UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q



[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
Quarterly Period Ended March 31, 2019



or



[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the transition period from __________ to __________



Commission
File Number 000-54239







Digipath,
Inc.

(Exact
name of registrant issuer as specified in its charter)



|Nevada                                                                                                                  |  | 27-3601979                                                                                   
|----------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------
|(State
                                         or other jurisdiction of
        incorporation
        or organization) |  | (I.R.S.
                                         Employer
        Identification
        No.)
|                                                                                                                        |  |                                                                                              
|6450
    Cameron St Suite 113 Las Vegas, NV                                                                             |  | 89118                                                                                        
|(Address
    of principal executive offices)                                                                            |  | (zip
    code)                                                                               



(702)
527-2060

(Registrant’s
telephone number, including area code)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

|Yes
    [X] | No
    [  ]
|----------- | -----------



Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files).

|Yes
    [X] | No
    [  ]
|----------- | -----------



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



| | Large
    accelerated filer                                         | [  ] | Accelerated
    filer         | [  ]
| | ------------------------------------------------------------------- | ---- | ----------------------------- | ----
| | Non-accelerated
filer (Do not check if a smaller reporting company) | [  ] | Smaller
    reporting company | [  ]
| |                                                                     |      | Emerging
    growth company   | [X] 



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]



Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|Yes
    [  ] | No
    [X]
|------------ | ----------



Indicate
the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.



The
number of shares of registrant’s common stock outstanding as of May 13, 2019 was 47,659,716.



Securities registered pursuant to Section 12(b) of the
Act: None


















TABLE
OF CONTENTS



|                               | PageNo.
|------------------------------ | -------
|PART I - FINANCIAL INFORMATION |        
|ITEM
    1.                    |        
|                               |        
|                               |        
|                               |        
|                               |        
|                               |        
|ITEM
    2.                    |        
|ITEM
    3.                    |        
|ITEM
    4.                    |        
|PART II - OTHER INFORMATION    |        
|ITEM
    1.                    |        
|ITEM
    1A.                   |        
|ITEM
    2.                    |        
|ITEM
    3.                    |        
|ITEM
    4.                    |        
|ITEM
    5.                    |        
|ITEM
    6.                    |        
|                               |        











PART
I – FINANCIAL INFORMATION



ITEM
1. FINANCIAL STATEMENTS.



DIGIPATH,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                                   |  | March 31,   |             |   | September 30, |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | - | ------------- | -
|                                                                                                                                                                                                   |  | 2019        |             |   | 2018          |  
|                                                                                                                                                                                                   |  | (Unaudited) |             |   |               |  
|Assets                                                                                                                                                                                             |  |             |             |   |               |  
|Current assets:                                                                                                                                                                                    |  |             |             |   |               |  
|Cash                                                                                                                                                                                               |  | $           | 514,018     |   |               | $
|Accounts receivable, net                                                                                                                                                                           |  |             | 190,450     |   |               |  
|Other current assets                                                                                                                                                                               |  |             | 124,231     |   |               |  
|Note receivable                                                                                                                                                                                    |  |             | 95,000      |   |               |  
|Deposits                                                                                                                                                                                           |  |             | 25,647      |   |               |  
|Total current assets                                                                                                                                                                               |  |             | 949,346     |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Fixed assets, net                                                                                                                                                                                  |  |             | 829,712     |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Total Assets                                                                                                                                                                                       |  | $           | 1,779,058   |   |               | $
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Liabilities and Stockholders’ Equity                                                                                                                                                               |  |             |             |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Current liabilities:                                                                                                                                                                               |  |             |             |   |               |  
|Accounts payable                                                                                                                                                                                   |  | $           | 176,622     |   |               | $
|Accrued expenses                                                                                                                                                                                   |  |             | 63,601      |   |               |  
|Deferred revenues                                                                                                                                                                                  |  |             | 500         |   |               |  
|Total current liabilities                                                                                                                                                                          |  |             | 240,723     |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Convertible notes payable, net of discounts of $57,978 and $-0- at March 31, 2019 and September 30, 2018, respectively                                                                             |  |             | 442,022     |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Total Liabilities                                                                                                                                                                                  |  |             | 682,745     |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Stockholders’ Equity:                                                                                                                                                                              |  |             |             |   |               |  
|Series A convertible preferred stock, $0.001 par value, 10,000,000 shares authorized; 1,325,942 and 1,425,942 shares issued and outstanding at March 31, 2019 and September 30, 2018, respectively |  |             | 1,326       |   |               |  
|Common stock, $0.001 par value, 90,000,000 shares authorized; 47,609,716 and 42,245,364 shares issued and outstanding at March 31, 2019 and September 30, 2018, respectively                       |  |             | 47,610      |   |               |  
|Additional paid-in capital                                                                                                                                                                         |  |             | 15,111,344  |   |               |  
|Accumulated (deficit)                                                                                                                                                                              |  |             | (14,063,967 | ) |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Total Stockholders’ Equity                                                                                                                                                                         |  |             | 1,096,313   |   |               |  
|                                                                                                                                                                                                   |  |             |             |   |               |  
|Total Liabilities and Stockholders’ Equity                                                                                                                                                         |  | $           | 1,779,058   |   |               | $



See
accompanying notes to financial statements.



