DIGP - Digipath Announces Results for the Fiscal Third Quarter 2019 Revenues Grow 25% Year Over Year

LAS VEGAS, Aug. 13, 2019 /PRNewswire/ -- Digipath, Inc. (OTCQB: DIGP) ("DIGP" or the "Company"), a service-oriented independent testing laboratory, data analytics and formulation firm focused on the developing cannabis and hemp markets, today announced results for the three and nine months ended June 30, 2019, which includes a 25% increase in revenue to $652,920 for the third quarter of 2019 compared to $521,772 in the third quarter of 2018, and gross profit of $228,853, which rose approximately 35% over the comparative quarter in 2018. 

Third Fiscal Quarter 2019 Company Highlights

• The Company made progress on the development of GroSciences' Tru-Hemp ID Kit, which is intended to address the needs of both law enforcement and cultivators
• The Company continued its development of a proprietary, plant-derived pesticide control agent and pesticide for cannabis and hemp applications
• Third quarter revenues increased by $131,148, or 25%, on a year-over-year basis
• Gross margins increased to 35%, from 0.2% in the prior year's third fiscal quarter, as the Company sourced better pricing on consumable lab supplies and improved processes to become more efficient
• Ended the period with $378,175 of working capital, including $286,365 of cash

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

Management Comment

Todd Denkin, Digipath's President and CEO, commented, "We continued to realize revenue growth in our third fiscal quarter of 2019, and were able to successfully improve our gross margins. The Company also made significant progress in its efforts to become a leading 'canna-tech' company with diversified service offerings within a number of attractive cannabis-related verticals. This expansion follows the launch of GroSciences in our first quarter to help cannabis producers with terpene formulations and R&D. We have also taken steps to protect our intellectual property by filing provisional patent applications related to terpene science for beer, pesticides and genetic identifiers. We look forward to further growth as we continue our expansion initiatives in both hemp and cannabis testing labs," added Denkin.

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. (OTCQB: DIGP)

Digipath, Inc., supports the cannabis industry's best practices for reliable testing, data acquisition, cannabis education and training, and brings unbiased cannabis news coverage 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.

GroSciences was launched by Digipath to capitalize on the extensive data collected by it from cannabis through the testing process. GroSciences plans to develop and license specific formulations to other producers and product makers in the industry, and to market and sell its "Tru-Hemp ID" Kit which distinguishes industrial hemp from drug-type cannabis and other canna-tech products.

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.

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SOURCE Digipath, Inc.