Digipath, Inc. (DIGP) Announces Results for the Fiscal First Quarter 2020, Revenues Grow 26%

– Digipath, Inc. (DIGP) (“DIGP” or the “Company”), a service-oriented independent analytical testing laboratory, data analytics and technology firm focused on the cannabis and hemp markets, today announced results for the three months ended December 31, 2019, which includes a 26% increase in revenue to $808,930 for the first quarter of 2020, compared to $642,115 in the first quarter of 2019, and gross profit of $403,449, which rose approximately 152% over the comparative quarter in 2019.

First Fiscal Quarter 2020 Company Highlights

• The Company made continued progress on the development of our SabIR device, which is our fully-integrated NIR spectrometer that will enable instant field testing for THC, CBD and CBG markers in the field
• Purchased a new Triple Quad 6500+ at the end of the quarter, which we expect will generate significant productivity improvements and cost savings once placed in service during the second fiscal quarter of 2020
• First quarter revenues increased by $166,815, or 26%, on a year-over-year basis
• Gross margins increased to 50%, from 25% in the prior year’s first fiscal quarter, as the Company improved processes to become more efficient
• Adjusted EBITDA improved by $205,200 on a year over year basis, as the first quarter of 2020 was ($46,994), compared to Adjusted EBITDA of ($252,194) for the comparative fiscal quarter ending December 31, 2018
• Net loss decreased to $220,427, compared to $462,174 for the comparative quarter ending December 31, 2018, an improvement of $241,747, or 52%

The full quarterly filing can be found on our website: Digipath SEC Filings

Management Comment

Kyle Remenda, Digipath’s President and CEO, commented, “We continued to realize revenue growth and improved margins in our first fiscal quarter of 2020, and have been making significant strides to diversify our business units to take advantage of the scientific data we’ve compiled. I am very excited about the development of our Tru-Hemp ID Kit and SabIR handheld devices, and hope to be able to bring them to market in the current year all while continuing to improve the operations of our core asset.”

The table below shows the interim results and key metrics:

Adjusted EBITDA

We define Adjusted EBITDA as net earnings (loss) before (i) other income (expense), (ii) interest expense, (iii) bad debts, (iv) depreciation and amortization, (v) non-cash expenses relating to share-based payments recognized under ASC Topic 718, and (vi) amortization of debt discounts. We believe the use of this non-GAAP financial measure provides useful information to investors regarding our current financial performance; however, Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements. Specifically, we believe Adjusted EBITDA results provide useful information to both management and investors by excluding certain income and expenses that our management believes are not indicative of our core operating results, we believe that non-GAAP financial measures have limitations and do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that Adjusted EBITDA should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. A reconciliation of Adjusted EBITDA to net loss is included below:

About Digipath, Inc. (DIGP)

Digipath, Inc., supports the cannabis industry’s best practices for reliable testing, data acquisition, formulations, and new canna-tech to the cannabis industry.

Digipath Labs provides pharmaceutical-grade analysis and testing to the cannabis industry to ensure producers, consumers and patients know exactly what is in the cannabis they ingest and to help maximize the quality of its client’s products through analysis, research, development, and standardization.

Information about Forward-Looking Statements

This press release contains “forward-looking statements” that include information relating to future events. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in, or suggested by, the forward-looking statements. Important factors that could cause these differences include, but are not limited to: the Company’s need for additional funding, the demand for the Company’s products, governmental regulation of the cannabis industry, the Company’s ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company’s liquidity and financial strength to support its growth, and other risks that may be detailed from time-to-time in the Company’s filings with the United States Securities and Exchange Commission. For a more detailed description of the risk factors and uncertainties affecting Digipath, please refer to the Company’s recent Securities and Exchange Commission filings, which are available at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.