ofon ~~time, including due to~~ the ~~spread of the disease or shutdowns requested or mandated by governmental authorities. During portions of our year ended September 30, 2022, the~~ Company~~’s cannabis testing operations significantly declined due to the decline in the Nevada cannabis markets~~, ~~which~~as ~~resulted~~could ~~in turn from~~ the ~~substantial~~imposition ~~decline in Nevada tourism due to COVID-19. While our operations have recently improved due to the reopening~~ of ~~Nevada~~industry ~~casinos and increased tourism compared to its~~sustainability ~~recent depressed levels, there can be no assurance that this trend will continue~~standards. ~~COVID-19 has also had an adverse impact on global economic conditions, which could impair our ability to raise capital when needed.~~

~~Risks~~As ~~Related~~a Tomanufacturer ~~Our~~and ~~Common~~distributor ~~Stock~~of consumer products in the United States, the Company is subject to the Consumer Products Safety Act, which empowers the U.S. Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the U.S. Consumer Products Safety Commission could require the Company to repair, replace or refund the purchase price of one or more of its products, or the Company may voluntarily do so. Any repurchase or recall of products could be costly and damage the Company’s reputation, as well as subject it to a sizable penalty that the U.S. Consumer Products Safety Commission is empowered to impose. If the Company removed products from the market, its reputation or brand could be tarnished and it might have large quantities of finished products that could not be sold. The Company could also face exposure to product liability claims if one of its products were alleged to have caused property damage, bodily injury or other adverse effects. Although the Company intends to maintain product liability insurance for a reasonable level of claims, there is no assurance that such insurance will be sufficient to cover any potential claim. Moreover, many states do not allow insurance companies to provide coverage of punitive damages, in the event such damages were imposed. Additionally, the Company does not maintain product recall insurance. As a result, product recalls or product liability claims could have a material adverse effect on the Company’s business, results of operations and financial condition. The portable appliance industry association has a framework for a sustainability standard for the industry but has yet to develop specific guidelines for implementation. When and if developed, the standards will do nothing for the environment but will entail the addition of significant bureaucracy and outside certification fees. As such, compliance will be burdensome and expensive.

~~Our~~Macroeconomic ~~operating~~trends ~~results~~including ~~may~~inflation ~~fluctuate~~and ~~causing~~rising ~~volatility~~interest inrates ~~our stock price. Our operating results~~ may ~~fluctuate~~adversely asaffect ~~a result of a number of factors, many of which are outside of~~ our ~~control.~~financial ~~The~~condition ~~following~~and ~~factors may affect our operating~~ results ~~causing~~of ~~volatility in our stock price:~~operations.

●Macroeconomic trends, ~~Our~~including ~~ability~~increases toin ~~execute~~inflation and rising interest rates, may adversely impact our business ~~plan~~, ~~compete~~financial ~~effectively~~condition and ~~attract~~results of ~~customers;~~operations. ●Inflation ~~Our~~in ~~ability~~the toUnited ~~respond~~States ~~effectively~~has recently declined and is expected to aremain ~~rapidly~~at ~~evolving~~its ~~regulatory~~current ~~and~~reduced ~~competitive~~level ~~landscape;~~in ●the ~~The~~near-term. However, ~~amount~~rising ~~and~~inflation ~~timing~~in ofthe future could have an adverse impact on our operating ~~costs~~expenses and ~~capital~~any ~~expenditures~~potential ~~related~~borrowings under credit facilities. There is no guarantee we will be able to mitigate the ~~maintenance~~impact ~~and~~of ~~expansion~~rising ofinflation. The Federal Reserve has started reducing interest rates with the decline in inflation but there is no assurance that rates will continue to decline throughout our ~~business~~fiscal year ending September 30, ~~operations~~2025. ~~and~~If ~~infrastructure;~~interest ●rates ~~Our~~remain ~~ability~~high, towe ~~obtain~~cannot ~~working~~assure you that our access to capital ~~financing;~~and ●other ~~Our~~sources ~~ability~~of tofunding will ~~attract~~not become constrained, ~~motivate~~which could adversely affect the availability and ~~retain~~terms ~~top-quality~~of ~~employees;~~any ●desired ~~Investors’~~borrowings. ~~general~~Such ~~perception~~future ofconstraints could ~~us;~~increase ~~and~~our ●borrowing ~~General~~costs, ~~economic~~which ~~conditions~~would ~~and~~make ~~those~~it ~~economic~~more ~~conditions~~difficult ~~specific~~or expensive to ~~the~~obtain ~~cannabis~~financing, ~~industry~~which could slow or deter future growth.

~~Trading~~Our inbusiness ~~our common stock has been limited, there~~ is nodependent ~~significant~~on ~~trading~~general ~~market~~economic ~~for~~conditions ~~our common stock,~~ and ~~purchasers~~consumer ofdiscretionary ~~our~~spending, ~~common stock may be unable to sell their shares. Our common stock is currently eligible for quotation on the OTCQB~~ and ~~OTCBB,~~reductions ~~however trading to date has been limited. If activity~~ in ~~the~~such ~~market~~spending ~~for~~might ~~shares of our common stock does not increase, purchasers of our shares may find~~adversely itaffect ~~difficult to sell their shares. We currently do not meet~~ the initial listing criteria for any registered securities exchange, including the Nasdaq Stock Market. The OTCQB and OTCBB are often characterized by low trading volume and significant price fluctuations. These and other factors may further impair our stockholdersCompany’s ~~ability to sell their shares when they want to and/or could depress our stock price. As a result~~business, ~~stockholders may find it difficult to dispose of~~operations, ~~or obtain accurate quotations of the price~~liquidity, offinancial ~~our~~results ~~securities because smaller quantities of shares could be bought~~ and ~~sold,~~stock ~~transactions could be delayed and security analyst and news coverage of our Company may be limited~~price. ~~These factors could result in lower prices and larger spreads in the bid and ask prices for our shares of common stock.~~

~~Applicable~~Our ~~SEC~~business ~~rules~~depends ~~governing~~on ~~the~~consumer ~~trading~~discretionary ofspending, ~~“penny stocks” may limit the trading~~ and ~~liquidity of~~ our ~~common~~results ~~stock~~are ~~which~~highly ~~may~~dependent ~~affect the~~on ~~trading price our common stock~~U.S. ~~Our~~consumer ~~common~~confidence ~~stock~~and isthe ~~a “penny stock” as defined under Rule 3a51-1~~ health of the ~~Exchange Act,~~U.S. ~~and~~economy. isConsumer ~~accordingly~~spending ~~subject~~may tobe ~~SEC~~affected ~~rules~~by ~~and~~many ~~regulations~~factors ~~that~~outside ~~impose~~of ~~limitations upon~~ the ~~manner~~Company’s incontrol, ~~which~~including ~~our~~general ~~common stock can be~~economic ~~publicly~~conditions; ~~traded.~~consumer ~~Penny~~disposable ~~stocks~~income; ~~generally~~consumer ~~are~~confidence ~~equity~~and ~~securities~~perception ~~with a per share price~~ of ~~less~~economic ~~than~~conditions; ~~$5.00~~the ~~(other~~threat ~~than~~or ~~securities~~outbreak ~~registered on~~of ~~some~~war, ~~national securities exchanges~~ terrorism or ~~quoted~~public onunrest ~~NASDAQ).~~(including, ~~The~~without ~~penny stock rules require a broker-dealer~~limitation, ~~prior~~the toconflicts ~~a transaction~~ in a ~~penny~~Ukraine ~~stock~~and ~~not otherwise exempt from~~ the ~~rules,~~Middle toEast) ~~deliver~~which amay ~~standardized~~cause ~~risk~~supply ~~disclosure~~chain ~~document that provides information about~~disruptions, ~~penny~~increase ~~stocks~~fuel costs and ~~the~~transportation ~~nature~~costs, and ~~level~~create ofgeneral ~~risks~~economic ininstability; ~~the~~wage ~~penny~~and ~~stock~~unemployment ~~market.~~levels; ~~The~~consumer ~~broker-dealer~~debt ~~also~~and inflationary ~~must~~pressures; ~~provide~~ the ~~customer~~costs ~~with~~of ~~current bid~~basic necessities and ~~offer~~other ~~quotations~~goods; ~~for~~effects ~~the penny stock, the compensation~~ of ~~the~~weather ~~broker-dealer~~ and ~~its~~natural ~~salesperson~~disasters incaused ~~the~~by ~~transaction,~~climate ~~and, if the~~change ~~broker-dealer~~or isotherwise; ~~the~~and ~~sole~~epidemics, ~~market~~contagious ~~maker~~disease outbreaks, ~~the~~and ~~broker-dealer~~other ~~must~~public ~~disclose~~health ~~this~~concerns ~~fact~~including ~~and~~ the ~~broker~~COVID-~~dealer’s~~19 ~~presumed~~pandemic. ~~control over~~Adverse ~~the~~economic ~~market,~~changes ~~and~~in ~~monthly~~any ~~account~~of ~~statements showing~~ the ~~market~~regions ~~value of each penny stock held~~ in ~~the~~which ~~customer’s~~we ~~account. In addition, broker-dealers who~~ sell ~~these~~our ~~securities~~products tocould ~~persons~~reduce ~~other~~consumer ~~than~~confidence ~~established customers~~ and ~~“accredited~~could ~~investors”~~negatively ~~must~~affect ~~make~~net arevenue ~~special~~and ~~written~~have ~~determination that the penny stock is~~ a ~~suitable~~material ~~investment~~adverse ~~for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the~~ effect ofon ~~reducing the level of trading activity, if any, of~~ our ~~common~~operating ~~stock and reducing the liquidity of an investment in our common stock~~results.

WeConsumers ~~have~~may ~~outstanding~~view ~~shares~~a substantial portion of ~~preferred~~the ~~stock~~products ~~with~~we ~~rights~~offer ~~and~~as ~~preferences~~discretionary ~~superior~~items torather ~~those~~than ofnecessities. As a result, our ~~common~~results ~~stock~~of operations are sensitive to changes in macro-economic conditions that impact consumer spending, including discretionary spending. ~~The~~Decreases ~~issued~~in ~~and~~consumer ~~outstanding~~discretionary ~~shares~~spending ofmay ~~Series~~result Ain ~~Convertible~~a ~~Preferred~~decrease ~~Stock~~in ~~and~~comparable ~~Series~~sales, Band ~~Preferred~~average ~~Stock~~value ~~grant~~per ~~the~~transaction, ~~holders~~which ofmight ~~such~~cause ~~preferred~~us ~~stock~~to ~~liquidation~~increase ~~rights~~promotional ~~that~~activities, ~~are~~which ~~superior~~will tohave ~~those~~a ~~held~~negative byimpact ~~the~~on ~~holders~~our gross margins, all of ~~our~~which ~~common~~could negatively affect the Company’s business, operations, liquidity, financial results and stock price, particularly if consumer spending levels are depressed for a prolonged period of time.

WeIf ~~have~~we ~~not~~fail ~~paid dividends in the past and do not expect~~ to ~~pay~~manage ~~dividends~~our ingrowth ~~the~~effectively, ~~future.~~we ~~Any return on investment~~ may beexperience ~~limited~~difficulties toin ~~the value~~expanding of our ~~common~~operations ~~stock.~~and Weservice ~~have~~offerings ~~never paid cash dividends on our common stock~~ and ~~do not anticipate doing so in the foreseeable future. The payment of dividends on~~ our ~~common stock depends on earnings~~business, financial condition and ~~other~~operating ~~business~~results ~~and~~could ~~economic~~be ~~factors affecting us at such time as our board of directors may consider relevant~~harmed.

In order to develop and grow our business, we will require significant resources to commence operations and scale our business in a cost-effective manner. Failure to obtain these resources may negatively affect our ability to access the marketplace and grow our business. We will also be required to manage relationships with a growing number of suppliers, third party manufacturers, customers and other third parties. We may also be required to effectively integrate, develop and motivate a large number of new employees. Our information technology systems and our internal controls and procedures may not be adequate to support our growth. If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially adversely affected.

Our success depends, in substantial part, on our ability to market our products through search engines and social media platforms.

The marketing of our products depends on our ability to cultivate and maintain cost-effective and otherwise satisfactory relationships with search engines and social media platforms, including those operated by Google, Facebook, Bing and Yahoo! These platforms could change their terms and conditions of use at any time (and without notice) and/or significantly increase their fees. No assurances can be provided that we will be able to maintain cost-effective and otherwise satisfactory relationships with these platforms and our inability to do so in the case of one or more of these platforms could have a material adverse effect on our business, financial condition and results of operations.

The growing use of online ad-blocking software may also impact the success of our marketing efforts because we may reach a smaller audience and fail to bring more customers to our website, which could have a material adverse effect on our business, financial condition and results of operations.

Our internal information technology systems may fail or suffer security breaches, loss or leakage of data, and other disruptions, which could disrupt our business or result in the loss of critical and confidential information.

The satisfactory performance, reliability and availability of our website, transaction processing systems, logistics network, and technology infrastructure will be critical to our reputation and our ability to acquire and retain customers, as well as maintain adequate customer service levels.

For example, if one of our data centers fails or suffers an interruption or degradation of services, we could lose customer data and miss order fulfillment deadlines, which could harm our business. Our systems and operations, including our ability to fulfill customer orders through our logistics network, could also be vulnerable to damage or interruption from inclement weather, fire, flood, power loss, telecommunications failure, terrorist attacks, labor disputes, cybersecurity-attacks, data loss, acts of war, break-ins, earthquake and similar events. In the event of a data center failure, the failover to a back-up could take substantial time, during which time our site could be completely shut down. Further, our back-up services may not effectively process spikes in demand, may process transactions more slowly and may not support all of our site’s functionality.

We intend to use proprietary software in our technology infrastructure, which we will need to continually update and improve. We may not always be successful in executing these upgrades and improvements, and the operation of our systems may be subject to failure. In particular, we may experience slowdowns or interruptions on some or all of our sites when we are updating them, and new technologies or infrastructures may not be fully integrated with existing systems on a timely basis, or at all. Additionally, if we expand our use of third-party services, including cloud-based services, our technology infrastructure may be subject to increased risk of slowdown or interruption as a result of integration with such services and/or failures by such third parties, which are out of our control. Our net revenue will depend on the number of visitors who shop on our site and the volume of orders we can handle. Unavailability of our website or reduced order fulfillment performance would reduce the volume of goods sold and could also materially adversely affect consumer perception of our brand.

We may experience periodic system interruptions from time to time. In addition, continued growth in our transaction volume, as well as surges in online traffic and orders associated with promotional activities or seasonal trends in our business, place additional demands on our technology platform and could cause or exacerbate slowdowns or interruptions. Any slowdown, interruption or performance failure of our site and the underlying technology and logistics infrastructure could harm our business, reputation and our ability to acquire, retain and serve our customers, which could materially adversely affect our results of operations.

If we fail to maintain adequate cybersecurity with respect to our systems and ensure that our third-party service providers do the same with respect to their systems, our business may be harmed.

We intend to collect, maintain, transmit and store data about our customers, employees, contractors, suppliers, vendors and others, including credit card information and personally identifiable information, as well as other confidential and proprietary information. We also may employ third-party service providers that store, process and transmit certain proprietary, personal and confidential information on our behalf. We may rely on encryption and authentication technology licensed from third parties in an effort to securely transmit, encrypt, anonymize or pseudonymize certain confidential and sensitive information, including credit card numbers. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction and personal data or other confidential and sensitive information from being breached or compromised. Our security measures, and those of our third-party service providers, may not detect or prevent all attempts to hack our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, cybersecurity breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our sites, networks and systems or that we or our third-party service providers otherwise maintain, including payment card systems and human resources management platforms. We and our service providers may not anticipate or prevent all types of attacks until after they have already been launched, and techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers. In addition, security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by persons with whom we have commercial relationships.

Breaches of our security measures or those of our third-party service providers or cyber security incidents could result in unauthorized access to our sites, networks and systems; unauthorized access to and misappropriation of personal information, including consumers’ and employees’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; limited or terminated access to certain payment methods or fines, penalties, assessments or higher transaction fees to use such methods; viruses, worms, spyware or other malware being served from our site, networks or systems; deletion or modification of content or the display of unauthorized content on our site; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment or training of additional personnel and protection technologies, responses to governmental investigations and media inquiries and coverage; engagement of third party experts and consultants; litigation, regulatory action and other potential liabilities. If any of these breaches of security occur, and/or our cybersecurity processes, procedures or policies are found to be deficient, our reputation and brand could be damaged, our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such breaches and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. In addition, any party who is able to illicitly obtain a customer’s password or other relevant information could access that customer’s transaction data or personal information. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data security and other laws, and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition and operating results. We may need to devote significant resources to protect against cybersecurity breaches or to address problems caused by breaches, diverting resources from the growth and expansion of our business.

We may choose to rely upon manufacturers based in outside the United States, including China, and their operations are subject to risks associated with business operations in those countries. Any disruption in the ability of these manufacturers to supply us with our products on a timely basis could have a material adverse effect on our business, results of operations or financial condition.

Our current plan is to manufacture the Hypha Micropearl bioreactor outside the United States to reduce manufacturing costs. Although we have not yet identified a manufacturer for our products, nor have we entered into an arrangement with any entity in a foreign country to manufacture our products, we may decide to manufacture the bioreactor in mainland China. The Chinese government or any foreign government in a country where we choose to manufacture our products may intervene or influence the operations of a business located in that country, especially China, or the industry in which a business operates at any time, which could result in a material change to the operations of any manufacturer in such country. Foreign countries where we choose to manufacture may be subject to political instability and dramatic changes in economic policies. For example, policies of the Chinese government can have significant effects on the economic conditions of China and industries within China. The Chinese government has confirmed that economic development will follow the model of a market economy. Under this direction, we believe that China will continue to strengthen its economic and trading relationships with foreign countries and business development in China will follow market forces. While we believe that this trend will continue, we cannot assure you that this will be the case. Changes in policies, regulations, rules, and the enforcement of laws by a foreign government may produce quick shifts in policy with little advance notice that could adversely affect our interests by interfering with the operations of manufacturers and/or suppliers we choose to rely upon. Although the Chinese government has been pursuing economic reform policies for more than two decades, we cannot assure you that the government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting China’s political, economic, and social environment.

We will depend on our relationships with a variety of regional and national carriers, and changes in our relationships with these parties could adversely affect our revenue and profits.

We will rely on a variety of regional and national carriers for our shipping services. As a result, we may be subject to shipping delays or disruptions caused by factors beyond our and our carriers’ control, including inclement weather, natural disasters, system interruptions and technology failures, labor shortages, increased fuel costs, health epidemics or bioterrorism. We are also subject to risks of breakage or other damage during delivery by any of these third parties.

