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Digipath, Inc. Announces Second Fiscal Quarter 2017 Results Highlighting 252% Increase in Revenue

LAS VEGAS, May 12, 2017 /PRNewswire/ -- Digipath, Inc. (DIGP), a growth oriented independent testing laboratory and media firm focused on the developing cannabis market, today announced financial and operating results for the three and six months ended March 31, 2017.

DigiPath, Inc., through its subsidiary, DigiPath, Corp., creates and markets innovative and reliable digital pathology solutions that empower private and academic institutions with the ability to create, store, manage, analyze, and correlate data collected through virtual microscopy. DigiPath, Inc. digital pathology portfolio includes PathScope(TM), PathCloud(TM), PathReview(TM), and PathConsult(TM) digital platforms to share and store archive tissue images. DigiPath, Inc. is expanding into new lines of business associated with the research, development, licensing and operation of botanical and nutrapharmaceutical products and services. (PRNewsFoto/Digipath, Inc.)

Second Fiscal Quarter 2017 Company Highlights

  • Ended quarter debt free with $429,425 of working capital, including $277,560 of cash on hand
  • Ended quarter with $497,049 of net sales, a quarter over quarter growth rate of approximately 21% from the previous quarter's net sales of $409,751, and a 252% increase on a year over year basis
  • Reduced our net loss by 50% over the comparative quarter, or $(222,597), from $(446,197) for the comparative three months ended March 31, 2016 to $(223,600) for the three months ended March 31, 2017, and improved our net loss for the first half of the fiscal year by $1,829,298, from $(2,179,058) for the comparative six months ended March 31, 2016 to $(349,760) for the six months ended March 31, 2017
  • Our Adjusted EBITDA for the quarter was $(58,428), compared to Adjusted EBITDA of $(86,637) for the previous fiscal quarter, an improvement of approximately 33% on a quarter over quarter basis
  • Our Adjusted EBITDA for the six months ended March 31, 2017 was $(145,065), compared to Adjusted EBITDA of $(624,337) for the comparative six months ended March 31, 2016, an improvement of approximately 77% on a year over year basis

The table below shows the preliminary results and key metrics (revenue data pertains to our Nevada lab operations only):

Quarterly Data

Quarterly Data

FYE September 30, 2016

FYE September 30, 2017

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Revenues (Thousands)







Lab Revenue Growth (%YOY)







Gross Profit Margins (%)







Return on Equity (%)







Return on Assets (%)








Adjusted EBITDA

We define Adjusted EBITDA as net earnings (loss) before (i) other income (expense), (ii) interest income, (iii) interest expense, (iv) bad debts, (v) depreciation and amortization, (vi) impairment of development costs, (vii) non-cash expenses relating to share based payments recognized under ASC Topic 718, (viii) gain on early extinguishment of debt, and (ix) equity in losses of unconsolidated entity. 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:




For the Three Months Ended

For the Six Months Ended

March 31,

March 31,





Net loss

$       (223,600)

$       (446,197)

$       (349,760)

$    (2,179,058)

Add back:

Other income





Interest income





Bad debts expense





Depreciation and amortization





Stock based compensation





Gain on early extinguishment of debt





Equity in losses of unconsolidated entity





Adjusted EBITDA

$         (58,428)

$       (257,767)

$       (145,065)

$       (624,337)

Management Comment

"Our results for the second fiscal quarter of 2017 show continued strong growth on both a quarter over quarter and year over year basis, as our cannabis testing operations in Las Vegas continue to increase. We are extremely pleased with the growth of our operations at this early stage. We believe we are at the forefront of the industry as we expand our operations to meet the increased demands that should follow the implementation of recreational marijuana laws that become effective in Nevada on July 1, 2017. Our ability to get to this stage of development debt-free with some of the best equipment in the industry has given us a significant advantage over our competitors. Our Nevada operations have created a sound blueprint for our expansion into other markets as we actively seek opportunities in favorable markets such as California and Florida," explains Digipath CEO, Joe Bianco.

About Digipath, Inc. (DIGP)

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

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.

Harrison Phillips
Viridian Capital Advisors, LLC
(212) 209-3086

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