Digipath Announces Results for Second Fiscal Quarter 2021

Achieves First Profitable Quarter in Its History and Sees Significant Revenue Growth, Compared to the First Fiscal Quarter

LAS VEGAS, NV, May 18, 2021 (GLOBE NEWSWIRE) —  via NewMediaWire – Digipath, Inc. (OTCQB: DIGP) (“DIGP” or the “Company”), a service-oriented independent analytical testing laboratory company focused on the cannabis and hemp markets, announced results for the three and six month periods ending March 31, 2021, which includes net income of $18,201 for the second quarter versus a loss of $609,143 for the same period in 2020. Revenue also improved to $633,160 for the second fiscal quarter of 2021, compared to $500,385 for the first fiscal quarter of 2021.

“Starting this February, we have seen a substantial increase in the flow of samples for testing and this trend is continuing as we enter our third quarter. As Las Vegas tourism began to return and Covid-19 subsided, we acquired several new clients in the first quarter and we believe this trend will continue,” said Bruce Raben, Digipath’s Chairman.

Second Fiscal Quarter 2021 Company Highlights

• Tourism began to return during the second fiscal quarter as the Covid-19 difficulties began to subside
• Despite the Covid-19 disruption, we were able to generate operating income for the three months ended March 31, 2021 of $2,620, compared to an operating loss of $594,270 for the three months ended March 31, 2020
• Second quarter revenues increased by $132,775, or 27%, compared to the first fiscal quarter. Net income for the second quarter was $18,201 compared with a net loss of $609,143 for the same period in 2020, and a net loss of $390,637 for the first quarter of this fiscal year
• Gross margins improved to 34.2% for the three months ended March 31, 2021, compared to 15.9% for the prior three months ended December 31, 2020, which generated an additional $136,745 of gross profit
• Adjusted EBITDA improved by $252,393 on a year over year basis 
• Our bottom line improved by $457,134 on a year over year basis as we work to achieve profitability

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

Management Comment

Todd Peterson, Digipath’s CFO, commented, “We did an exceptional job of dealing with the difficult macroeconomic forces presented by the Covid-19 pandemic. Not only were we able to continue operating through this difficult time, but we were able to control our costs and improve our financial position to the point where we were able to generate a profit during the recent quarter. We have seen month-to-month revenue gains over the last quarter that we anticipate will continue as Nevada’s tourism industry steadily recovers. We’ve worked hard to trim costs and become more efficient to position ourselves to come out of this stronger than ever.”

Key Metrics

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) change in allowance for doubtful accounts, (iv) depreciation and amortization, and (v) non-cash expenses relating to share-based payments recognized under ASC Topic 718. 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. (OTCQB: 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.

Contact: 
Digipath, Inc. 
702-527-2060