We may rely on a limited number of suppliers, or in some cases, a single supplier, for some of the components of our Hypha Micropearl bioreactor, such as the cartridges, and may not be able to find replacements or immediately transition to alternative suppliers

We intend to source components, such as the cartridges, for the Hypha Micropearl bioreactor from third parties. Our failure to maintain continued supply of such components, or supply that meets quality control requirements, particularly in the case of sole suppliers, would seriously harm our business, financial condition, and results of operations. In the event of any adverse developments with these vendors, our product supply may be interrupted, and obtaining substitute components could be difficult or require us to re-design our products. If the supply of components we receive from suppliers does not meet quality control standards, we may not be able to use the components, or if we use them not knowing that they are of inadequate quality, it may prevent our products from working properly or at all.

We may be unable to develop, optimize, operate and manage our fulfillment centers

We intend to engage a third party to handle fulfillment of our products from its fulfillment centers. If we are unable to secure, optimize and operate fulfillment centers successfully and efficiently, it could result in excess or insufficient fulfillment capacity, an increase in costs or impairment charges or harm our business in other ways. In addition, if we do not have sufficient fulfillment capacity or experience a problem fulfilling orders in a timely manner, our customers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our customers. For example, challenges such as another pandemic could cause us to experience disruptions to the operations of our fulfillment centers, including an insufficient and strained labor pool from time to time, which may negatively impact our ability to fulfill orders in a timely manner, which could harm our reputation, relationship with customers and results of operations. Failure to successfully address such challenges in a cost-effective and expedient manner could impair our ability to timely deliver our customers’ purchases and could harm our reputation and ultimately, our business, financial condition, and results of operations.

Significant merchandise returns could harm our business.

We intend to allow our customers to return products, subject to our return policy. If merchandise returns are significant, our business, prospects, financial condition and results of operations could be harmed. Further, we may modify our policies relating to returns from time to time, which could result in customer dissatisfaction or an increase in the number of product returns. From time to time, our products may be damaged in transit, which can increase return rates and harm our brand.

We are subject to risks related to online payment methods.

We intend to accept payments using a variety of methods, including credit card, debit card, PayPal, credit accounts and gift cards. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We are also subject to payment card association operating rules and certification requirements, including the current and future Payment Card Industry Data Security Standard (“PCI”) and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply, including in connection with any possible payment card data breach. As our business changes, we may also be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines, penalties, assessments or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card and debit card payments from consumers or to facilitate other types of online payments.

Our plans are dependent upon key individuals and the ability to attract qualified personnel.

In order to execute our business plan, we will be dependent upon our executive officers and directors, as well as other key personnel. The loss of any of the foregoing individuals could have a material adverse effect upon our business prospects. Moreover, our success continues to depend to a significant extent on our ability to identify, attract, hire, train and retain qualified professional, creative, technical and managerial personnel. Competition for such personnel is intense, and there can be no assurance that we will be successful in identifying, attracting, hiring, training, and retaining such personnel in the future. If we are unable to hire, assimilate and retain such qualified personnel in the future, our business, operating results, and financial condition could be materially adversely affected. We may also depend on third party contractors and other partners, to assist with the execution of our business plan. There can be no assurance that we will be successful in either attracting and retaining qualified personnel, or creating arrangements with such third parties. The failure to succeed in these endeavors would have a material adverse effect on our ability to consummate our business plans.

If the market for our products does not develop or become sustainable, or becomes saturated, our revenues may fail to materialize, and our financial condition and results of operations could be materially impaired.

The global market for functional mushrooms is projected to experience significant growth over the next eight years and the functional mushroom market in the U.S. is expected to grow significantly as well. The increasing popularity and acceptance of mushroom products among individuals creates an opportunity for us to enter this industry and provide a new and innovative way for consumers to have access to mushroom products. However, although we believe that providing consumers with a convenient home device to make functional mushrooms which can be incorporated into their food and beverage is a novel and innovative concept, there can be no assurance that consumers will purchase our products. Our success is highly dependent on both the market’s acceptance of functional mushrooms as well as the adoption of the use of our home device by the consumer. If the market for our products does not materialize, become sustainable, or becomes saturated with competing products, our revenues may not materialize, and our financial condition and results of operations could be materially and adversely affected.

We compete against various companies engaged in the mushroom industry, some of which have greater brand recognition, longer operating histories and greater financial resources.

We compete against various companies engaged in the mushroom industry. The increasing popularity and acceptance of mushroom based products has led to the rapid development of new and innovative products in the mushroom industry. Thus, manufacturers in the mushroom industry, owing to these rapid advancements, are constantly working on innovative formulations and delivery methods to make mushroom products more palatable and convenient for consumers. These manufacturers are focusing on expanding their global presence by adopting strategies such as investing in joint ventures, partnerships, mergers and acquisitions and research and development in innovative product lines.

Although we do not believe there are any other companies developing a bioreactor device to produce functional mushrooms in the home, we do believe that there is ongoing research into the medical properties and applications of various mushroom species for personal care and pharmaceuticals which continues to promote the development of new functional mushroom-based products. For instance, in August 2023, Four Sigmatic, a wellness products manufacturing company, launched organic mushroom complex capsules in Calm, Focus, and Memory varieties. These capsules contain lion’s mane mushroom extract, vitamin B12, and L-theanine. Mushroom Perfecti, a company focused on the production of mushroom based products from mycelium, is producing a line of nutritional supplements, Nature’s Rise, a manufacturer of organic mushroom products, launched Lion’s Mane organic powder extract on Amazon in October 2022 and Lifeway Foods, Inc., a US supplier of Kefir and fermented probiotic products, launched a new line of adaptogenic medical mushrooms beverages at the Winter Fancy Food Show in Las Vegas in February 2022. In August 2023 Applied Food Sciences Inc. (“AFS”), one of the leaders in supplying functional and organic ingredients, announced its equity investment and partnership with KAAPA Biotech, a Finland based company. This partnership would help AFS expand its botanical portfolio by adding Nordic grown medical mushroom extracts that could be used in food, beverages and supplements. These companies represent the availability of alternative sources of functional mushrooms offered to consumers.

Further, advancements in biotechnology and mycology have enabled researchers to explore novel cultivation techniques, optimize growing conditions, thereby enhancing the production of bioactive compounds in mushrooms. In May 2023, Optimi Health Corp., a Canadian-based company, opened a new mushroom research and development facility. The new facility consists of two 10,000-square-feet facilities with ten growing rooms producing approximately 2,000 kilograms of dried psilocybin mushrooms a month. Thus, the global functional mushroom market share is anticipated to exhibit a promising growth rate in a competitive marketplace.

Risks Relating to Intellectual Property

If we are unable to protect our intellectual property rights, our business, competitive position, financial condition and results of operations could be materially and adversely affected.

Our success is dependent in part on our ability to obtain patent protection in the United States and abroad for our technology. We have filed two patent applications that safeguard the use of sophisticated machine learning algorithms to process mycelium, the vegetative part of fungi composed of an intricate network of hyphae. We have filed for patent protection in the United States. We believe that our ability to obtain patent protection in key markets for our technology is essential for maintaining our competitive edge. Failure to do so may impact our ability to experience broad acceptance in the marketplace for our products over those of our competitors, therefore reducing our ability to generate revenues and grow our business. Further, failure to obtain patent protection for our products will limit our ability to pursue damages for infringement of our proprietary rights against third parties. There can be no assurances any of our pending or future patent applications will be approved, or that we develop additional products or processes that are patentable.

Third parties may seek to challenge, invalidate, circumvent, render unenforceable, or seek ownership of any patents or proprietary rights owned by us. There can be no assurance that we will operate without infringing on the proprietary rights of third parties. If such challenges are successful, we may be unable to use or may need to limit the scope of our methods and technologies.

Our employees, consultants and advisors will enter into confidentiality agreements with us that prohibit the disclosure or use of our confidential information. We will also have entered into non-disclosure or confidentiality agreements to protect our confidential information delivered to third parties for research and other purposes. Despite these efforts, we cannot guarantee that we will be able to effectively enforce these agreements, or our confidential information will not be disclosed, that others will not independently develop substantially equivalent confidential information and techniques or otherwise gain access to our confidential information or that we can meaningfully protect our confidential information. Furthermore, any know-how that is proprietary or particular to our technologies may be subject to risk of disclosure by employees or consultants despite having confidentiality agreements in place.

If we are unable to protect our brand, including our trademarks, our business can be materially and adversely effected.

Our success is dependent in part on our ability to protect our brand and the trademarks we use to sell our products. We are currently using the trademark Micropearls with respect to our bioreactor device and intend to introduce this product into the marketplace with this trademark. Although we have not registered this trademark, our use and claim to the name protects us from third parties using it for similar products, although third parties may still infringe our trademark. Any infringement of our trademark by third parties can lead to consumer confusion and any unauthorized use of a similar mark can make it challenging for consumers to distinguish between our brand and the infringing party. This confusion can erode the trust and loyalty that our customers may develop over time. Further, if an infringing party utilizes our brand’s trademark to sell subpar or counterfeit products, the quality associated with our brand can suffer. Consumers who encounter these inferior offerings may associate the negative experience with our brand, resulting in a tarnished reputation. It will be crucial for us to maintain control over our trademark to protect the positive association customers have with our brand. Trademark infringement can lead to lost business opportunities, as unauthorized parties may exploit our brand’s reputation and market presence for their gain. Such loss of opportunities can have long-lasting effects on our brand’s growth and profitability.

Trademark infringement can also result in legal disputes, which can be time-consuming and expensive to resolve. Third parties may seek to challenge our use of their trademarks. Engaging in legal battles to protect or defend our trademarks can strain business relationships, including those with customers, partners, or distributors. Moreover, if the infringement remains unresolved, it may signal a lack of control over our brand, leading to further damage to our reputation. Trademark infringement poses significant risks to our brand’s reputation and can have detrimental effects on our business.

Risks Related To Our Common Stock

Our operating results may fluctuate causing volatility in our stock price.

Our operating results may fluctuate as a result of a number of factors, many of which are outside of our control. The following factors may affect our operating results causing volatility in our stock price:

●

Our ability to execute our business plan, compete effectively and attract customers;

	●	Our ability to respond effectively to a rapidly evolving regulatory and competitive landscape;
	●	The amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business, operations and infrastructure;
	●	Our ability to obtain working capital financing;
	●	Our ability to attract, motivate and retain top-quality employees;
	●	Investors’ general perception of us; and
	●	General economic conditions and those economic conditions specific to the cannabis industry.

Trading in our common stock has been limited, there is no significant trading market for our common stock, and purchasers of our common stock may be unable to sell their shares.

Our common stock is currently eligible for quotation on the OTCQB and OTCBB, however trading to date has been limited. If activity in the market for shares of our common stock does not increase, purchasers of our shares may find it difficult to sell their shares. We currently do not meet the initial listing criteria for any registered securities exchange, including the Nasdaq Stock Market. The OTCQB and OTCBB are often characterized by low trading volume and significant price fluctuations. These and other factors may further impair our stockholders’ ability to sell their shares when they want to and/or could depress our stock price. As a result, stockholders may find it difficult to dispose of, or obtain accurate quotations of the price, of our securities because smaller quantities of shares could be bought and sold, transactions could be delayed and security analyst and news coverage of our Company may be limited. These factors could result in lower prices and larger spreads in the bid and ask prices for our shares of common stock.

Applicable SEC rules governing the trading of “penny stocks” may limit the trading and liquidity of our common stock which may affect the trading price our common stock.

Our common stock is a “penny stock” as defined under Rule 3a51-1 of the Exchange Act, and is accordingly subject to SEC rules and regulations that impose limitations upon the manner in which our common stock can be publicly traded. Penny stocks generally are equity securities with a per share price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on NASDAQ). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, of our common stock and reducing the liquidity of an investment in our common stock.

We have outstanding shares of preferred stock with rights and preferences superior to those of our common stock.

The issued and outstanding shares of Series A Convertible Preferred Stock and Series B Preferred Stock grant the holders of such preferred stock liquidation rights that are superior to those held by the holders of our common stock.

We have outstanding shares of Series C Preferred stock held by our sole executive officer that will enable him to control a majority of the total voting power of the Company.

We have designated 1,000 shares of Series C Preferred stock that provides the holder, so long as he or she is an executive officer of the Company, with the ability to vote with the holders of our common stock on all matters presented to the holders of common stock, on the basis of 200,000 votes for each share of Series C Preferred stock. All of the shares of Series C Preferred stock are currently held by A. Stone Douglass, our sole executive officer. Accordingly, Mr. Douglass has the right to vote a majority of the total voting power of all outstanding shares of our capital stock. Consequently, other stockholders will exercise little influence over management and policies of the Company.

We plan to increase the amount of authorized shares of our common stock and our preferred stock.

Our board of directors and the holder of a majority of the voting power of the Company’s voting stock have approved an amendment to the Company’s Articles of Incorporation, as amended, to increase the authorized number of shares of the Company’s common stock from 250,000,000 to 880,000,000 shares and the authorized number of shares of the Company’s preferred stock from 10,000,000 to 70,000,000, which would become effective upon the filing of the amendment with the Secretary of State of the State of Nevada. The charter amendment was filed on January 13, 2025. The increase in authorized common stock and preferred stock will not have any immediate effect on the rights of existing stockholders, but it would have a dilutive effect on our existing stockholders when the additional shares are issued. This increase in the authorized number of shares of common stock and preferred stock and the subsequent issuance of such shares could have the effect of delaying or preventing a change in control of the Company without further action by the Company’s stockholders. Management’s use of additional shares of capital stock to resist or frustrate a third-party transaction favored by a majority of the independent stockholders would likely result in an above-market premium being paid in that transaction. Any such issuance of the additional shares of common stock and preferred stock would likely have the effect of diluting the earnings per share and book value per share of outstanding shares of the Company’s common stock and preferred stock, respectively, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company.

Upon such increase in the authorized shares of preferred stock, the Company will have 62,499,000 shares of preferred stock that remains undesignated. The Company’s Articles of Incorporation, as amended, allow our board of directors to authorize the issuance of shares of preferred stock without any vote or further action by the Company’s stockholders. Our board of directors has the authority to not only issue additional shares of the Series A Preferred stock, Series B Preferred stock or Series C Preferred stock, but also has the authority, from time to time, to provide by resolution for the issuance of shares of preferred stock in one or more series, not exceeding the aggregate number of shares of preferred stock authorized by the Company’s Articles of Incorporation, as amended, and to prescribe with respect to each such series the voting powers, if any, designations, preferences, and relative, participating, optional, or other special rights, and the qualifications, limitations, or restrictions relating thereto. The Company does not anticipate that it would seek authorization from the stockholders for issuance of any additional authorized shares of common stock or preferred stock, unless required by applicable law or regulations.

We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common stock depends on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 1C. CYBERSECURITY

~~Not~~As ~~Applicable~~of the date of this Form 10-K, we believe that we have limited risks associated with a breach in cybersecurity. Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents (of which we are not aware of any), have not materially affected or are not reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.

Risk Management and Strategy

We have not established specific processes for assessing, identifying, and managing material risks from cybersecurity threats or engaged third parties to assess such risks. However, if exposed to such a risk, we would assess any potential unauthorized attempts to access our information systems that may result in adverse effects on the confidentiality, integrity, or availability of those systems.

While we lack a formal risk assessment policy or analysis and no process has been integrated into our management system, a risk assessment would likely include identification of any reasonably foreseeable internal and external risks, any likelihood and potential damage that could result from such risks, and whether existing safeguards are sufficient to manage such risks. If appropriate and necessary, we would implement reasonable safeguards to minimize identified risks and address any identified gaps in existing systems.

To date, we have not encountered cybersecurity threats or challenges that have materially impaired our operations, business strategy or financial condition.

Governance

Primary responsibility for assessing any cybersecurity risks rests with A. Stone Douglass, our sole executive officer, who would report any threat to our board of directors.

ITEM 2. Properties

Our principal executive offices are located at ~~6450~~5940 ~~Cameron~~S. ~~Street,~~Rainbow ~~Suite 113~~Boulevard, Las Vegas, Nevada 89118, Telephone No.: (702) 527-2060. Our leased premises are 6,000 square feet and are utilized for corporate business offices and a cannabis testing lab. Our premises are subject to a lease agreement expiring August 31, 2025. 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:

2024		123,543
2025		116,891
2026		-
2027		-
Total	$	240,434

We believe that our current facilities are adequate for our current needs. We intend to secure new facilities or expand existing facilities as necessary to support future growth. We believe that suitable additional space will be available on commercially reasonable terms as needed to accommodate our operations.

ITEM 3. Legal Proceedings

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 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Shares of our common stock trade on the over-the-counter market and are quoted on the OTCBB and OTCQB under the symbol “~~DIGP~~FUNI”. As of January 1210, ~~2024~~2025, the closing price of our common stock on the OTCQB was $0.04026.

The following table sets forth, for the fiscal quarters indicated, the high and low bid information for our common stock, as reported on the OTCQB. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

	High		Low
Fiscal Year Ended September 30, 2022
First Quarter	$	0.04	$	0.3
Second Quarter	$	0.04	$	0.02
Third Quarter	$	0.28	$	0.11
Fourth Quarter	$	0.02	$	0.01
Fiscal Year Ended September 30, 2023
First Quarter	$	0.015	$	0.006
Second Quarter	$	0.008	$	0.006
Third Quarter	$	0.008	$	0.001
Fourth Quarter	$	0.027	$	0.003
Fiscal Year Ended September 30, 2024
First Quarter	$	0.045	$	0.006
Second Quarter	$	0.070	$	0.010
Third Quarter	$	0.040	$	0.012
Fourth Quarter	$	0.060	$	0.007

As of January 1613, ~~2024~~2025, there were approximately ~~122~~ 135 shareholders of record of our common stock. Such number does not include any shareholders holding shares in nominee or “street name”. As of January 1613, ~~2024~~2025, there were 87126,~~096~~546,~~820~~825 shares of common stock outstanding on record.

Dividends

We have not declared or paid any dividends on our common stock since our inception and do not anticipate paying dividends for the foreseeable future. The payment of dividends is subject to the discretion of our board of directors and depends, among other things, upon our earnings, our capital requirements, our financial condition, and other relevant factors. We intend to reinvest any earnings in the development and expansion of our business. Any cash dividends in the future to common shareholders will be payable when, as and if declared by our board of directors, based upon the board’s assessment of our financial condition and performance, earnings, need for funds, capital requirements, prior claims of preferred stock to the extent issued and outstanding, and other factors, including income tax consequences, restrictions and applicable laws. There can be no assurance, therefore, that any dividends on our common stock will ever be paid.

~~Equity Compensation Plan Information as of September 30, 2023~~16

Equity Compensation Plan Information as of September 30, 2024

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

(a)

(b)

(c)

Equity compensation plans approved by security holders ⁽¹⁾

6,020,000

0.069

N/A

Equity compensation plans not approved by security holders ⁽²⁾

17,487,050

0.015

N/A

Total

23,507,050

N/A

(1) Represents awards under our 2012 Stock Incentive Plan which was initially adopted with shareholder approval, and amended on June 21, 2016 without shareholder approval (as amended, the “2012 Incentive Plan”). Below is a brief description of the material terms of the 2012 Incentive Plan and the awards that ~~may~~were be granted thereunder.

⁽²⁾Consists of options and warrants issued to consultants of the Company in consideration of services with exercise prices between $0.05 and $0.10 per share. For additional details see Note 11 to the accompanying financial statements.

