Hypha Labs Reports No Revenue and Increased Losses in Latest 10-Q Filing

Hypha Labs, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending December 31, 2024. The company recorded no revenues during this period, a stark contrast to the $923,154 generated in the same quarter of the previous year. The operating loss for the quarter was $1.3 million, compared to a loss of $70,564 in the prior year, reflecting a substantial increase in operating expenses, which rose to $1.3 million from $70,564. This increase was primarily attributed to heightened general and administrative costs, including a notable stock-based compensation expense related to the issuance of Series C Preferred shares.

The company underwent a strategic transformation following the sale of its subsidiary, Digipath Labs, on February 20, 2024. This sale marked a significant shift in Hypha Labs' business model, transitioning from a cannabis testing laboratory to focusing on the development of a new product line, specifically the Hypha Micropearl bioreactor. This bioreactor is designed to facilitate the home production of nutritionally beneficial mushrooms. The company aims to complete the design and testing of this product over the next nine months, with plans to enter commercial manufacturing by the end of 2025.

Operationally, Hypha Labs reported a negative working capital of $1.3 million and an accumulated deficit of $21.9 million as of December 31, 2024. The company had cash reserves of only $36,583, raising concerns about its ability to sustain operations. The filing indicated that the company is actively seeking additional capital to fund the development and launch of its new bioreactor product. The company plans to explore equity or debt financing options, including a potential Regulation A offering, to support its business objectives.

In terms of stockholder equity, Hypha Labs had 126,546,825 shares of common stock outstanding as of February 14, 2025. The company also reported a significant increase in its employee headcount, reflecting its shift in focus and the need for additional personnel to support its new business direction. The filing noted that the company is not classified as a shell company and is considered a smaller reporting company under SEC regulations.

Looking ahead, Hypha Labs faces considerable uncertainty regarding its ability to continue as a going concern. The management has acknowledged the challenges posed by its financial position and the need for successful execution of its new business strategy. The company’s future performance will depend on its ability to secure funding, successfully develop its new product, and ultimately generate revenue from its operations.