2012 Incentive Plan

Effective Date and Expiration. The 2012 Incentive Plan, as amended, became effective on March 5, 2012, and terminated on March 5, 2022. No award may be made under the Incentive Plan after its expiration date, but awards made prior thereto may extend beyond that date. No additional awards will be granted under the 2012 Incentive Plan.

Share Authorization. The maximum aggregate number of shares which may be issued pursuant to awards granted under the 2012 Incentive Plan, as amended in June 2016, is Eleven Million Five Hundred Thousand (11,500,000) shares. Prior to its amendment ~~in June 2016~~, Three Million shares had ~~been~~ been authorized for issuance under the 2012 Plan. As of ~~January~~September 1230, 2024, options to purchase 6,020,000 shares were issued and outstanding under the 2012 Plan.

General; Types of Awards. The 2012 Incentive Plan provides for the grant of options to purchase shares of common stock, restricted stock, stock appreciation rights (“SARs”) and restricted stock units (rights to receive, in cash or stock, the market value of one share of our commons stock). Incentive stock options (“ISOs”) may be granted only to employees. Nonstatutory stock options and other stock-based awards may be granted to officers, employees, non-employee directors and consultants.

Administration. The 2012 Incentive Plan is administered by our board of directors or a committee of our board of directors (the “Administrator”) as provided in the 2012 Incentive Plan. The Administrator will have the authority to select the eligible participants to whom awards will be granted, to determine the types of awards and the number of shares covered and to set the terms, conditions and provisions of such awards, to cancel or suspend awards under certain conditions, and to accelerate the exercisability of awards. The Administrator will be authorized to interpret the 2012 Incentive Plan, to establish, amend, and rescind any rules and regulations relating to the 2012 Incentive Plan, to determine the terms of agreements entered into with recipients under the 2012 Incentive Plan, and to make all other determinations that may be necessary or advisable for the administration of the 2012 Incentive Plan.

Eligibility. Options and other awards may be granted under the 2012 Incentive Plan to directors, officers, employees and consultants of our company and any of our subsidiaries, provided that the services of such consultants are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for our securities.

Stock Options. The exercise price per share of our common stock purchasable upon exercise of any stock option or SAR will be determined by the Administrator, but cannot in any event be less than 100% of the fair market value of our common stock on the date the award is granted. The Administrator will determine the term of each stock option or SAR (subject to a maximum term of 10 years) and each option or SAR will be exercisable pursuant to a vesting schedule determined by the Administrator. The grants and the terms of ISOs will be restricted to the extent required for qualification as ISOs by the U.S. Internal Revenue Code of 1986, as amended. Subject to approval of the Administrator, options or SARs may be exercised by payment of the exercise price in cash, shares of common stock or pursuant to a “cashless exercise” through a broker-dealer under an arrangement approved by the Administrator. The Administrator may require the grantee to pay to us any applicable withholding taxes that we are required to withhold with respect to the grant or exercise of any option. The withholding tax may be paid in cash or, subject to applicable law, the Administrator may permit the grantee to satisfy these obligations by the withholding or delivery of shares of our common stock. We may withhold from any shares of our common stock that may be issued pursuant to an option or from any cash amounts otherwise due from us to the recipient of the option an amount equal to such taxes.

Restricted Stock. Restricted shares may be sold or awarded for consideration determined by the Administrator, including cash, full-recourse promissory notes, as well as past and future services. Any award of restricted shares will be subject to a vesting schedule determined by the Administrator. Any restricted shares that are not vested will be subject to rights of repurchase, rights of first refusal or other restrictions as determined by the Administrator. In general, holders of restricted shares will have the same voting, dividend and other rights as our other stockholders.

Adjustments upon Changes in Capitalization. In the event of any change affecting shares of our common stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distribution to stockholders other than cash dividends, the Administrator will make substitutions or adjustments in the aggregate number of shares that may be distributed under the 2012 Incentive Plan, and in the number and types of shares subject to, and the exercise prices under, outstanding awards granted under the 2012 Incentive Plan, in accordance with Section 10 and other provisions of the 2012 Incentive Plan.

Assignment. Unless otherwise permitted by the 2012 Incentive Plan and approved by the Administrator as permitted by the 2012 Incentive Plan, no award will be assignable or otherwise transferable by the grantee other than by will or the laws of descent and distribution and, during the grantee’s lifetime, an award may be exercised only by the grantee.

Recent Sales of Unregistered Securities

~~None~~On July 3, 2024, we issued 2,000,000 shares of our common stock to an outside consultant. The shares were valued at the closing price on the date of issuance for a value of $31,200. The issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

On August 19, 2024, we issued 8,333,335 shares of our common stock to outside consultants. The shares were valued at the closing price on the date of issuance for an aggregate value of $165,000. The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

On November 15, 2024, the Company issued 3,000,000 shares of common stock to a consultant for services rendered. The shares were valued using the closing stock price on the date of issuance for a value of $57,000. The issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

On December 10, 2024, we sold 1,000 shares of our Series C Preferred stock to Mr. Douglass for a purchase price of $0.10 per share, in a transaction exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) thereof.

On December 18, 2024, the Company issued 500,000 shares of common stock to a consultant for services rendered. The shares were valued using the closing stock price on the date of issuance for a value of $10,000. The issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company and its subsidiaries for the fiscal years ended September 30, ~~2023~~2024 and ~~2022~~2023. The discussion and analysis that follows should be read together with the section entitled “Forward Looking Statements” and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.

Overview

Hypha Labs, Inc. (formerly Digipath, Inc.) was incorporated in Nevada on October 5, 2010. ~~Digipath,~~Until ~~Inc.~~February ~~and~~20, ~~its subsidiaries (“Digipath~~2024,” the “Company,” was a service-oriented ~~“we~~independent testing laboratory,” ~~“our”~~data oranalytics ~~“us”)~~and ~~support~~media firm focused on the developing cannabis and hemp markets, and supported the cannabis industry’s best practices for reliable testing, cannabis education and training~~, and brings unbiased cannabis news coverage to the cannabis industry~~. Our mission iswas to provide pharmaceutical-grade analysis and testing to the cannabis industry, under ISO-17025:2017 guidelines, to ensure consumers and patients ~~know~~knew exactly what iswas in the cannabis they ingest and to help maximize the quality of our clients’ products through research, development, and standardization. ~~Digipath~~Hypha ~~has~~Labs had been operating a cannabis-testing lab in Nevada ~~serving Nevada~~ since 2015.

On February 20, 2024, we completed the sale of the net assets of our subsidiary Digipath Labs. As of that date we were no longer in 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.

Critical Accounting Policies

The establishment and consistent application of accounting policies is a vital component of accurately and fairly presenting our financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”), as well as ensuring compliance with applicable laws and regulations governing financial reporting. While there are rarely alternative methods or rules from which to select in establishing accounting and financial reporting policies, proper application often involves significant judgment regarding a given set of facts and circumstances and a complex series of decisions.

Fair Value of Financial Instruments

The Company adopted 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:

	-	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 are estimated by management to approximate fair value primarily due to the short term nature of the instruments.

Fixed Assets

Fixed assets are stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:

Software		3 years
Office equipment		5 years
Furniture and fixtures		5 years
Lab equipment		7 years
Leasehold improvements		Term of lease

Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations.

Impairment of Long-Lived Assets

Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations.

Our intellectual property is comprised of indefinite-lived brand names acquired and have been assigned an indefinite life as we currently anticipate that these brand names will contribute cash flows to the Company perpetually. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.

Revenue Recognition

Effective October 1, 2018, the Company adopted ASC 606 - Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 - Revenue Recognition. Under ASC 605, revenue was recognized when the following criteria had been met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

Our revenue iswas primarily generated through our subsidiary, Digipath Labs, ~~Inc.,~~ which ~~recognizes~~recognized revenue from the analytical testing of cannabis products for licensed producers and cultivators within the state of Nevada on a determinable fixed fee per test, or panel of tests, basis. Revenue from the performance of those services iswas recognized upon completion of the tests, at which time test results ~~are~~were delivered to to the customer, provided collectability of the fee is reasonably assured. We typically ~~require~~required payment within thirty days of the delivery of results.

During the years ended September 30, 2024 and 2023, all revenues are classified as part of Net income from discontinued operations in the accompanying consolidated statement of operations.

Discontinued Operations

On April 20, 2023, the Company and Digipath Labs entered into an Asset Purchase Agreement (the “Purchase Agreement”) with DPL NV, LLC (“Buyer”), pursuant to which Digipath Labs ~~has~~ agreed to sell substantially all of its assets to Buyer for a cash ~~purchase~~ purchase price of $2,300,000 (the “Purchase Price”). The business of an entity that is in the process of disposing of its assets by sale, or that intends to cease operations, is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. As such, the Company’s lab testing business is is now reported as discontinued operations.

13Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of September 30, 2024 and 2023. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations as net income from discontinued operations for the years ended September 30, 2024 and 2023. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Consolidated Statements of Cash Flows for the years ended September 30, 2024 and 2023.

Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of September 30, 2023 and 2022. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations as net income from discontinued operations for the years ended September 30, 2023 and 2022. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Consolidated Statements of Cash Flows for the years ended September 30, 2023 and 2022.

Amounts presented in discontinued operations have been derived from our consolidated financial statements and accounting records using the historical basis of assets, liabilities, results of operations, and cash flows of Digipath Labs. The discontinued operations exclude general corporate allocations.

Advertising Costs

The Company expenses the cost of advertising and promotions as incurred. Advertising and promotions expense was $419,~~444~~930 and $584,~~739~~444 for the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively.

Basic and Diluted Loss Per Share

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 Equity-Based Payments to Non-employees 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.

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.

Results of Operations

The following table shows operating results for the years ended September 30, ~~2023~~2024 and ~~2022~~2023.

	Years Ended September 30,						Increase /
	2023			2022			(Decrease)
	2024			2023			(Decrease)
Revenues	$	-		$	-		$	-
Cost of sales		-			-			-
Gross profit		-			-			-
Operating expenses:
General and administrative		~~103~~943,~~298~~691			~~495~~103,~~762~~298			~~(392~~840,~~464~~393	)
Professional fees		~~334~~883,~~090~~336			~~654~~334,~~703~~090			~~(320~~549,~~613~~246	)
Total operating expenses:		~~437~~1,~~388~~827,027			1437,~~150,465~~388			~~(713~~1,~~077~~389,639	)
Operating loss		(~~437~~1,~~388~~820,767	)		(1437,~~150,465~~388	)		~~713~~1,~~077~~358,657
Total other income (expense)		~~(244~~470,~~267~~631	)		(1244,~~027,086~~267	)		~~(782~~654,~~819~~898	)
Net loss		(681,655	)		(2,177,551	)		1,495,895
Net loss from continuing operations before income taxes		(1,356,396	)		(681,655	)		(674,741	)
Net income (loss) from discontinued operations		928,429			120,433			807,997
Income tax expense		(14,189	)		-			(14,189	)
Net income (loss)	$	246,775		$	(2,057,118	)	$	2,303,893
Net loss from continuing operations		(1,370,585	)		(681,655	)		(688,930	)
Net income from discontinued operations		585,156			928,429			(343,273	)
Net income (loss)	$	(785,429	)	$	246,775		$	(1,032,203	)

General and Administrative Expenses

General and administrative expenses for the year ended September 30, ~~2023~~2024 were $~~103~~943,~~298~~691, compared to $~~495~~103,~~762~~298 during the year ended September 30, ~~2022~~2023, aan ~~decrease~~increase of $~~392~~840,~~464~~393, or 79814%. The expenses consisted primarily of salaries and wages and included $37733,~~162~~748 and $~~384~~37,~~884 of~~162 of non-cash stock-based compensation for the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively. General and administrative expenses ~~decreased~~increased primarily due to ~~decreased~~increased corporate overhead activities and stock-based compensation with officers and consultants.

Professional Fees

Professional fees for the year ended September 30, ~~2023~~2024 were $~~334~~883,~~090~~336, compared to $~~654~~334,~~703~~090 during the year ended September 30, ~~2022~~2023, aan ~~decrease of~~increase of $~~320~~549,~~613~~246, or 49164%. Professional fees included non-cash, stock-based compensation of $~~21,992~~0 and $~~181~~21,~~349~~992 during the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively. Professional fees ~~decreased~~increased primarily due to ~~decreased stock-based compensation and~~ corporate consulting services during the current period as we ~~decreased~~increased our focus on ~~expansion~~developing ~~efforts~~our new business.

Operating Loss

Operating loss for the year ended September 30, ~~2023~~2024 was $~~437~~1,~~388~~827,027, compared to $1437,~~150,465~~388 during the year ended September 30, ~~2022~~2023, aan ~~decrease~~increase of $~~713~~1,~~077~~389,639, or 62318%. Operating loss ~~decreased~~increased primarily due to ~~decreased~~increased general and administrative and professional fees, during ~~the~~ the year ended September 30, ~~2023~~2024, compared to the year ended September 30, ~~2022~~2023.

Other Income (Expense)

Other ~~expense~~income, on a net basis, for the year ended September 30, ~~2023~~2024 was $~~244~~470,~~267~~631, compared to other expense of $1244,~~027,086~~267 during the year ~~ended~~ ended September 30, ~~2022~~2023, aan ~~decrease~~increase of $~~782~~714,~~819~~898. Other ~~expense~~income during the year ended September 30, ~~2023~~2024 consisted of $~~364~~201,~~267~~769 of interest expense and anloss ~~other~~on ~~expense~~extinguishment of debt of $55956,~~000~~494 offset by the recovery of previously written off receivables of $~~175~~66,000 and a gain on the sale of subsidiary net assets of $1,548,998. Other expense during the year ended September 30, ~~2022~~2023 consisted of $~~244~~364,~~586~~ 267 of interest expense and aother ~~credit~~expense ~~loss~~of $55,000 offset by the recovery of previously written off receivables of $~~782~~175,~~500~~000.

Liquidity and Capital Resources

As of September 30, ~~2023~~2024, the Company had current assets of $~~765~~410,~~798~~190, comprising of cash of $~~271~~91,~~006~~166, other current assets of $8289,~~570~~024, and ~~assets~~ ~~held~~deferred ~~for~~offering ~~sale~~costs ~~-current~~ of $~~486~~30,~~222~~000. The Company’s current liabilities as of September 30, ~~2023~~2024 were $31,~~121~~393,~~814~~660, consisting of $~~122~~86,~~094~~348 of accounts payable, $~~228~~166,~~491~~989 of accrued expenses, $1225,~~390~~923 of accrued expenses – related parties, ~~the~~ current maturities of ~~convertible notes~~lease ~~payable~~ liabilities of $136,~~385~~428,~~932,~~ and the current maturities of convertible notes payable ~~– related parties~~ of $~~339~~1,~~252 and the current maturities of notes payable in the amount of $665~~078,~~000, and Liabilities held for sale of $368,655~~235.

The following table summarizes our total current assets, liabilities and working capital at September 30, ~~2023~~2024 and ~~2022~~2023.

	September 30,
	2023			2022
	2024			2023
Current Assets	$	~~765~~410,~~798~~190		$	~~562~~765,~~104~~798
Current Liabilities	$	31,~~121~~393,~~814~~660		$	23,~~953~~121,~~909~~814
Working Capital	$	(2983,~~356,016~~470	)	$	(2,~~391~~356,~~805~~016	)

The following table summarizes our cash flows during the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively.

	Years Ended
	September 30,
	2023			2022
	2024			2023
Net cash provided by (used in) operating activities	$	~~112~~(1,~~525~~033,875	)	$	~~(184~~112,~~786~~525	)
Net cash provided by (used in) investing activities		263,333			(660,371	)
Net cash provided by investing activities		2,145,784			263,333
Net cash provided by (used in) financing activities		(161,020	)		605,393
Net cash (used in) financing activities		(1,291,749	)		(161,020	)
Net change in cash	$	~~214~~(179,~~838~~840	)	$	~~(239~~214,~~764~~838	)

16Net Cash Provided by (Used in) Operating Activities

~~Net~~During ~~Cash~~the ~~Provided~~year Byended ~~(Used~~September 30, 2024, net cash used in) ~~Operating~~operating ~~Activities~~activities was $1,033,875, compared to net cash provided by operating activities of $112,525 for the same period ended September 30, 2023, including cash provided by operating activities from discontinued operations of $358,576 for the year ended September 30, 2024 compared to cash provided by operating activities from discontinued operations of $727,393 for the year ended September 30, 2023. The increase in cash used in operating activities was primarily attributable to our increase in net loss and accounts receivable, along with decreases in accounts payable and accrued expenses.

~~During~~Net ~~the~~Cash ~~year~~Provided ~~ended September 30, 2023, net cash provided~~ by ~~operating~~Investing activities was $112,525, compared to net cash used in operating activities of $184,786 for the same period ended September 30, 2022, including cash provided by operating activities from discontinued operations of $727,393 for the year ended September 30, 2023 compared to cash provided by operating activities from discontinued operations of $277,095 for the year ended September 30, 2022. The decrease in cash used in operating activities was primarily attributable to our decrease in net loss and accounts receivable, along with increases in accounts payable and accrued expenses.Activities

~~Net~~During ~~Cash~~the ~~Provided~~year Byended ~~(Used~~September 30, 2024, net cash provided by investing activities was $2,134,117, compared to $263,333 provided by investing activities for the same period ended September 30, 2023, including cash used in) ~~Investing~~investing ~~Activities~~activities from discontinued operations of $0 for the year ended September 30, 2024 compared to cash used in investing activities from discontinued operations of $11,667 for the year ended September 30, 2023. The cash provided by investing activities in the current period was a result of the sale of subsidiary net assets compared to cash used in investing activities for the prior period which was a result of the sale of the collateralized assets from the note receivable.

~~During~~Net ~~the~~Cash ~~year~~(Used ~~ended September 30, 2023, net cash provided by investing activities was $263,333, compared to $660,371 used~~ in) ~~investing~~Financing activities for the same period ended September 30, 2022, including cash used in investing activities from discontinued operations of $11,667 for the year ended September 30, 2023 compared to cash used in investing activities from discontinued operations of $17,722 for the year ended September 30, 2022. The cash provided by investing activities in the current period was a result of the sale of the collateralized assets from the note receivable compared to cash used in investing activities for the prior period which was a result of loans we made in connection with a potential acquisition that did not close.Activities

~~Net~~During ~~Cash~~the ~~Provided~~year byended ~~(Used~~September 30, 2024, net cash used in) ~~Financing~~financing ~~Activities~~activities was $1,291,749, compared to net cash used in financing activities of $161,020 for the same period ended September 30, 2023, including cash used in financing activities from discontinued operations of $15,784 for the year ended September 30, 2024 compared to cash used in financing activities from discontinued operations of $60,920 for the year ended September 30, 2023. The current period consisted of $595,965 of repayments on notes payable, $650,000 of repayments on convertible notes payable and $30,000 in payments of deferred offering costs, compared to $100,000 of repayments on notes payable and the repurchase of Series C Preferred stock in the comparative period in the prior year.

During the year ended September 30, 2023, net cash used in financing activities was $161,020, compared to net cash provided by financing activities of $605,393 for the same period ended September 30, 2022, including cash used in financing activities from discontinued operations of $60,920 for the year ended September 30, 2023 compared to cash used in financing activities from discontinued operations of $77,972 for the year ended September 30, 2022. The current period consisted of $60,920 of principal payments on an equipment loan, $100,000 of repayments on notes payable, and repurchase of the Preferred C stock, compared to $265,000 of proceeds received on debt financing, proceeds of $402,765 received on convertible debt financing proceeds of $55,600 from the sale of preferred stock, as offset by $20,379 of principal payments on an equipment lease and $57,593 of principal payments on an equipment loan and $40,000 of principal payments made on convertible notes in the comparative period in the prior year.24

Satisfaction of our Cash Obligations for the Next 12 Months

As of September 30, ~~2023~~2024, our balance of cash on hand was $~~271~~91,~~006~~166. We do not currently have sufficient funds to fund our operations at ~~their~~ their current levels for the next twelve months. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to achieve sustainable revenues and profitable operations. Since inception, we have raised funds primarily through the sale of equity securities. We will need additional funds to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations or cause substantial dilution for our stockholders. If we are unable to obtain additional funds, our ability to carry out and implement our planned business objectives and strategies will be significantly delayed, limited or may not occur. We cannot guarantee that we will become profitable. Even if we achieve profitability, given the competitive and evolving nature of the industry in which we operate, we may not be able to sustain or increase profitability and our failure to do so would adversely affect our business, including our ability to raise additional funds.

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.

Smaller Reporting Company

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As a smaller reporting company, we may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Exchange Act reports and have reduced disclosure obligations regarding executive compensation. \

Plan of Operations

Over the next 12 months, the Company plans to continue product design and development of its Micropearl bioreactor, with the goal of commercializing the bioreactor device by the end of calendar year 2025. Initially, the Company will produce a limited number of bioreactors at its headquarters for testing purposes, both with mycologists and experts in the functional mushroom industry. Based on the success of this testing, the Company will then seek to enter into an arrangement with a contract manufacturer to begin commercial production of the bioreactor units. The Company’s goal is to be in the position to market the Micropearl bioreactor for commercial sale by the end of calendar year 2025, although there can be no assurance it will achieve its goal in this time period, or at all.

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 potential Regulation A offering, following such 12- month period to successfully execute its business plan.

Trend Information

The Company is still in the product design and development phase for the Micropearl bioreactor. It anticipates finalizing product design and development in the next few months, with the goal of moving into beta testing of the device by the end of the second calendar quarter 2025, and then into production for commercial sale sometime at the end of calendar year 2025. There can be no assurance the Company will be able to meet the timeline proposed.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 8. Financial Statements and Supplementary Data

HYPHA LABS, INC. (FORMERLY DIGIPATH, INC.) & SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, ~~2023~~2024 AND ~~2022~~2023

TABLE OF CONTENTS

	Page	~~Page~~
Report of Independent Registered Public Accounting Firm, Fruci & Associates II, PLLC (PCAOB ID:5525)	27	~~F-1~~
Report of Independent Registered Public Accounting Firm, M&K CPAS, PLLC (PCAOB ID:2738)		F-2
Consolidated Balance Sheets as of September 30, 2024 and 2023	28
Consolidated Balance Sheets as of September 30, 2023 and 2022		F-3
Consolidated Statements of Operations for the years ended September 30, 2024 and 2023	29
Consolidated Statements of Operations for the years ended September 30, 2023 and 2022		F-4
Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended September 30, 2024 and 2023	30
Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended September 30, 2023 and 2022		F-5
Consolidated Statements of Cash Flows for the years ended September 30, 2024 and 2023	31
Consolidated Statements of Cash Flows for the years ended September 30, 2023 and 2022		F-6
Notes to Consolidated Financial Statements	32
Notes to Consolidated Financial Statements		F-7

1826

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and ~~Stockholders~~Shareholders of ~~Digipath~~Hypha Labs, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of ~~Digipath~~Hypha Labs, Inc. (“the Company”) as of September 30, 2024 and 2023, and the related consolidated statements of operations, ~~changes in~~ stockholders’ equity (deficit), and cash flows for each of the years in the two-year ~~then~~ period ended September 30, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year ~~then~~period ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit, ~~recurring~~net losses, ~~from operations~~ and ~~has~~believes cash on hand ~~that~~is ~~may~~ not be sufficient to sustain ~~its~~ operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Discontinued Operations and Assets Held for Sale

As reflected in the Company’s consolidated financial statements, the Company has a subsidiary with business operations that are presented as discontinued operations due to a pending sale to a third party, with total assets held for sale of approximately $1.13 million and total liabilities held for sale of approximately $0.53 million. As discussed in Note 1, the Company has evaluated its disposal group as discontinued operations. Auditing management’s analysis on the valuation and presentation of its assets held for sale involved complexity and judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures to evaluate management’s analysis on the valuation and presentation of assets held for sale included, among other things, the following:

● We obtained an understanding of the Company’s process for evaluating discontinued operations and underlying assets held for sale. ● We assessed the relevance and reliability of the data utilized in performing the analysis, including review of underlying agreements and documentation for evidence that assets are held for sale. ● We assessed the presentation and valuation in accordance with generally accepted accounting principles.

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2023.

Spokane, Washington

January 16, 2024

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Digipath, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Digipath, Inc. (“the Company”) as of September 30, 2022, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the year ended September 30, 2022, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022, and the results of its operations and its cash flows for the year ended September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses from operations and insufficient working capital, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit ~~Matter~~Matters

~~The~~Critical ~~critical~~ audit ~~matter~~matters ~~communicated~~are ~~below~~matters ~~is a matter~~ arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. ~~The~~We ~~communication~~determined ofthat ~~the~~there ~~critical~~were ~~audit~~no ~~matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the~~ critical audit ~~matter~~ ~~below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate~~matters.

~~Black Scholes~~Fruci ~~Calculations~~& Associates II, PLLC – PCAOB ID #05525 We have served as the Company’s auditor since 2023. Spokane, Washington January 13, 2025

~~As discussed in Note 10 of the consolidated financial statements, the Company utilizes Black Scholes calculations to determine fair value of the Company’s stock compensation.~~27

~~Auditing~~HYPHA ~~management’s~~LABS, ~~calculations~~INC. of(FORMERLY ~~fair~~DIGIPATH, ~~value of stock options involves significant judgements and estimates to determine the proper value~~INC. ~~Volatility~~) ~~and~~AND ~~term are the major assumptions used by management in determining the value of the stock options.~~SUBSIDIARIES

To evaluate the appropriateness of the fair value calculation, we evaluated management’s significant judgements and estimates in what inputs were utilized within the Black Scholes calculations.

/s/ M&K CPAS, PLLC (PCAOB ID:2738) We have served as the Company’s auditor since 2017. Houston, Texas January 17, 2023 except for Note 1 (Discontinued Operations), 3, 6, 7, 8 and 14, as to which the date is January 16, 2024

F-2

DIGIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2023			September 30, 2022
	September 30, 2024			September 30, 2023
Assets
Current assets:
Cash	$	~~271~~91,~~006~~166		$	56271,~~168~~006
Note receivable		-			~~100,000~~-
Other current assets		8289,~~570~~024			128,~~739~~570
Assets held for sale - current		486,222			393,197
Deferred offering costs		30,000			-
Total current assets		765,798			562,104
Assets held for sale - current		-			486,222
Fixed assets, net		-			55,000
Total current assets		410,190			765,798
Assets held for sale – long term		643,666			722,784
Fixed assets, net		26,609			-
Total non-current assets		643,666			777,784
Right-of-use asset		57,006			-
Total Assets	$	1,409,464		$	1,339,888
Assets held for sale – long term		-			643,666
Total non-current assets		83,615			643,666
Total Assets	$	493,805		$	1,409,464
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	~~122~~86,~~094~~348		$	~~200~~122,~~558~~094
Accrued expenses		~~328~~166,~~491~~726			~~219~~328,~~797~~491
Accrued expenses – related party		1225,~~390~~923			~~192~~12,~~811~~390
Current maturities of notes payable		565,000			665,000
Accrued expenses		25,923			12,390
Current maturities of convertible notes payable, net of discounts		1,385,932			1,198,469
Current maturities of notes payable		-			565,000
Current maturities of convertible notes payable related parties, net of discounts		339,252			-
Current maturities of convertible notes payable, net of discounts		1,078,235			1,385,932
Liabilities held for sale - current		368,655			477,274
Current maturities of convertible notes payable related parties, net of discounts		-			339,252
Total current liabilities		3,121,814			2,953,909
Current maturities of convertible notes payable		-			339,252
Lease liabilities - current		36,428			-
Liabilities held for sale - current		-			368,655
Total current liabilities		1,393,660			3,121,814
Non-current liabilities:
Convertible notes payable related parties, net of discounts		-			310,272
Lease liabilities – long term		26,838			-
Convertible notes payable, net of discounts and current maturities		-			174,726
Liabilities held for sale – long term		-			159,156
Liabilities held for sale – long term		159,156			310,253
Total non-current liabilities		26,838			159,156
Total non-current liabilities		159,156			795,251
Total Liabilities		1,420,498			3,280,970
Total Liabilities		3,280,970			3,749,160
Commitments and contingent liabilities		-			-
Series B convertible preferred stock, $0.001 par value, 1,500,000 shares authorized; 333,600 shares issued and outstanding as of September 30, 2023 and 2022		333,600			333,600
Series B convertible preferred stock, $0.001 par value, 1,500,000 shares authorized; 333,600 shares issued and outstanding as of September 30, 2024 and 2023		333,600			333,600
Stockholders’ Deficit:
Series A convertible preferred stock, $0.001 par value, 6,000,000 shares authorized; 1,047,942 shares issued and outstanding as of September 30, 2023 and 2022		1,048			1,048
Series A convertible preferred stock, $0.001 par value, 6,000,000 shares authorized; 1,047,942 shares issued and outstanding as of September 30, 2024 and 2023		1,048			1,048
Series C convertible preferred stock, $0.001 par value, 1,000 shares authorized; 0 and 1,000 shares issued and outstanding as of September 30, 2023 and 2022, respectively		-			1
Series C convertible preferred stock, $0.001 par value, 1,000 shares authorized; no shares issued and outstanding as of September 30, 2024 and 2023, respectively		-			-
Preferred stock value
Preferred stock, value		-			-
Common stock, $0.001 par value, 250,000,000 shares authorized; 87,096,820 and 75,146,820 shares issued and outstanding at September 30, 2023 and 2022, respectively		87,097			75,147
Common stock, $0.001 par value, 250,000,000 shares authorized; 123,046,825 and 87,096,820 shares issued and outstanding as of September 30, 2024 and 2023, respectively		123,046			87,097
Common stock payable		-			71,745
Additional paid-in capital		19,163,039			17,468,746
Additional paid-in capital		17,468,746			17,117,958
Accumulated deficit		(20,547,426	)		(19,761,997	)
Accumulated deficit		(19,761,997	)		(20,008,771	)
Total Stockholders’ Deficit		(1,260,293	)		(2,205,106	)
Total Stockholders’ Deficit		(2,205,106	)		(2,742,872	)
Total Liabilities and Stockholders’ Deficit	$	493,805		$	1,409,464
Total Liabilities and Stockholders’ Deficit	$	1,409,464		$	1,339,888

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

~~F-3~~28

HYPHA LABS, INC. (FORMERLY DIGIPATH, INC.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	2024			2023
	For the Years Ended
	September 30,
	2023			2022
	2024			2023
Revenues	$	-		$	-
Cost of sales		-			-
Gross profit		-			-
Operating expenses:
General and administrative		~~103~~943,~~298~~691			~~495~~103,~~762~~298
Professional fees		~~334~~883,~~090~~336			~~654~~334,~~703~~090
Total operating expenses		~~437~~1,~~388~~827,027			1437,~~150,465~~388
Operating loss		(~~437~~1,~~388~~827,027	)		(1437,~~150,465~~388	)
Other income (expense):
Interest expense		(~~364~~201,~~267~~769	)		(~~244~~364,~~586~~267	)
Other expense		(55,000	)		-
Other income (expense)		13,896			(55,000	)
Recovery of previously written off receivables		~~175~~66,000			-175,000
Credit loss		-			(782,500	)
Loss on extinguishment of debt		(956,494	)		-
Total other income (expense)		(244,267	)		(1,027,086	)
Gain on sale of subsidiary assets		1,548,998			-
Net loss from continuing operations		(681,655	)		(2,177,551	)
Total other income (expense)		470,631			(244,267	)
Net income (loss) from discontinued operations		928,429			120,433
Net loss from continuing operations before income taxes		(1,356,396	)		(681,655	)
Net income (loss)		246,774			(2,057,118	)
Income tax expense		(14,189	)		-
Preferred deemed dividend		-			(192,154	)
Net loss from continuing operations		(1,370,585	)		(681,655	)
Net income (loss) to common shareholders	$	246,774		$	(2,249,272	)
Net income (loss) from discontinued operations		585,156			928,429
Net loss per share from continuing operations - basic and fully diluted	$	(0.01	)	$	(0.03	)
Net income (loss)		(785,429	)		246,774
Net income per share from discontinued operations - basic and fully diluted	$	0.01		$	0.00
Net loss per share from continuing operations - basic and fully diluted	$	(0.01	)	$	(0.01	)
Net loss per share basic and fully diluted	$	(0.00	)	$	(0.03	)
Net income per share from discontinued operations - basic and fully diluted	$	0.01		$	0.01
Weighted average number of common shares outstanding - basic and fully diluted		83,925,450			74,173,304
Net loss per share basic and fully diluted	$	(0.01	)	$	(0.00	)
Weighted average number of common shares outstanding - basic and fully diluted		101,348,643			83,925,450

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

~~F-4~~29

HYPHA LABS, INC. (FORMERLY DIGIPATH, INC.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

	Shares		Amount		Shares			Amount			Shares			Amount			Shares		Amount		Payable			Capital			Deficit			Deficit
	Series B Convertible				Series A Convertible						Series C													Additional						Total
	Series B Convertible Preferred Stock				Series A Convertible Preferred Stock						Series C Preferred Stock						Common Stock				Stock			Additional Paid-in			Accumulated			Total Stockholders’
	Preferred Stock				Preferred Stock						Preferred Stock						Common Stock				Stock			Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount			Shares			Amount			Shares		Amount		Payable			Capital			Deficit			Deficit
Balance, September 30, 2021		-	$	-		1,325,942		$	1,326			-		$	-			71,230,153	$	71,230	$	-		$	16,825,765		$	(17,951,653	)	$	(1,053,332	)
Balance, September 30, 2022		333,600	$	333,600		1,047,942		$	1,048			1,000		$	1			75,146,820	$	75,147	$	71,745		$	17,117,958		$	(20,008,771	)	$	(2,742,872	)
Purchase of Series B Preferred shares		55,600		55,600		-			-			-			-			-		-		-			-			-			-
Conversion of Series A Preferred into Series B Preferred		278,000		278,000		(278,000	)		(278	)		-			-			-		-		-			(85,568	)		-			(85,846	)
Issuance of Preferred C Shares		-		-		-			-			1,000			1			-		-		-			360,299			-			360,300
Common stock issued for settlement of accounts payable		-		-		-			-			-			-			250,000		250		-			7,250			-			7,500
Common stock issued for services		-		-		-			-			-			-			3,666,667		3,667		-			139,833			-			143,500
Common shares to be issued for debt discount		-		-		-			-			-			-			-		-		71,745			-			-			71,745
Stock-based compensation		-		-		-			-			-			-			-		-		-			62,533			-			62,533
Deemed dividend on preferred exchange		-		-		-			-			-			-			-		-		-			(192,154	)					(192,154	)
Net loss		-		-		-			-			-			-			-		-		-			-			(2,057,118	)		(2,057,118	)
Balance, September 30, 2022		333,600		333,600		1,047,942			1,048			1,000			1			75,146,820		75,147		71,745			17,117,958			(20,008,771	)		(2,742,872	)
Balance		333,600	$	333,600		1,047,942			1,048			1,000			1			75,146,820		75,147		71,745			17,117,958			(20,008,771	)		(2,742,872	)
Repurchase of Series C Preferred shares		-		-		-			-			(1,000	)		(1	)		-		-		-			(99	)		-			(100	)
Common stock issued for settlement of stock payable		-		-		-			-			-			-			7,150,000		7,150		(71,745	)		64,595			-			-
Common stock issued for compensation		-		-		-			-			-			-			4,800,000		4,800		-			29,880			-			34,680
Warrants issued for debt financing costs		-		-		-			-			-			-			-		-		-			93,938			-			93,938
Stock-based compensation		-		-		-			-			-			-			-		-		-			24,474			-			24,474
Forgiveness of accrued director compensation		-		-		-			-			-			-			-		-		-			138,000						138,000
Net income		-		-		-			-			-			-			-		-		-			-			246,774			246,774
Net Income		-		-		-			-			-			-			-		-		-			-			246,774			246,774
Net income (loss)		-		-		-			-			-			-			-		-		-			-			246,774			246,774
Balance, September 30, 2023		333,600		333,600		1,047,942			1,048			-			-			87,096,820		87,097		-			17,468,746			(19,761,997	)		(2,205,106
Balance, September 30, 2023		333,600	$	333,600		1,047,942		$	1,048			-		$	-			87,096,820	$	87,097	$	-		$	17,468,746		$	(19,761,997	)	$	(2,205,106	)
Balance		333,600		333,600		1,047,942			1,048			-			-			87,096,820		87,097		-			17,468,746			(19,761,997	)		(2,205,106
Balance		333,600	$	333,600		1,047,942		$	1,048			-		$	-			87,096,820	$	87,097	$	-		$	17,468,746		$	(19,761,997	)	$	(2,205,106	)
Shares issued for conversion of notes payable		-		-		-			-									4,000,000		4,000		-			36,000			-			40,000
Stock-based compensation		-		-		-			-			-			-			31,950,005		31,949		-			701,799			-			733,748
Forgiveness of accrued director compensation		-		-		-			-			-			-			-		-		-			956,494			-			956,494
Net loss		-		-		-			-			-			-			-		-		-			-			(785,429	)		(785,429	)
Net income (loss)		-		-		-			-			-			-			-		-		-			-			(785,429	)		(785,429	)
Balance, September 30, 2024		333,600	$	333,600		1,047,942		$	1,048			-		$	-			123,046,825	$	123,046	$	-		$	19,163,039		$	(20,547,426	)	$	(1,260,293	)
Balance		333,600	$	333,600		1,047,942		$	1,048			-		$	-			123,046,825	$	123,046	$	-		$	19,163,039		$	(20,547,426	)	$	(1,260,293	)

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

~~F-5~~30

HYPHA LABS, INC. (FORMERLY DIGIPATH, INC.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2024			2023
	For the Years Ended
	September 30,
	2023			2022
	2024			2023
Cash flows from operating activities
Net loss from continuing operations	$	(~~681~~1,~~655~~370,585	)	$	(2681,~~177,551~~655	)
Adjustments to reconcile net loss to net cash used in operating activities:
Recovery of previously written off receivables		~~(175,000~~-	)		-(175,000	)
Credit loss		-			782,500
Depreciation expense		1,046
Stock-based compensation		59,154			566,233
Gain on sale of subsidiary assets		(1,548,998	)		-
Amortization of debt discounts		135,655			85,166
Stock-based compensation		733,748			59,154
Impairment of fixed assets		55,000			-
Amortization of debt discounts		43,050			135,655
Impairment of fixed assets		-			55,000
Amortization of right-of-use asset		17,569			-
Loss on debt extinguishment		956,494			-
Decrease (increase) in assets:
Other current assets		4(60,~~169~~454	)		~~(813~~4,169	)
Increase (decrease) in liabilities:
Accounts payable		(7830,~~465~~321	)		77(78,~~601~~465	)
Accrued expenses		~~108~~(136,~~694~~224	)		54108,~~172~~694
Accrued expenses – related parties		~~(42~~13,~~421~~533	)		~~150~~(42,~~811~~421	)
Net cash (used in) operating activities from continuing operations		(614,869	)		(461,881	)
Lease liability		(11,309	)		-
Net cash provided by operating activities from discontinued operations		727,394			277,095
Net cash (used in) operating activities from continuing operations		(1,392,451	)		(614,869	)
Net cash provided by (used in) operating activities		112,525			(184,786	)
Net cash provided by operating activities from discontinued operations		358,576			727,394
Net cash provided by (used in) operating activities		(1,033,875	)		112,525	)
Cash flows from investing activities
Advance of note receivable		-			(817,649	)
Purchase of fixed assets		(27,655	)		-
Proceeds from sale of collateralized assets		275,000			175,000
Proceeds from sale of subsidiary net assets		2,173,439			-
Net cash (used) in investing activities from continuing operations		275,000			(642,649	)
Proceeds from sale of collateralized assets		-			275,000
Net cash (used) in investing activities from discontinued operations		(11,667	)		(17,722	)
Net cash (used) in investing activities from continuing operations		2,145,784			275,000
Net cash (used) in investing activities		263,333			(660,371	)
Net cash (used) in investing activities from discontinued operations		-			(11,667	)
Net cash (used) in investing activities		2,145,784			263,333
Cash flows from financing activities
Proceeds from notes payable		-			390,000
Repayments of notes payable		(595,965	)		(100,000	)
Repayments of notes payable		(100,000	)		(125,000	)
Repayments on convertible notes		(650,000	)		-
Proceeds from convertible notes		-			402,765
Payments of deferred offering costs		(30,000	)		-
Repayments on convertible notes		-			(40,000	)
Repurchase of Series C Preferred stock		-			(100	)
Proceeds from sale of preferred stock		-			55,600
Net cash provided by (used in) financing activities		(1,275,965	)		(100,100	)
Repurchase of preferred C stock		(100	)		-
Net cash used in financing activities from discontinued operations		(15,784	)		(60,920	)
Net cash provided by (used in) financing activities		(~~100~~1,~~100~~291,749	)		~~683~~(161,~~365~~020	)
Net cash used in financing activities from discontinued operations		(60,920	)		(77,972	)
Net increase (decrease) in cash		(179,840	)		214,838
Net cash provided by (used in) financing activities		(161,020	)		605,393
Cash - beginning		271,006			56,168
Net increase (decrease) in cash		214,838			(239,764	)
Cash - ending	$	91,166		$	271,006
Cash - beginning		56,168			295,932
Cash - ending	$	271,006		$	56,168
Supplemental disclosures:
Interest paid	$	~~227~~266,~~691~~533		$	~~113~~227,~~817~~691
Income taxes paid		-			-
Non-cash investing and financing activities:
Common stock issued for settlement of payables	$	-		$	7,500
Addition of accounts payable and accrued interest into note payable	$	30,965		$	-
Conversion of Series A preferred into Series B preferred	$	-		$	85,846
Common stock issued for conversion of note payable	$	40,000		$	-
Deemed dividend on preferred exchange	$	-		$	192,154
Initial right-of-use asset valuation	$	74,575		$	-
Subscription receivable for Series C preferred stock	$	-		$	100
Common stock issued for settlement of stock payable	$	-		$	71,745
Stock payable issued for debt discounts on convertible notes payable	$	-		$	71,745
Transfer of completed assets	$	-		$	6,076
Common stock issued for settlement of stock payable	$	71,745		$	-
Warrants issued for debt financing	$	-		$	93,938
Transfer of completed assets	$	6,076		$	-
Common stock issued for settlement of related party accrued compensation	$	-		$	138,000
Warrants issued for debt financing	$	93,938		$	-
Common stock issued for settlement of related party accrued compensation	$	138,000		$	-

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

~~F-6~~31

~~DIGIPATH,~~HYPHA LABS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

Hypha Labs, Inc. (formerly Digipath, Inc.) was incorporated in Nevada on October 5, 2010. ~~Digipath~~Until February 20, 2024, Hypha Labs, Inc. and its subsidiaries (“~~Digipath~~Hypha,” the “Company,” “we,” “our” or “us”) iswas a service-oriented independent testing laboratory, ~~and~~ data analytics ~~company~~ and media firm focused on the developing cannabis and hemp markets, and ~~supports~~supported the cannabis industry’s best practices for reliable testing, cannabis education and training. Our mission iswas to provide pharmaceutical-grade analysis and testing to the cannabis industry, under ISO-17025:2017 guidelines, to ensure consumers and patients ~~know~~knew exactly what is was in the cannabis they ingest and to help maximize the quality of our clients’ products through research, development, and standardization. Hypha ~~Digipath~~Labs ~~has~~had been operating a cannabis-testing lab in Nevada ~~serving Nevada~~ since 2015.

On February 20, 2024, we completed the sale of the net assets of our subsidiary Digipath Labs, Inc. (“Digipath Labs”). As of that date we were no longer in 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.

Basis of Accounting

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). Intercompany accounts and transactions have been eliminated. All references to Generally Accepted Accounting Principles (“GAAP”) are in accordance with The FASB Accounting Standards Codification (“ASC”) and the Hierarchy of Generally Accepted Accounting Principles.

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 September 30, ~~2023~~2024:

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

(1)	Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by ~~Digipath~~Hypha Labs, Inc., the parent company.
(2)	Formed during the second fiscal quarter of 2021, but has not yet commenced significant operations ~~and has no significant assets~~.
(3)	Formed during the first fiscal quarter of 2019, but has not yet commenced significant operations ~~and has no significant assets~~.
(4)	Acquired on March 11, 2020.

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”, “~~Digipath~~Hypha” or “DIGP”. The Company’s headquarters are located in Las Vegas, Nevada and substantially all of its customers ~~are~~were within the United States.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for a fair presentation of the information contained therein.

~~F-7~~32

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Fair Value of Financial Instruments

The Company adopted 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:

	-	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.

Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for ~~collectability~~ collectability based on past credit history with customers and their current financial condition. The Company had an allowance for doubtful accounts of $~~154,179~~0 and $~~139~~154,~~279~~179 as of September 30, ~~2023~~2024 and ~~2022~~2023, respectively. As of September 30, ~~2023 and 2022~~2024, ~~Accounts~~accounts receivable are classified as Assets held for sale – current in the accompanying consolidated balance sheet.

Notes Receivable

Notes receivable are reported in our consolidated balance sheets at the outstanding principal balance, plus costs incurred to originate the loans, net of any unamortized premiums or discounts on purchased loans. We use the effective interest rate method to recognize finance income, which produces a constant periodic rate of return on the investment. Unearned income, discounts and premiums are amortized to finance income in our consolidated statements of operations using the effective interest rate method. Interest receivable related to the unpaid principal is recorded together with the outstanding balance in our consolidated balance sheets. Upon the prepayment of a note receivable, any prepayment penalties and unamortized loan origination, closing and commitment fees are recorded as part of finance income in our consolidated statements of operations.

Notes receivable are periodically evaluated for collectability based on past credit history with note holders and their current financial condition. The Company had an allowance for credit losses of $~~720~~670,000 and $~~931~~720,~~665~~000 as of September 30, ~~2023~~2024 and ~~2022~~2023, respectively.

Fixed Assets

Software			3 years
Office equipment			5 years
Furniture and fixtures			5 years
Lab equipment			7 years
Leasehold improvements			Term of lease

F-8

As of September 30, ~~2023~~2024, all fixed assets balances are classified as Assets held for sale – long term in the accompanying consolidated balance sheet.

Impairment of Long-Lived Assets

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606 - Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

AsDuring the ofyears ended September 30, ~~2023~~2024 and ~~2022~~2023, all revenues are classified as part of Net income from discontinued operations in in the accompanying consolidated statement of operations.

Discontinued Operations

On April 20, 2023, the Company and Digipath Labs entered into an Asset Purchase Agreement (the “Purchase Agreement”) with DPL NV, LLC (“Buyer”), pursuant to which Digipath Labs ~~has~~ agreed to sell substantially all of its assets to Buyer for a cash ~~purchase~~ purchase price of $2,300,000 (the “Purchase Price”). The business of an entity that is in the process of disposing its assets by sale, or that intends to cease operations, is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. As such, the Company’s lab testing business is now reported as discontinued operations.

Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of September 30, 2024 and 2023. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations as net income from discontinued operations for the years ended September 30, 2024 and 2023. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Consolidated Statements of Cash Flows for the years ended September 30, 2024 and 2023.

F-9

Advertising Costs

The Company expenses the cost of advertising and promotions as incurred. Advertising and promotions expense was $422,~~444~~ 205 and $584,~~739~~ 444 for the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively.

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 years ended September 30, ~~2023~~2024 and ~~2022~~2023, potential dilutive securities of 83104,~~125~~490,~~488~~131 and 5883,~~941~~125,~~155~~488 shares issuable upon conversion of convertible notes payable, 8respectively,~~120,000~~ and 68,~~020~~120,000 shares issuable upon exercise of options, 15,387,050 ~~and 1,500,000~~ shares issuable upon exercise of warrants, and 13,579,710 ~~and 13,579,710~~ shares issuable upon conversion of Preferred A and Preferred B shares, ~~respectively,~~ had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

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 Equity-Based Payments to Non-employees 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.

Income Taxes

Uncertain Tax Positions

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.

~~F-10~~35

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

Recently Issued Accounting Pronouncements

~~There~~In ~~are~~November no2023, ~~recently~~the FASB issued ~~accounting~~ASU ~~pronouncements~~2023-07, ~~that~~Segment ~~the~~Reporting ~~Company~~(Topic ~~has~~280): ~~yet~~Improvements to ~~adopt~~Reportable ~~that~~Segment Disclosures, ~~are~~which ~~expected~~requires todisclosure ~~have~~of aincremental ~~material~~segment ~~effect~~information on ~~its~~an annual and interim basis. This ASU is effective for ~~financial~~fiscal ~~position~~years beginning after December 15, ~~results~~2023, ofand ~~operations~~interim periods within fiscal years beginning after December 15, or2024 ~~cash~~on ~~flows~~a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): 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 is currently evaluating the effect of this pronouncement on its disclosures.

Note 2 – Going Concern

As shown in the accompanying consolidated financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $1920,~~761~~547,~~997~~426, and as of September 30, ~~2023~~2024, the Company’s cash on hand may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The 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 – Fair Value of Financial Instruments

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

The Company has certain financial instruments that must be measured under the new fair value standard. The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, ~~2023~~2024 and ~~2022~~2023, respectively:

	Level 1		Level 2		Level 3
	Fair Value Measurements at September 30, 2023
	Fair Value Measurements at September 30, 2024
	Level 1		Level 2		Level 3
Assets
Cash	$	271,006	$	-	$	-
Liabilities
Notes payable	$	-	$	~~565,000~~-	$	-
Convertible notes payable, net of discounts of $43,051		-		-		1,~~725~~078,~~184~~235

	Level 1		Level 2		Level 3
	Fair Value Measurements at September 30, 2022
	Fair Value Measurements at September 30, 2023
	Level 1		Level 2		Level 3
Assets
Cash	$	56,168	$	-	$	-
Liabilities
Notes payable	$	-	$	~~665~~565,000	$	-
Convertible notes payable, net of discounts of $84,767		-		-		1,~~683~~725,~~467~~184
Convertible notes payable		-		-		1,725,184

The fair value of our intellectual properties is deemed to approximate book value, and are considered Level 3 inputs as defined by ASC Topic 820-10-35.

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the years ended September 30, ~~2023~~2024 or ~~2022~~2023.

~~F-11~~36

Note 4 – Related Party Transactions

During the ~~year~~years ended September 30, 2024 and 2023 the Company incurred compensation expense of $60,000 ~~for services provided by its CFO~~ and ~~paid its CFO~~ $~~111~~60,~~437~~000 for ~~accrued compensation related to~~ services provided inby its ~~prior periods~~CFO. As of September 30, ~~2023~~2024, no amounts were owed to the CFO for services provided.

During the ~~year~~years ended September 30, 2024 and 2023 the Company incurred fees of $24,000 and $34,000 for services provided by its directors. During ~~and~~the ~~paid~~year ~~its~~ended ~~directors $~~September 30,~~000~~ ~~for services provided~~2023, ~~and~~the ~~its~~ directors waived the payment of $138,000 that had been accrued for services provided. As of September 30, ~~2023~~2024, the Company has accrued a total of $10,000 in fees for services provided by its directors.

As of September 30, ~~2023~~2024, the Company has accrued a total of $25,~~390~~923 in reimbursable expenses owed to the officers and directors.

During the year ended September 30, 2024, the Company granted 6,000,000 shares of its common stock to the directors as compensation for services performed with a fair value of $112,200 . During the year ended September 30, 2023, the Company granted 3,400,000 and 1,400,000 shares of its common stock to the officers and directors as compensation for services performed with a fair value of $24,820 and $9,860, respectively.

Note 5 – 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 has been recorded due to the uncertainty of collectability.

On ~~various~~December ~~dates~~8, ~~between~~2022, ~~August~~the ~~23,~~Company ~~2021~~entered ~~and~~into ~~September~~an 30Asset Purchase Agreement with Invictus Wealth Group (“Invictus”), ~~2022~~whereby the Company agreed to sell certain collateralized equipment to Invictus for a total purchase price of $900,000. weThe ~~loaned~~purchase C3price ~~Labs~~consisted of an upfront payment of $275,000, ~~Inc.~~and a Note Receivable (“C3Invictus ~~Labs~~Note”) ain ~~total~~the amount of $1625,~~056,570~~000. The ~~loans~~Invictus ~~bore~~Note has a maturity date of December 31, 2023, accrues interest at ana ~~annual~~ rate of 810%. ~~These~~per ~~loans~~annum, ~~were~~and ~~evidenced~~provides byfor ~~secured~~principal ~~demand~~payments ~~notes~~of $100,000 each due on June 30, 2023 and ~~were~~September ~~secured~~30, by2023, awith ~~lien~~the final payment of $425,000 due on December 31, 2023. The Company has recorded a full allowance against the Invictus Note as collectability cannot be assured as of the date of this filing. As of June 30, 2023 the Company ~~borrower’s~~received ~~assets~~the full down payment of $275,000. In April 2023, the Invictus Note was amended and ~~have~~restated ato extend the maturity date to March 31, 2024, with principal payments of ~~August~~$100,000 23each due on September 30, ~~2022~~2023 and December 31, 2023, with the final payment of $425,000 due on March 31, 2024. ~~The~~On January 3, 2024, the Company ~~had~~amended ~~recorded~~the ~~total~~Invictus ~~accrued~~Note ~~interest~~for a second time to extend the maturity date to December 31, 2025, with principal payments of $6450,~~017~~000 aseach of due on June 30, 2024, September 30, ~~2022.~~2024 Asand ofDecember ~~September~~31, 2024, $100,000 due on March 31, 2025 and June 30, ~~2022~~2025, $125,000 due on September 30, 2025 with the ~~Company~~final ~~recorded~~payment aof ~~full~~$216,780 ~~allowance~~due ~~against~~on December 31, 2025. As of the date ~~loans~~of ~~and~~this ~~related~~filing, ~~accrued~~the ~~interest~~Company has received $74,000 of payments from Invictus.

The loans were made in connection with a potential acquisition of a controlling interest in C3 Labs pursuant to a letter of intent. On March 11, 2022, the Company notified the current owners of C3 Labs of its termination of the letter of intent and took possession of the equipment of C3 Labs (“C3 Equipment”).

On December 8, 2022, the Company entered into an Asset Purchase Agreement with Invictus Wealth Group (“Invictus”), whereby the Company agreed to sell the C3 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 (“Invictus Note”) in the amount of $625,000. The Invictus Note has a maturity date of December 31, 2023, accrues interest at a rate of 10% per annum, and provides 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. The Company has recorded a full allowance against the Invictus Note as collectability cannot be assured as of the date of this filing. 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. As of the date of this filing, the Company has not yet received any of the required payments.

Note 6 – Fixed Assets

Fixed assets consist of the following at September 30, ~~2023~~2024 and ~~2022~~2023:

Schedule of Fixed Assets

	2023			2022
	2024			2023
	As of
	September 30,			September 30,
	2023			2022
	2024			2023
Lab equipment	$	-27,655		$	~~55,000~~-
Fixed assets, gross		-			55,000
Less: accumulated depreciation		(1,046	)		-
Less: accumulated depreciation		-			-
Total	$	26,609		$	-
Total	$	-		$	55,000

~~F-12~~During the year ended September 30, 2023, the Company recorded impairment expense in the amount of $55,000 related to equipment acquired with the anticipation of an acquisition, which is included in other expenses on the statement of operations for the year ended September 30, 2023. Upon the Company’s decision to terminate the acquisition, the C3 Equipment was deemed to be impaired.

During the year ended September 30, 2023, the Company recorded impairment expense in the amount of $55,000 related to equipment acquired with the anticipation of the C3 Labs acquisition, which is included in other expenses on the statement of operations. Upon the Company’s decision to terminate the acquisition, the C3 Equipment was deemed to be impaired.37

Note 7 –Notes Payable

Notes payable consists of the following at September 30, ~~2023~~2024 and ~~2022~~2023, respectively:

Schedule of Notes Payable

	September 30, 2023			September 30, 2022
	September 30, 2024			September 30, 2023
On September 10, 2021, the Company issued a Secured Promissory note in the principal amount of $675,000 to US Canna Lab I, LLC (the “Canna Lab Note”). The Canna Lab Note carries interest at 12% per annum and is due on September 10, 2024, with monthly principal and interest payments of $22,419.66 beginning on October 1, 2021. In addition, the Company was advanced an additional $115,000 of funds during the year ended September 30, 2022 under the same terms as the original Canna Lab Note. During the year ended September 30, 2022, the Company repaid $125,000 of the principal balance on the note. As a result of the Company not meeting the monthly payment obligations, the Canna Lab Note is in technical default, however, no default notice has been provided by Canna Lab as of the date of this filing. There are no additional obligations of the Company under default with the exception of being due on demand.	$	665,000		$	665,000
On September 10, 2021, the Company issued a Secured Promissory note in the principal amount of $675,000 to US Canna Lab I, LLC (the “Canna Lab Note”). The Canna Lab Note carries interest at 12% per annum and is due on September 10, 2024, with monthly principal and interest payments of $22,419.66 beginning on October 1, 2021. In addition, the Company was advanced an additional $115,000 of funds during the year ended September 30, 2022 under the same terms as the original Canna Lab Note. During the year ended September 30, 2022, the Company repaid $125,000 of the principal balance on the note. As a result of the Company not meeting the monthly payment obligations, the Canna Lab Note is in technical default, however, no default notice has been provided by Canna Lab as of the date of this filing. There are no additional obligations of the Company under default with the exception of being due on demand. On February 27, 2024, the Company repaid the note and related accrued interest in full.	$	-		$	565,000
Total notes payable		~~665,000~~-			~~665~~565,000
Less: current maturities		~~(665,000~~-	)		(~~665~~565,000	)
Notes payable	$	-		$	-

The Company recorded interest expense pursuant to the stated interest rate and closing costs on the notes payable in the amount of $7936,~~800~~614 and $4579,~~444~~800 during the years ended September 30, ~~2023~~2024 and ~~2022~~2023.

Notes payable – discontinued operations

On December 26, 2019, the Company financed the purchase of $377,124 of lab equipment, in part, with the proceeds of a bank loan in the amount of $291,931. The loan bears interest at the rate of 5.75% per annum and requires monthly payments of $5,622 over the five-year term of the loan ending on December 26, 2024. The Company’s obligations under this loan are secured by a lien on the purchased equipment. $ ~~80,428~~- $ ~~141~~80,~~348~~428

F-13

Note 8 – Convertible Notes Payable

Related party convertible notes payable consist of the following at September 30, ~~2023~~2024 and ~~September 30~~2023, ~~2022,~~ respectively:

	September 30,			September 30,
	2023			2022
	2024			2023
On February 10, 2020, the Company completed the sale to an accredited investor of a 9% Secured Convertible Promissory Note in the principal amount of $350,000. The Note matures on August 10, 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 $50,000 of proceeds and the promissory note was increased to $400,000. 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 $50,000 of principal into 1,666,667 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 4,550,000 common shares, which were recorded as debt discount with a relative fair value of $43,788. As a result of the shares issued upon the extension agreement, the lender now holds more the 5% of the total outstanding common shares, and is therefore considered a related party.	$	350,000		$	350,000
On February 10, 2020, the Company completed the sale to an accredited investor of a 9% Secured Convertible Promissory Note in the principal amount of $350,000. The Note matures on August 10, 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 $50,000 of proceeds and the promissory note was increased to $400,000. 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 $50,000 of principal into 1,666,667 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 4,550,000 common shares, which were recorded as debt discount with a relative fair value of $43,788. As a result of the shares issued upon the extension agreement, the lender now holds more the 5% of the total outstanding common shares, and is therefore considered a related party. On February 27, 2024, the Company repaid the note and related accrued interest in full.	$	-		$	350,000
Total related party convertible notes payable		~~350,000~~-			350,000
Less: unamortized debt discounts		~~(10,748~~-	)		(3910,~~728~~748	)
Total convertible debt		~~339,252~~-			~~310~~339,~~272~~252
Less: current maturities		~~(339,252~~-	)		-
Related party convertible notes payable	$	-		$	~~310~~339,~~272~~252

~~F-14~~38

Convertible notes payable consist of the following at September 30, ~~2023~~2024 and ~~2022~~2023, respectively:

Schedule of Convertible Notes Payable

	September 30,			September 30,
	2023			2022
	2024			2023
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.	$	50,000		$	50,000
On February 11, 2020, the Company completed the sale to an accredited investor of a 9% Secured Subordinated Convertible Promissory Note in the principal amount of $150,000. 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 $50,000 of proceeds and the promissory note was increased to $200,000. The Company’s obligations under the Note are secured by subordinated 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 $50,000 of principal into 1,666,667 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 1,950,000 common shares, which were recorded as debt discount, with a relative fair value of $20,968.		150,000			150,000
On February 11, 2020, the Company completed the sale to an accredited investor of a 9% Secured Subordinated Convertible Promissory Note in the principal amount of $150,000. 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 $50,000 of proceeds and the promissory note was increased to $200,000. The Company’s obligations under the Note are secured by subordinated 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 $50,000 of principal into 1,666,667 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 1,950,000 common shares, which were recorded as debt discount, with a relative fair value of $20,968. On February 27, 2024, the Company repaid the note and related accrued interest in full.		-			150,000
On September 23, 2019, the Company received proceeds of $200,000 on a senior secured convertible note that carries an 8% interest rate, which matures 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, Inc. 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.		355,469			355,469
On November 8, 2018, the Company received proceeds of $350,000 on a senior secured convertible note that carries an 8% interest rate, which matures 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, Inc. 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.		350,000			350,000
On November 8, 2018, the Company received proceeds of $350,000 on a senior secured convertible note that carries an 8% interest rate, which matures 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, Inc. 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.		310,000			350,000
On October 1, 2022, the Company entered into a senior secured convertible note that carries an 8% interest rate, which matures 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.		362,765			362,765
On November 5, 2018, the Company received proceeds of $150,000 on a senior secured convertible note that carries an 8% interest rate, which matures 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, Inc. On February 27, 2024, the Company repaid the note and related accrued interest in full.		-			150,000
Total convertible notes payable		1,078,235			1,418,234
Less: unamortized debt discounts		-			(32,302	)
Total convertible debt		1,078,235			1,385,932
Less: current maturities		(1,078,235	)		(1,385,932	)
Convertible notes payable	$	-		$	-

On October 1, 2022, the Company entered into a senior secured convertible note that carries an 8% interest rate, which matures 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.		362,765			362,765
On November 5, 2018, the Company received proceeds of $150,000 on a senior secured convertible note that carries an 8% interest rate, which matures 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, Inc.		150,000			150,000
Total convertible notes payable		1,418,234			1,418,234
Less: unamortized debt discounts		(32,302	)		(45,039	)
Total convertible debt		1,385,932			1,373,195
Less: current maturities		(1,385,932	)		(1,198,469	)
Convertible notes payable	$	-		$	174,726

~~F-15~~The Company recorded debt amortization expense attributed to the previously recorded debt discount in the amounts of $43,050 and $135,655, during the years ended September 30, 2024 and 2023, respectively. Unamortized discount as of September 30, 2024 is $0.

In addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible notes by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price of the convertible notes. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt.

The aforementioned accounting treatment resulted in a total debt discount equal to $93,938 during the year ended September 30, 2023. The discount is amortized on a straight-line basis from the dates of issuance until the earlier of the stated redemption date of the debt, as noted above, or the actual settlement date. The Company recorded debt amortization expense attributed to the aforementioned debt discount in the amounts of $135,655 and $85,166, during the years ended September 30, 2023 and 2022, respectively. Unamortized discount as of September 30, 2023 is $43,050.

All of the convertible notes limit the maximum number of shares that can be owned by each note holder as a result of the conversions to common stock to 4.99% of the Company’s issued and outstanding shares except the note to the related party.

The Company recorded interest expense pursuant to the stated interest rates on the convertible notes in the amount of $~~148~~89,~~812~~ 603 and $~~113~~148,~~976~~ 812 for the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively.

The Company recognized interest expense for the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively, as follows:

Schedule of Interest Expense

	September 30, 2023		September 30, 2022
	September 30, 2024		September 30, 2023
Interest on notes payable	$	7936,~~800~~614	$	4579,~~444~~800
Amortization of beneficial conversion features		135,655		85,166
Amortization of debt discounts		43,050		135,655
Interest on convertible notes		~~148~~89,~~812~~603		~~113~~148,~~976~~812
Total interest expense	$	~~364~~169,267	$	~~244~~364,~~586~~267

Note 9 – Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 1070,000,000 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”), and 1,000 shares have been designated as Series C Preferred Stock (“Series C Preferred”), with the remaining 2,499,000 shares available for designation from time to time by the Board as set forth below. As of September 30, 2022, there were 1,047,942 shares of Series A Preferred issued and outstanding, 333,600 shares of Series B Preferred issued and outstanding, and 1,000 shares of Series C Preferred issued and outstanding. ~~The~~Our ~~Board~~board of ~~Directors~~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 and each share of Series B Preferred is currently convertible into twenty-five shares of common stock. The Series C Preferred is not convertible into common stock.

F-16

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 September 30, ~~2023~~ 2024 are convertible into 5,239,710 shares of the common stock of the Company. No holder is permitted to convert ~~its~~ 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 holders of the Series A Preferred generally will vote together with the holders of the common stock and not as a separate class, except as provided below.

●	Consent of the holders of the outstanding Series A Preferred 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 the 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.

During the year ended September 30, 2022, the Company offered to the Series A Preferred shareholders the ability to convert their Series A Preferred shares into Series B Preferred shares for an additional investment of 20% of their initial Series A investment. One Series A shareholder invested additional cash proceeds of $55,600 for 55,600 Series B Preferred shares and converted 278,000 of its Series A Preferred into Series B Preferred. As a result of the transaction, it was determined under ASC 470-20-40 that the Company had issued a deemed dividend from the induced conversion of the Series A Preferred into Series B Preferred in the amount of $192,154. For a description of the Series B Preferred, see Note 10.

F-17

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.

On July 25, 2022, the Company entered into a Securities Purchase Agreement ~~(the “Purchase Agreement”)~~ with Todd Denkin, the Company’s President, pursuant to which Mr. Denkin purchased 1,000 shares of the Series C Preferred for a purchase price of $0.10 per share. The Company determined that the shares had value in excess of the stated value in the amount of $360,200, which the Company recorded as compensation expense to the officer.

On March 2, 2023, the Company entered into a Preferred Stock Repurchase Agreement with Todd Denkin, the Company’s president, pursuant to which Mr. Denkin surrendered his Series C Preferred back to the Company for the purchase price of $100.

Common Stock

The common stock has a par value of $0.001, and 250,000,000 shares are authorized, of which 87123,~~096~~046,~~820~~825 shares were issued and outstanding as of September 30, ~~2023~~2024.

Common Stock Transactions for the Year Ended September 30, 2024

During the year ended September 30, 2024, the Company issued 4,000,000 shares of common stock for the conversion of $40,000 in principal of convertible note payables.

During the year ended September 30, 2024, the Company issued 31,950,005 shares of common stock, of which 6,000,000 were to the directors of the Company, for compensation. The shares were valued at the closing price on the date of issuance for aggregate value of $732,595, of which $112,200 was related to the shares issued to the directors.

Common Stock Transactions for the Year Ended September 30, 2023

During the year ended September 30, 2023, the Company issued 7,150,000 shares of its common stock in settlement of the common stock payable in the amount of $71,745.

During the year ended September 30, 2023, the Company granted 3,400,000 and 1,400,000 shares of its common stock to its officers and directors as compensation for services performed with a fair value of $24,820 and $9,860, respectively.

Common Stock Transactions for the Year Ended September 30, 2022

During the year ended September 30, 2022, the Company issued 1,500,000 shares of its common stock in exchange for services rendered to the Company, by its chief financial officer, with a total fair value of $52,500 based on the closing price of the Company’s common stock on the date of grant.

During the year ended September 30, 2022, the Company issued 2,166,667 shares of its common stock in exchange for services rendered to the Company by third party consultants, with a total fair value $91,000 based on the closing price of the Company’s common stock on the dates of grant.

During the year ended September 30, 2022, the Company issued 250,000 shares of its common stock to settle outstanding payables in the amount of $7,500 based on the closing price of the Company’s common stock on the dates of grant.

In connection with the Convertible Note extensions as described in Note 8, the Company was to issue 7,150,000 shares of common stock to the lenders as additional incentive. As of September 30, 2022, these shares have not yet been issued and as such are recorded as a stock payable with a fair value of $71,745 based on the closing price of the Company’s common stock on the dates of grant.

Amortization of Stock-Based Compensation

A total of $143,500 of stock-based compensation expense was recognized during the year ended September 30, 2022 as a result of the issuance of 3,666,667 shares of common stock, as amortized over the requisite service period.

F-18

Note 10 – 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 September 30, ~~2023~~2024 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 shares of common stock 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 the 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 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 balance sheet.

On December 30, 2021, the Company entered into an Exchange Agreement with one of the Company’s institutional investors (the “Investor”), pursuant to which the Investor exchanged 278,000 shares of the Series A Preferred for 278,000 shares of the Series B Preferred. In addition, on December 30, 2021, the Investor purchased 55,600 shares of Series B Preferred Stock at a price of $1.00 per share, resulting in gross proceeds to the Company of $55,600.41

Note 11 – 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 provides 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 year ended September 30, 2024.

During the year ended September 30, 2023, the Company issued to certain employees, options to purchase 2,100,000 shares of its common stock in exchange for services rendered to the Company with a total fair value of $10,446. The Company estimated the fair value using the Black-Scholes Option Pricing Model, based on a volatility rate of 184% and call option values of $0.00497 and exercise prices of $0.0056. The options have a term of 5.75 years and vest nine months after the grant date.

F-19

During the year ended September 30, 2022, the Company issued to an unrelated third party, options to purchase 1,000,000 shares of its common stock in exchange for services rendered to the Company with a total fair value $20,994. The Company estimated the fair value using the Black-Scholes Option Pricing Model, based on a volatility rate of 143% and call option values of $0.021 and exercise prices of $0.024, and vesting immediately.

Amortization of Stock-Based Compensation

A total of $241,~~474~~153 and $6224,~~533~~474 of stock-based compensation expense was recognized during the years ended September 30, ~~2023~~2024 and ~~2022~~2023, respectively, as a result of the vesting of common stock options issued. As of September 30, ~~2023~~2024, a total of $~~1,153~~0 of unamortized expense remains to be amortized over the vesting period.

The following is a summary of information about the stock options outstanding at September 30, ~~2023~~2024.

Shares Underlying

Options Outstanding

Options Exercisable

Weighted

Average

Weighted

Range of

Underlying

Remaining

Average

Underlying

Average

Exercise

Options

Contractual

Exercise

Options

Exercise

Prices

Outstanding

Life

Price

Exercisable

Price

0.0056 – $0.13

8,120,000

54.0302 years

0.052

68,~~020~~120,000

0.~~069~~052

The fair value of each option grant is estimated on the date of grant using the Black-Scholes Option Pricing Model with the following weighted-average assumptions used for grants under the fixed option plan:

	September 30,			September 30,
	2023			2022
	2024			2023
Average risk-free interest rates		~~3.88~~-	%		13.2188	%
Average expected life (in years)		~~2.9~~-			52.009
Volatility		~~184.34~~-	%		~~143~~184.34	%

The Black-Scholes Option Pricing Model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s common stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its common stock options. During the years ended September 30, 2023 ~~and September 30~~, ~~2022,~~ there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.

The weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during the year ended September 30, 2023 was approximately $0.005 per option.

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

				Weighted
	Number			Weighted Average
				Average
	of Shares			Exercise Price
	Number			Exercise
Balance, September 30, 2022		6,020,000		$	0.08
	of Shares			Price
Balance, September 30, 2021		5,620,000		$	0.08
Options issued		1,000,000			0.02
Options repurchased/expired		(600,000	)		(0.11	)
Balance, September 30, 2022		6,020,000		$	0.069
Options issued		2,100,000			0.006
Options repurchased/expired		-			-
Balance, September 30, 2023		8,120,000		$	0.069
Options issued		-			-
Options forfeited		-			-
Balance, September 30, 2023		8,120,000		$	0.052
Balance, September 30, 2024		8,120,000		$	0.052
Exercisable, September 30, 2023		6,020,000		$	0.069
Exercisable, September 30, 2024		8,120,000		$	0.052

As of September 30, 2023, these options in the aggregate had $19,320 of intrinsic value as the per share market price of $0.015 of the Company’s common stock as of such date was greater than the weighted-average exercise price of some of these options.42

FAs of September 30, 2024, these options in the aggregate had $54,330 of intrinsic value as the per share market price of $0.029 of the Company’s common stock as of such date was greater than the weighted-20average exercise price of some of these options.

Note 12 – Common Stock Warrants

Warrants to purchase a total of 15,387,050 shares of common stock were outstanding as of September 30, ~~2023~~2024.

There were no issuances of common stock warrants during the year ended September 30, 2024.

During the year ended September 30, 2023, warrants to purchase an aggregate total of 13,887,050 shares of common stock at a weighted average exercise price of $0.007 were issued in connection with the debt extensions as described in Note 8.

~~During~~The ~~the~~following ~~year~~is ~~ended~~a ~~September~~summary ~~30,~~of ~~2022,~~information about our warrants to purchase ~~an aggregate total of 1,035,001 shares of~~ common stock outstanding at aSeptember ~~weighted~~30, ~~average~~2024 (including those ~~exercise~~issued ~~price~~to ofboth ~~$0.26~~investors ~~per~~and ~~share~~service ~~expired~~providers).

The following is a summary of information about our warrants to purchase common stock outstanding at September 30, 2023 (including those issued to both investors and service providers).

Shares Underlying

Warrants Outstanding

Warrants Exercisable

Weighted

Average

Weighted

Range of

Underlying

Remaining

Average

Underlying

Average

Exercise

Warrants

Contractual

Exercise

Warrants

Exercise

Prices

Outstanding

Life

Price

Exercisable

Price

0.0074-0.10

15,387,050

87.76 years

0.016

15,387,050

0.016

The fair value of each warrant grant is estimated on the date of grant using the Black-Scholes Option Pricing Model with the following weighted-average assumptions used for grants under the fixed option plan:

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

				Weighted
	Number			Weighted Average
				Average
	of Shares			Exercise Price
	Number			Exercise
Balance, September 30, 2022		2,535,001		$	0.10
	of Shares			Price
Warrants granted		13,887,050			0.007
Balance, September 30, 2021		2,535,001		$	0.17
Warrants expired		-			-
Balance, September 30, 2023		15,387,050		$	0.10
Warrants granted		-			-
Warrants expired		(1,035,001	)		(0.26	)
Balance, September 30, 2022		1,500,000		$	0.10
Warrants granted		13,887,050			.007
Warrants expired		-			-
Balance, September 30, 2023		15,387,050		$	0.016
Balance, September 30, 2024		15,387,050		$	0.016
Exercisable, September 30, 2023		15,387,050		$	0.016
Exercisable, September 30, 2024		15,387,050		$	0.016

As of September 30, ~~2023~~2024, these warrants in the aggregate had $~~102~~298,~~764~~572 of intrinsic value as the per share market price of $0.~~015~~029 of the Company’s common stock as of such date was greater than the exercise price of some of these warrants.

~~F-21~~43

Note 13 – ~~Commitments and Contingencies~~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		For the
	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023

Operating lease cost	$	20,236	$	-
Total net lease cost	$	20,236	$	-

Supplemental balance sheet information related to leases was as follows:

	September 30,			September 30,
	2024			2023
Operating leases:
Operating lease assets	$	57,006		$	-

Current portion of operating lease liabilities		36,428		$	-
Noncurrent operating lease liabilities		26,838			-
Total operating lease liabilities	$	63,266		$	-

Weighted average remaining lease term:
Operating leases		1.75 years			-

Weighted average discount rate:
Operating leases		7.9	%		-	%

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

	For the		For the
	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	11,309	$	-
Financing cash flows used for finance leases	$	-	$	-

Leased assets obtained in exchange for lease liabilities:
Total operating lease liabilities	$	74,575	$	-
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 September 30, 2024:

Fiscal Year Ending	Minimum Lease
September 30,	Commitments
2025	$	40,143
2026		27,639
2027		-
2028		-
2029		-
Total future undiscounted lease payments		67,782
Less interest		(4,513	)
Present value of lease payments		63,266
Less current portion		36,428
Long-term operating lease liabilities	$	26,838

Note 14 – Commitments and Contingencies

Legal Contingencies

Note 1415 – Discontinued Operations

On April 20, 2023, the Company, and Digipath Labs entered into the Purchase Agreement with DPL NV, LLC (“Buyer”), pursuant to which Digipath Labs ~~has~~ agreed to sell substantially all of its assets to Buyer for a cash purchase price of $2,300,000 (the “Purchase Price”) as described in Note 1 above. The Purchase Price iswas subject to adjustments at closing based on, among other things, the amount by which the working capital of Digipath Labs at the closing is greater or less than $150,000.

The Purchase Agreement includes a number of representations, warrantees, covenants and conditions to closing customary for this type of transaction. In addition, the closing of the transaction iswas subject to the approval of the Nevada Cannabis Compliance Board (the “CCB”). In the event CCB approval iswas not obtained by June 30, 2024, or any other condition to closing ~~has~~had not been satisfied by such date, either party ~~may~~could terminate the Purchase Agreement.

Pursuant to the Purchase Agreement, the Buyer deposited $230,000 into an escrow account upon the execution of the Purchase Agreement, and such amount will continue to be held in escrow for a 12-month period following closing to satisfy any indemnification claims Buyer may have against Digipath Labs.

In connection with the transactions contemplated by the Purchase Agreement, Digipath, Digipath Labs and Buyer entered into a Management Services Agreement (the “Management Services Agreement”), dated as of April 30, 2023, pursuant to which Buyer ~~has~~was ~~been~~ engaged to manage the operation of Digipath Labs’ cannabis testing laboratory (the “Lab”). The effectiveness of the Management Services Agreement iswas subject to the approval of the CCB, which was obtained on October 17, 2023. Pursuant to the Management Services Agreement, after the payment of expenses to third parties and a payment of 15% of cash collections to Digipath (but not less than $15,000) in each month, Buyer ~~will~~is be entitled to a management fee of $10,000 per month. Any remaining cash generated from the operation of the ~~Lab~~ Lab in any month ~~will~~is be payable 45% to the Buyer and 55% to the Company.

On February 20, 2024, we completed the sale of the net assets of our subsidiary Digipath Labs to Buyer. On June 24, 2024, the Company and the Buyer settled the final amount owed on the working capital adjustment for an additional payment of $42,835. As a result of the closing, the Company recognized a gain on the sale of the assets in the amount of $1,581,981 which includes the excess value of the Purchase Price above the net assets as well as the working capital adjustment. As of September 30, 2024, the Company was still owed $241,419 which is comprised of a portion of the final working capital adjustment and the initial escrow deposit, which is recorded in other current assets in the accompany balance sheet.

The balance sheets of Digipath Labs are summarized below:

Schedule of Discontinued Operations of Income Statement and Balance Sheet ~~and Additional~~ Disclosures

	September 30, 2023		September 30, 2022
	September 30, 2024		September 30, 2023
Current assets:
Accounts receivable, net	$	~~447,410~~-	$	~~335~~447,~~085~~410
Deposits		~~18,675~~-		2518,~~141~~675
Other current assets		~~20,137~~-		3220,~~971~~137
Total current assets		~~486,222~~-		~~393~~486,~~197~~222
Right-of-use asset		~~274,985~~-		~~316~~274,~~961~~985
Fixed assets, net		~~368,681~~-		~~405~~368,~~823~~681
Total long term assets		~~643,666~~-		~~722~~643,~~784~~666
Total Assets	$	~~1,129,888~~-	$	1,~~115~~129,~~981~~888
Current liabilities:
Accounts payable	$	~~158,869~~-	$	~~283~~158,~~098~~869
Accrued expenses		~~61,512~~-		3261,~~571~~512
Current portion of operating lease liabilities		~~83,757~~-		~~100~~83,~~685~~757
Current maturities of notes payable		~~64,517~~-		6064,~~920~~517
Total current liabilities		~~368,655~~-		~~477~~368,~~274~~655
Operating lease liabilities		~~143,245~~-		~~229~~143,~~825~~245
Notes payable		~~15,911~~-		8015,~~428~~911
Total long term liabilities		~~159,156~~-		~~310~~159,~~253~~156
Total Liabilities	$	~~527,811~~-	$	~~787,~~527,811

~~F-22~~45

The statements of operations of Digipath Labs combined are summarized below:

	2023			2022
	2024			2023
	For the Years Ended
	September 30,
	2023			2022
	2024			2023
Revenues	$	31,~~330~~635,~~704~~299		$	23,~~699~~330,~~920~~704
Cost of sales		1650,~~736,401~~524			1,~~633~~736,~~972~~401
Gross profit		1984,~~594,303~~775			1,~~065~~594,~~948~~303
Operating expenses:
General and administrative		~~883~~393,~~781~~168			~~927~~883,~~671~~781
Professional fees		984,~~352~~750			298,~~157~~352
Total operating expenses		~~982~~397,~~133~~918			~~929~~982,~~828~~133
Operating income(loss)		~~612~~586,~~170~~857			~~136~~612,~~120~~170
Other income (expense):
Other income		~~322,798~~-			-322,798
Interest expense		(61,~~539~~701	)		(156,~~687~~539	)
Total other income (expense)		~~316~~(1,~~259~~701			~~(15~~316,~~687~~259	)
Net income (loss)	$	~~928~~585,~~429~~156		$	~~120~~928,~~433~~429

Note 1516 - Income Tax

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

~~For~~At ~~the years ended~~ September 30, ~~2023 and 2022~~2024, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At September 30, 2023, the Company had approximately $1413,~~096~~825,000 of Federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in ~~2031~~2032.

The effective income tax rate for the years ended September 30, ~~2023~~2024 and ~~2022~~2023 consisted of the following:

Schedule of Effective Income Tax Rate

	2023			2022
	2024			2023
	September 30,
	2023			2022
	2024			2023
Federal statutory income tax rate		21	%		21	%
State income taxes		-	%		-	%
Change in valuation allowance		(21	)%		(21	)%
Other		(2	)%		-	%
Net effective income tax rate		-			-
Change in valuation allowance		(18	)%		(21	)%
Net effective income tax rate		1	%		-	%

The components of the Company’s deferred tax asset are as follows:

Schedule of Deferred Tax Asset

	2023			2022
	2024			2023
	September 30,
	2023			2022
	2024			2023
Deferred tax assets:
Net operating loss carry forwards	$	2,~~960~~903,~~100~~300		$	32,~~130~~960,~~800~~100
Net deferred tax assets before valuation allowance	$	2,~~960~~903,~~100~~300		$	32,~~130~~960,~~800~~100
Less: Valuation allowance		(2,~~960~~903,~~100~~300	)		(32,~~130~~960,~~800~~100	)
Net deferred tax assets	$	-		$	-

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at September 30, ~~2023~~2024 and ~~2022~~2023, respectively.

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

Note 1617 – Subsequent Events

On October 1715, ~~2023~~2024, the ~~CCB~~Company ~~approved~~entered into a secured credit facility with and unrelated third party. Under the ~~Management~~facility, ~~Services~~the ~~Agreement~~Company is able to borrow up to $200,000 ~~dated~~which aswill incur interest at a rate of ~~April~~12%, 30and is payable upon the earlier of February 28, ~~2023~~2025, ~~pursuant~~or the todate which the ~~Buyer~~Company ~~was~~receives ~~engaged to~~the ~~manage~~escrow amount from the ~~operations~~sale of the ~~Company’s~~assets ~~cannabis~~of ~~testing~~Digipath ~~laboratory,~~Labs. inAs ~~connection~~of ~~with~~the date of this filing, the Company ~~Purchase~~has ~~Agreement.~~borrowed, ~~See~~$20,000 ~~Note~~against 14the facility.

~~F-23~~On November 15, 2024, the Company issued 3,000,000 shares of common stock to a consultant for services rendered. The shares were valued using the closing stock price on the date of issuance for a value of $57,000.

On November 27^th, 2024, the Company entered into an amendment to the Asset Purchase Agreement with the Buyer of the Digipath Labs assets. Pursuant to the amendment the Company and Buyer agreed to an early release of the Escrow Deposit, whereby the Escrow Deposit will be reduced to $200,000 and released immediately to the Company. The Company received the proceeds from the Escrow on December 3, 2024.

On December 10, 2024, the Company entered into a Securities Purchase Agreement with A. Stone Douglass (the “Douglass Purchase Agreement”), the Company’s Chairman, President, Chief Executive Officer, Chief Financial Officer, Secretary and Director, pursuant to which Mr. Douglass purchased 1,000 shares of the Company’s Series C Preferred stock for a purchase price of $0.10 per share.

On December 10, 2024, our board of directors (i) approved the Douglass Purchase Agreement, and (ii) approved and submitted for a vote of the holder of a majority of the outstanding voting stock of the Company an amendment to the Company’s Articles of Incorporation, as amended, to increase (1) the authorized shares of the Company’s common stock from 250,000,000 shares to 880,000,000 shares, and (2) the authorized shares of the Company’s preferred stock from 10,000,000 shares to 70,000,000 shares (the “Charter Amendment”).

On December 10, 2024, A. Stone Douglass, as the holder of a majority of the outstanding voting stock of the Company, approved the Charter Amendment. The increase in authorized shares of the Company’s common stock and preferred stock set forth in the Charter Amendment will only take effect if and when the Company files the Charter Amendment with the Secretary of State of the State of Nevada. The Charter Amendment was filed on January 13, 2025.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

~~On October 2, 2023, we retained Fruci & Associates II, PLLC (“Fruci”) to perform our audit work for the year ended September 30, 2023~~None. ~~There were no disagreements with accountants.~~

ITEM 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, ~~2023~~2024 (the “Evaluation Date”). 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 September 30, ~~2023~~2024, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our Principal Executive Officer and our Principal Accounting Officer, an assessment, including testing of the effectiveness, of our internal control over financial reporting as of the Evaluation Date. Management’s assessment of internal control over financial reporting was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013 Framework).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with management’s assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we have identified the following material weaknesses in our internal control over financial reporting as of the Evaluation Date.

	-	Lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by our Officers.
	-	Lack of a formal review process that includes multiple levels of review, as all accounting and financial reporting functions are performed by our Officers and the work is not reviewed by anyone.

We have thus concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

1948

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Changes in Internal Control over Financial Reporting

There have been no 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 fourth fiscal quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. Other Information

~~None~~During the year ended September 30, 2024, 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 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10. Directors, Executive Officers and Corporate Governance

Set forth below are the present directors and executive officers of the Company. There are no arrangements or understandings between any of the directors, officers and other persons pursuant to which such person was selected as a director or an officer.

Name	Age	Position
Todd Denkin	61	President
A. Stone Douglass	77	Chairman, President, Chief Executive Officer, Chief Financial Officer, Secretary and Director
A. Stone Douglass	76	Chairman, Director, Secretary and CFO
Dennis Hartmann	69	Director
Dennis Hartmann	68	Director

Biographies

Set forth below are brief accounts of the business experience of each director and executive officer of the Company.

~~Todd~~A. ~~Denkin~~Stone Douglass was appointed asa ~~President~~director of the Company on July 1, 2021., ~~Mr.~~as ~~Denkin~~our ~~has~~Chief ~~many~~Financial ~~years~~Officer ofon ~~experience~~August in16, 2021, as Chairman of the ~~“legal”~~Board ~~marijuana industry,~~of ~~and~~Directors ~~has~~on inOctober ~~the~~21, ~~past~~2021 ~~been~~and anas ~~integral~~President ~~part~~and ofChief ~~the~~Executive ~~Company’s~~Officer ~~management~~on February 29, 2024. Mr. ~~Denkin~~Douglass has ~~originally~~been: ~~joined~~ the ~~Company~~Chief inExecutive ~~April 2014~~Officer asof ~~President~~GeoSolar Technologies, ~~and~~Inc., ~~served~~a ascompany ~~the~~planning ~~Company’s~~to install natural energy systems, since December 2020; the Chief ~~Executive~~Financial Officer ~~from~~of ~~October~~David ~~2014~~Kind, ~~until~~Inc., ~~June~~a 21Venice, ~~2016.~~California Hebased ~~then~~online ~~served~~eyewear ~~as the~~brand, ~~Company’s~~since ~~President~~June 2013; the Chairman and Chief ~~Operating~~Executive Officer ~~until~~of ~~September~~Sealand 26Natural Resources, ~~2019~~Inc., a manufacturer and ~~was~~purveyor ~~thereafter~~of aSealand ~~consultant~~Birk tobirch ~~the~~water ~~Company~~and ~~until~~other alternative ~~December~~beverages, ~~2019.~~since ~~From~~March ~~January~~2016; ~~2020~~the ~~until~~Chief ~~December~~Financial ~~2020~~Officer ~~when~~of heP5 ~~was~~Systems, ~~re-engaged~~Inc., bya ~~the~~San ~~Company~~Diego asbased atechnology ~~consultant,~~platform ~~Mr.~~known ~~Denkin~~as ~~provided~~the ~~consulting~~Craig’s ~~services~~List toof cannabis ~~producers~~, ~~and~~servicing ~~was~~the ~~active~~legal ~~as a~~ cannabis ~~testing~~value ~~educator~~chain, ~~and~~since ~~content~~March ~~provider.~~2018; ~~Prior~~and ~~to joining~~ the ~~Company~~principal inowner ~~April 2014,~~of ~~Mr.~~Ducks ~~Denkin~~Nest ~~served~~Investments asInc, a ~~co-founder~~private ~~and~~investment ~~president~~company, ofsince ~~both~~September 101990. ~~Mile~~We ~~and~~believe ~~Growopp,~~that ~~LLC~~Mr. ~~where~~Douglass’s hefinancial ~~created~~and ~~controlled~~business ~~environmental~~experience ~~indoor~~qualify him ~~hydroponic~~to ~~grow~~serve ~~chambers~~as ~~from~~one ~~2011~~of toour ~~2013~~directors.

A. Stone Douglass was appointed a director of the Company on July 1, 2021, as our Chief Financial Officer on August 16, 2021, and as Chairman of the Board of Directors on October 21, 2021. Mr. Douglass has been: the Chief Executive Officer of GeoSolar Technologies, Inc., a company planning to install natural energy systems, since December 2020; the Chief Financial Officer of David Kind, Inc., a Venice, California based online eyewear brand, since June 2013; the Chairman and Chief Executive Officer of Sealand Natural Resources, Inc., a manufacturer and purveyor of Sealand Birk birch water and other alternative beverages, since March 2016; the Chief Financial Officer of P5 Systems, Inc., a San Diego based technology platform known as the Craig’s List of cannabis, servicing the legal cannabis value chain, since March 2018; and the principal owner of Ducks Nest Investments Inc, a private investment company, since September 1990. We believe that Mr. Douglass’s financial and business experience qualify him to serve as one of our directors.

Dennis Hartmann was appointed to our Board of Directors on September 25, 2019 and as Interim President on August 14, 2020. Mr. Hartmann resigned as Interim President on July 1, 2021. Mr. Hartmann had been an attorney engaged in private practice in the State of California for over 35 years. Mr. Hartmann holds a B.S. from the University of Alabama and a J.D. from the University of Texas School of Law. We believe that Mr. Hartmann’s legal experience qualifies him to serve as one of our directors.

Family Relationships

~~None~~No family relationships exist between any of our officers or directors.

Board Committees and Audit Committee Financial Expert

We do not currently have a standing audit, nominating or compensation committee of the board of directors, or any committee performing similar functions. Our board of directors performs the functions of audit, nominating and compensation committees. As of the date of this Annual Report, no member of our board of directors qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act.

Director Nominations

As of September 30, ~~2023~~2024, we did not affect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. We have not established formal procedures by which security holders may recommend nominees to the Company’s board of directors.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than 10% of a registered class of the Company’s securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Directors, executive officers and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. To our knowledge, based solely on the review of the copies of these forms furnished to us and representations that no other reports were required, the Company believes that all forms required to be filed under Section 16 of the Exchange Act for the year ended September 30, ~~2023~~2024 were filed timely with the exception of two Forms 4 for A. Stone Douglass.

Code of Ethics and Business Conduct

We have adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of our code of ethics may be obtained free of charge by contacting us at the address or telephone number listed on the cover page hereof.

ITEM 11. Executive Compensation

Summary Compensation Table

The following summary compensation table sets forth the aggregate compensation we paid or accrued during the fiscal years ended September 30, ~~2023~~2024 and September 30, ~~2022~~2023 to persons serving as our Chief Executive Officer and Chief Financial Officer during our ~~year~~years ended September 30, 2024 and September 30, 2023 (our “Named Executive Officers”), who were our only executive officers during 2023 and 2024, as none of our other officers earned total compensation in excess of $100,000 during our last completed fiscal year.

	Fiscal			Stock			Option		All Other
Name and Financial Position	Year	Salary		Awards			Awards		Compensation		Total
Todd Denkin(1)	2023	$	165,500	$	10,220	(2)	$	-	$	-	$	175,720
A. Stone Douglass(1)	2024	$	60,000	$	74,800	(2)	$	-	$	-	$	134,800
President	2022	$	150,000	$	-		$	-	$	-	$	150,000
Chairman, President, Chief Executive Officer, Chief Financial Officer and Secretary	2023	$	60,000	$	14,600	(3)	$	-	$	-	$	74,600
A. Stone Douglass(3)	2023	$	60,000	$	14,600	(4)		-		-	$	74,600
Todd Denkin(4)	2024	$	75,221	$	-		$	-	$	-	$	75,221
Chief Financial Officer	2022	$	50,000	$	52,500	(5)		-		-	$	102,500
Former President	2023	$	165,500	$	10,220	(5)	$	-	$	-	$	175,720

~~(1)~~	~~Mr. Denkin was appointed President on July~~ (1~~, 2021.~~)	Mr. Douglass was appointed Chief Financial Officer on August 16, 2021, and President and Chief Executive Officer on February 29, 2024.
~~(2)~~	~~Amount relates to 1,400,000 shares of Common Stock issued to Mr. Denkin on January 18, 2023 for services performed in connection with work related to the sale of Digipath Labs, Inc.~~(2)	Amount relates to 4,000,000 shares of Common Stock issued to Mr. Douglass on February 29, 2024 in connection with his appointment as President and Chief Executive Officer.
~~(3)~~	~~Mr. Douglass was appointed Chief Financial Officer on August 16, 2021.~~(3)	Amount relates to 2,000,000 shares of Common Stock issued to Mr. Douglass on January 18, 2023 for services performed in connection with work related to the sale of Digipath Labs, Inc.
~~(4)~~	~~Amount relates to 2,000,000 shares of Common Stock issued to Mr. Douglass on January 18, 2023 for services performed in connection with work related to the sale of Digipath Labs, Inc.~~(4)	Mr. Denkin was appointed President on July 1, 2021, and resigned as President on February 28, 2024.
~~(5)~~	~~Amount relates to 1,500,000 shares of Common Stock issued to Mr. Douglass on August 16, 2021 upon his appointment as Chief Financial Officer.~~(5)	Amount relates to 1,400,000 shares of Common Stock issued to Mr. Denkin on January 18, 2023 for services performed in connection with work related to the sale of Digipath Labs, Inc.

~~Employment Agreements~~50

WeAgreements ~~are not party to an employment agreement~~ with ~~Todd~~Named ~~Denkin.~~Executive Officers

We have a consulting agreement in place with A. Stone Douglass, in which we have agreed to pay Mr. Douglass $5,000 per month.

Outstanding Equity Awards

The following table sets forth information with respect to unexercised stock options, stock that has not vested, and equity incentive plan awards held by our Named Executive Officers at September 30, ~~2023~~2024.

Outstanding Option Awards at Fiscal Year-End
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price		Option Expiration Date
Todd Denkin, President		-		-	$	-	N/A
A. Stone Douglass		1,000,000		-	$	0.06		June 2, 2031
A. Stone Douglass		1,000,000		-	$	0.06	June 2, 2031

Option Exercises and Stock Vested

None of our Named Executive Officers exercised any stock options or acquired stock through vesting of an equity award during the year ended September 30, ~~2023~~2024.

Director Compensation

The following table summarizes the compensation paid or accrued by us to our directors that are not Named Executive Officers for the year ended September 30, ~~2023~~2024.

Name		Fees Earned or Paid in Cash				Stock Award				Option Awards				Non-Equity Incentive Compensation				Change in Pension Value and Nonqualified Deferred Compensation Earnings				All other Compensation				Total
Dennis Hartmann(1)		$	1920,000			$	337,~~650~~400			$				$	-			$	-			$	-			$	2257,~~650~~400

(1) We have agreed to compensate Mr. Hartmann a total of $5,000 in cash per quarter for his service as a director beginning in the quarter ended June 30, ~~2023~~2024.

Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of January 1613, ~~2024~~2025, certain information with regard to the record and beneficial ownership of ~~the~~ the Company’s common stock by (i) each person known to the Company to be the record or beneficial owner of 5% or more of the Company’s common stock, (ii) each director of the Company, (iii) each of the named executive officers, and (iv) all executive officers and directors of the Company as a group. The address of each of our directors and executive officers named in the table is c/o ~~Digipath~~Hypha Labs, Inc., ~~6450~~5940 S. ~~Cameron~~Rainbow ~~Street~~Boulevard, ~~Suite 113,~~ Las Vegas, Nevada 89118:

						Series A and B
						Series A, B and C
	Common Stock					Preferred Stock
Name of Beneficial Owner(1)	Number of Shares		% of Class(2)			Number of Shares		% of Class
Officers and Directors:
Dennis Hartmann Director(3)		13,075,000		1.2.4	%		-		-
Todd Denkin, President		2,958,824		3.4	%		-		-
A. Stone Douglass, Chairman and CFO(4)		8,500,000		6.7	%		1,000		100	%
A. Stone Douglass, Chairman and CFO(4)		4,500,000		3.2	%
Directors and Officers as a Group (2 persons)		11,575,000		9.1	%		-		-
Directors and Officers as a Group (3 persons)		8,533,824		9.7	%		-		-
Greater than 5% shareholders:
Bruce Raben (5)		4,790,000		5.4	%		-		-
Craig Ellins		8,000,001		6.5	%
Anthony Podell		6,216,667		7.1	%		-		-

* less than 1%

(1)	Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock or Series A, Series B or Series BC Preferred Stock owned by such person.
(2)	Percentage of beneficial ownership is based upon 87126,~~096~~546,~~820~~825 shares of Common Stock outstanding as of January 1613, ~~2024~~2025. For each named person, this percentage includes Common Stock that the person has the right to acquire either currently or within 60 days of January 1613, ~~2024~~2025, including through the exercise of an option; however, such Common Stock is not deemed outstanding for the purpose of computing the percentage owned by any other person.
(3)	Includes options to purchase 250,000 shares of common stock exercisable at $0.10 per share.
(4)	Includes options to purchase 1,000,000 shares of common stock exercisable at $0.06 per share. Includes Mr. Douglass’ ownership of 1,000 shares of Series C Preferred stock as of December 10, 2024.
(5)	Includes options to purchase 1,500,000 shares of common stock exercisable at $0.06 per share,

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Director Independence

Our board of directors currently consists of Dennis Hartmann and A. Stone Douglass~~; Bruce Raben resigned as a director on May 2, 2023~~. Our ~~Board~~ board of ~~Directors~~directors has determined that Mr. Hartmann, one of our two directors, is “independent” in accordance with the NASDAQ ~~Global~~ Stock Market’s requirements. However, as our common stock is currently quoted on the OTCQB, we are not currently subject to corporate governance standards of listed companies.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

All audit work was performed by the full-time employees of ~~M&K CPAS, PLLC (“M&K”) for the years ended September 30, 2022 and 2021. We retained~~ Fruci & Associates II, PLLC (“Fruci”) ~~to perform our audit work~~ for the ~~year~~years ended ~~September~~ September 30, ~~2023~~2024 onand ~~October 2,~~ 2023. Our board of directors does not have an audit committee. The functions customarily delegated to an audit committee are performed by our full board of directors. Our board of directors approves in advance, all services performed by our auditors. Our board of directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant’s independence and has approved such services.

The following table sets forth fees billed by our auditors during the last two fiscal years for services rendered for the audit of our annual consolidated financial statements and the review of our quarterly financial statements, services by our auditors that are reasonably related to the performance of the audit or review of our consolidated financial statements and that are not reported as audit fees, services rendered in connection with tax compliance, tax advice and tax planning, and all other fees for services rendered.

	Years Ended September 30,
	2023		2022
	2024		2023
Audit fees - M&K :(1)	$	53,835	$	41,200
Audit fees - Fruci :(1)		67,500		12,500
Audit fees - Fruci :(1)		12,500
Audit related fees		-		-
Tax fees		-		-
All other fees		-		-
Total	$	6667,~~335~~500	$	4166,~~200~~335

⁽¹⁾Audit fees were principally for audit services and work performed in the review of the Company’s quarterly reports on Form 10-Q.

PART IV

ITEM 15. Exhibits and Financial Statement Schedules

Exhibit		Description
2.1		Stock Purchase Agreement between ~~Digipath,~~the ~~Inc.~~Company, VSSL Enterprises Ltd., Kyle Joseph Remenda, Philippe Olivier Henry, PhD, Audim Ventures Ltd. and Britt Ash Enterprises Ltd., dated March 9, 2020 (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on March 16, 2020)
3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 10 filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on July 15, 2011)
3.2		Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10 filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on July 15, 2011)
3.3		Certificate of Amendment to Articles of Incorporation dated April 4, 2014 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on April 10, 2014)
3.4		Certificate of Designations, Preferences, Limitations, Restrictions and Relative Rights of Series A Convertible Preferred Stock dated April 9, 2014 (incorporated by reference to Exhibit 3.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on April 10, 2014)
3.5		Certificate of Amendment to Articles of Incorporation dated May 22, 2015 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on May 26, 2015)
3.6		Certificate of Amendment to Articles of Incorporation dated May 14, 2019 (incorporated by reference to Exhibit 3.6 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by ~~Digipath,~~the ~~Inc.~~Company on August 13, 2019)
3.7		Certificate of Designation of the Series B Preferred Stock of Digipath, Inc., filed December 29, 2021 (incorporated by reference to Exhibit 3.1 of the Report on 8-K filed with the Securities and Exchange Commission by Digipath, Inc on January 6, 2022)
3.8		Certificate of Designation of the Series C Preferred Stock of Digipath, Inc., filed with the Secretary of State of the State of Nevada on July 20, 2022. (incorporated by reference to Exhibit 3.1 of the Report on 8-K filed with the Securities and Exchange Commission by Digipath, Inc on July 26, 2022)
4.1		Form of 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on November 21, 2018)
4.2		Form of 8% Senior Secured Convertible Notes due September 23, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on September 26, 2019)
4.3		9% Secured Convertible Note, between Digipath, Inc. and holder, due August 10, 2022 (incorporated by reference to Exhibit 4.3 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
4.4		9% Secured Subordinated Convertible Note, between Digipath, Inc. and holder, due August 11, 2022 (incorporated by reference to Exhibit 4.4 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
4.5		9% Secured Subordinated Convertible Note, between Digipath, Inc. and holder, due August 11, 2022 (incorporated by reference to Exhibit 4.5 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on May 15, 2020)
4.6		Form of Amendment to 9% Secured Convertible Note, between Digipath, Inc. and holder, due August 10, 2022 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on January 6, 2021)
4.7*		Description of Securities
10.1		2012 Stock Incentive Plan (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on March 9, 2012)
10.2		Digipath, Inc. Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)
10.3		Form of Stock Option Grant Notice for grants under the Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)

2553

10.4		Form of Option Agreement for grants under the Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)
3.7		Certificate of Designation of the Series B Preferred Stock of the Company, filed December 29, 2021 (incorporated by reference to Exhibit 3.1 of the Report on 8-K filed with the Securities and Exchange Commission by the Company on January 6, 2022)
10.5		Security Agreement, between Digipath, Inc. Digipath Labs, Inc., and collateral agent for the holders of the 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on November 21, 2018)
3.8		Certificate of Designation of the Series C Preferred Stock of the Company, filed with the Secretary of State of the State of Nevada on July 20, 2022. (incorporated by reference to Exhibit 3.1 of the Report on 8-K filed with the Securities and Exchange Commission by the Company on July 26, 2022)
10.6		Security Agreement, between Digipath, Inc. Digipath Labs, Inc., and holder of the 8% Secured Convertible Note due September 23, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on September 26, 2019)
3.9		Certificate of Amendment to Articles of Incorporation of the Company, filed with the Secretary of State of the State of Nevada on March 12, 2024 (incorporated by reference to Exhibit 3.9 of the Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on May 20, 2024)
10.7		Security Agreement, between Digipath, Inc., Digipath Labs, Inc., and holder of the 9% Senior Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
4.1		Form of 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on November 21, 2018)
10.8		Security Agreement, between Digipath, Inc., Digipath Labs, Inc., and holder of the 9% Senior Secured Convertible Note due August 11, 2022 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
4.2		Form of 8% Senior Secured Convertible Notes due September 23, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on September 26, 2019)
10.9		Security Agreement, between Digipath, Inc., Digipath Labs, Inc., and holder of the 9% Senior Secured Convertible Note due August 11, 2022 (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on May 15, 2020)
4.3		9% Secured Convertible Note, between the Company and holder, due August 10, 2022 (incorporated by reference to Exhibit 4.3 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on February 14, 2020)
10.10		Paycheck Protection Program Loan Note between Digipath Labs, Inc. and WebBank, holder of the 1% Promissory Note due May 13, 2025 (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 14, 2020)
4.4		9% Secured Subordinated Convertible Note, between the Company and holder, due August 11, 2022 (incorporated by reference to Exhibit 4.4 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on February 14, 2020)
10.11		Paycheck Protection Program Loan Note between Digipath, Inc. and Cross River Bank, holder of the 1% Promissory Note due June 22, 2025 (incorporated by reference to Exhibit 10.5 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 14, 2020)
4.5		9% Secured Subordinated Convertible Note, between the Company and holder, due August 11, 2022 (incorporated by reference to Exhibit 4.5 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on May 15, 2020)
10.12		Separation and Release Agreement between Digipath, Inc. and Kyle Remenda, dated July 1, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on July 6, 2020)
4.6		Form of Amendment to 9% Secured Convertible Note, between the Company and holder, due August 10, 2022 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on January 6, 2021)
10.13		Amended and Restated 8% Secured Convertible Promissory Note, between Digipath, Inc. Digipath Labs, Inc., and Holder (Nordhaven, LLC) of the 8% Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on October 7, 2020)
4.7*		Description of Securities
10.14		Amended and Restated 8% Secured Convertible Promissory Note, between Digipath, Inc. Digipath Labs, Inc., and Holder (CSW Ventures, LP) of the 8% Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. October 7, 2020)
10.1		2012 Stock Incentive Plan (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on March 9, 2012)
10.15		Amended and Restated 8% Secured Convertible Promissory Note, between Digipath, Inc. Digipath Labs, Inc., and Holder (CSW Ventures, LP) of the 8% Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.3 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. October 7, 2020)
10.2		the Company Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on June 27, 2016)
10.16		Separation and Release Agreement between Digipath, Inc. and Kyle Remenda, dated July 1, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on July 6, 2020)
10.3		Form of Stock Option Grant Notice for grants under the Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on June 27, 2016)
10.17		12% Secured Promissory Note dated September 10, 2021 issued by Digipath, Inc. to US Canna Lab I, LLC (incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission by Digipath, Inc. on December 29, 2021)
10.4		Form of Option Agreement for grants under the Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on June 27, 2016)
10.18		Consulting, Confidentiality and Proprietary Rights Agreement between Digipath, Inc. and Duck’s Nest Investments, Inc., wholly-owned by A. Stone Douglass, dated September 1, 2021. (incorporated by reference to Exhibit 10.18 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission by Digipath, Inc. on December 29, 2021)
10.5		Security Agreement, between the Company Digipath Labs, Inc., and collateral agent for the holders of the 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on November 21, 2018)
10.19		Asset Purchase Agreement between Digipath, Inc., Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023 (incorporated by reference to Exhibit 2.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 2, 2023)
10.6		Security Agreement, between the Company Digipath Labs, Inc., and holder of the 8% Secured Convertible Note due September 23, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on September 26, 2019)
10.20		Management Services Agreement between Digipath, Inc., Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023(incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 2, 2023)
10.7		Security Agreement, between the Company, Digipath Labs, Inc., and holder of the 9% Senior Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on February 14, 2020)
21.1		Subsidiaries (incorporated by reference to the list of subsidiaries in Note 1 to the financial statements included in this Annual Report on Form 10-K)
10.8		Security Agreement, between the Company, Digipath Labs, Inc., and holder of the 9% Senior Secured Convertible Note due August 11, 2022 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on February 14, 2020)
31.1*		Section 302 Certification of Principal Executive Officer
10.9		Security Agreement, between the Company, Digipath Labs, Inc., and holder of the 9% Senior Secured Convertible Note due August 11, 2022 (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on May 15, 2020)
31.2*		Section 302 Certification of Principal Financial Officer
32.1*		Section 906 Certification of Principal Executive Officer
32.2*		Section 906 Certification of Principal Financial Officer
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

10.10		Paycheck Protection Program Loan Note between Digipath Labs, Inc. and WebBank, holder of the 1% Promissory Note due May 13, 2025 (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on August 14, 2020)
10.11		Paycheck Protection Program Loan Note between the Company and Cross River Bank, holder of the 1% Promissory Note due June 22, 2025 (incorporated by reference to Exhibit 10.5 of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on August 14, 2020)
10.12		Separation and Release Agreement between the Company and Kyle Remenda, dated July 1, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on July 6, 2020)
10.13		Amended and Restated 8% Secured Convertible Promissory Note, between the Company Digipath Labs, Inc., and Holder (Nordhaven, LLC) of the 8% Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on October 7, 2020)
10.14		Amended and Restated 8% Secured Convertible Promissory Note, between the Company Digipath Labs, Inc., and Holder (CSW Ventures, LP) of the 8% Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company October 7, 2020)
10.15		Amended and Restated 8% Secured Convertible Promissory Note, between the Company Digipath Labs, Inc., and Holder (CSW Ventures, LP) of the 8% Secured Convertible Note due August 10, 2022 (incorporated by reference to Exhibit 10.3 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company October 7, 2020)
10.16		Separation and Release Agreement between the Company and Kyle Remenda, dated July 1, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on July 6, 2020)
10.17		12% Secured Promissory Note dated September 10, 2021 issued by the Company to US Canna Lab I, LLC (incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission by the Company on December 29, 2021)
10.18		Consulting, Confidentiality and Proprietary Rights Agreement between the Company and Duck’s Nest Investments, Inc., wholly-owned by A. Stone Douglass, dated September 1, 2021. (incorporated by reference to Exhibit 10.18 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission by the Company on December 29, 2021)
10.19		Asset Purchase Agreement between the Company, Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023 (incorporated by reference to Exhibit 2.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on May 2, 2023)
10.20		Management Services Agreement between the Company, Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on May 2, 2023)
10.21		Second Amended and Restated Secured Promissory Noted in the principal amount of $625,000, dated January 3, 2024, made by Invictus Wealth Group, LLC in favor of the Company (incorporated by reference to Exhibit 10.7 of the Report on Form 10-Q filed with the Securities and Exchange Commission by the Company on February 14, 2024)
10.22		Securities Purchase Agreement between the Company and A. Stone Douglass, dated December 10, 2024 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by the Company on December 16, 2024)
21.1		Subsidiaries (incorporated by reference to the list of subsidiaries in Note 1 to the financial statements included in this Annual Report on Form 10-K)
31.1*		Section 302 Certification of Principal Executive Officer and Principal Financial Officer
32.1**		Section 906 Certification of Principal Executive Officer and Principal Financial Officer
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

* Filed herewith.

** Furnished herewith.

ITEM 16. FORM 10-K SUMMARY.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DIGIPATH, INC. (Registrant) By: /s/ Todd Denkin Todd Denkin President

	Hypha Labs, INC.
	(Registrant)

	By:	/s/ A. Stone Douglass
		A. Stone Douglass
		Chairman, President, Chief Executive Officer, Chief Financial Officer and Secretary (Principal Executive Officer and Principal Financial/Accounting Officer)

	Dated:	January 13, 2025

Dated: January 16, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant, and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Todd Denkin	President	January 16, 2024
/s/ A. Stone Douglass	Chairman, President, Chief Executive Officer, Chief Financial Officer and Secretary	January 13, 2025
Todd Denkin	(Principal Executive Officer)
A. Stone Douglass	(Principal Executive Officer and Principal Financial/Accounting Officer)
/s/ A. Stone Douglass	Chief Financial Officer, Secretary Director and Chairman	January 16, 2024
/s/ Dennis Hartmann	Director	January 13, 2025
A. Stone Douglass	(Principal Financial Officer and Principal Accounting Officer)
/s/ Dennis Hartmann	Director	January 16, 2024
Dennis Hartmann

2756

Filing Compare · Hypha Labs, Inc.