2







DIGIPATH,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                                   |  | For the Three Months Ended |            |   | For the Six Months Ended |  
|---------------------------------------------------------------------------------- |  | -------------------------- | ---------- | - | ------------------------ | -
|                                                                                   |  | March 31,                  |            |   | March 31,                |  
|                                                                                   |  | 2019                       |            |   | 2018                     |  
|                                                                                   |  |                            |            |   |                          |  
|Revenues                                                                           |  | $                          | 651,555    |   |                          | $
|Cost of sales                                                                      |  |                            | 427,830    |   |                          |  
|Gross profit (loss)                                                                |  |                            | 223,725    |   |                          |  
|                                                                                   |  |                            |            |   |                          |  
|Operating expenses:                                                                |  |                            |            |   |                          |  
|General and administrative                                                         |  |                            | 418,505    |   |                          |  
|Professional fees                                                                  |  |                            | 235,667    |   |                          |  
|Bad debts expense                                                                  |  |                            | 25,265     |   |                          |  
|Total operating expenses                                                           |  |                            | 679,437    |   |                          |  
|                                                                                   |  |                            |            |   |                          |  
|Operating loss                                                                     |  |                            | (455,712   | ) |                          |  
|                                                                                   |  |                            |            |   |                          |  
|Other income:                                                                      |  |                            |            |   |                          |  
|Other income                                                                       |  |                            | 22,250     |   |                          |  
|Interest expense                                                                   |  |                            | (18,003    | ) |                          |  
|Total other income                                                                 |  |                            | 4,247      |   |                          |  
|                                                                                   |  |                            |            |   |                          |  
|Net loss                                                                           |  | $                          | (451,465   | ) |                          | $
|                                                                                   |  |                            |            |   |                          |  
|Weighted average number of common shares outstanding - basic and fully
    diluted |  |                            | 45,919,662 |   |                          |  
|                                                                                   |  |                            |            |   |                          |  
|Net loss per share - basic and fully diluted                                       |  | $                          | (0.01      | ) |                          | $



See
accompanying notes to financial statements.



3







DIGIPATH,
INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY



|                                                           |  | Series A Convertible |           |   |              |   |       |         |  |  | Additional  |  |  |               |        |  | Total     |  
|---------------------------------------------------------- |  | -------------------- | --------- | - | ------------ | - | ----- | ------- |  |  | ----------- |  |  | ------------- | ------ |  | --------- | -
|                                                           |  | Preferred Stock      |           |   | Common Stock |   |       | Paid-in |  |  | Accumulated |  |  | Stockholders’ |       
|                                                           |  | Shares               |           |   | Amount       |   |       | Shares  |  |  | Amount      |  |  | Capital       |        |  | (Deficit) |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Balance, September 30, 2017                                |  |                      | 1,897,942 |   |              | $ | 1,898 |         |  |  | 35,027,118  |  |  | $             | 35,027 |  |           | $
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Units of common stock and warrants sold for cash           |  |                      | -         |   |              |   | -     |         |  |  | 2,158,934   |  |  |               | 2,159  |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Common stock issued for services                           |  |                      | -         |   |              |   | -     |         |  |  | 2,326,855   |  |  |               | 2,327  |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Common stock options issued for services                   |  |                      | -         |   |              |   | -     |         |  |  | -           |  |  |               | -      |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Conversion of preferred stock to common stock              |  |                      | (472,000  | ) |              |   | (472  | )       |  |  | 2,360,000   |  |  |               | 2,360  |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Cashless exercise of options and warrants                  |  |                      | -         |   |              |   | -     |         |  |  | 372,457     |  |  |               | 372    |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Net loss for the year ended September 30, 2018             |  |                      | -         |   |              |   | -     |         |  |  | -           |  |  |               | -      |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Balance, September 30, 2018                                |  |                      | 1,425,942 |   |              | $ | 1,426 |         |  |  | 42,245,364  |  |  | $             | 42,245 |  |           | $
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Common stock sold for cash                                 |  |                      | -         |   |              |   | -     |         |  |  | 3,125,000   |  |  |               | 3,125  |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Common stock issued for services                           |  |                      | -         |   |              |   | -     |         |  |  | 1,264,352   |  |  |               | 1,265  |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Common stock issued in exchange for termination of options |  |                      | -         |   |              |   | -     |         |  |  | 475,000     |  |  |               | 475    |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Common stock options issued for services                   |  |                      | -         |   |              |   | -     |         |  |  | -           |  |  |               | -      |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Conversion of preferred stock to common stock              |  |                      | (100,000  | ) |              |   | (100  | )       |  |  | 500,000     |  |  |               | 500    |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Beneficial conversion feature of convertible debts         |  |                      | -         |   |              |   | -     |         |  |  | -           |  |  |               | -      |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Net loss for the three months ended March 31, 2019         |  |                      | -         |   |              |   | -     |         |  |  | -           |  |  |               | -      |  |           |  
|                                                           |  |                      |           |   |              |   |       |         |  |  |             |  |  |               |        |  |           |  
|Balance, March 31, 2019 (Unaudited)                        |  |                      | 1,325,942 |   |              | $ | 1,326 |         |  |  | 47,609,716  |  |  | $             | 47,610 |  |           | $



See
accompanying notes to financial statements.



4







DIGIPATH,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                          |  | For the Six Months Ended |          
|----------------------------------------------------------------------------------------- |  | ------------------------ | ---------
|                                                                                          |  | March 31,                |          
|                                                                                          |  | 2019                     |          
|Cash flows from operating activities                                                      |  |                          |          
|Net loss                                                                                  |  | $                        | (913,639 
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                          |          
|Change in allowance for doubtful accounts                                                 |  |                          | 49,830   
|Depreciation and amortization expense                                                     |  |                          | 128,771  
|Stock issued for services                                                                 |  |                          | 210,615  
|Options and warrants granted for services                                                 |  |                          | 88,794   
|Amortization of debt discounts                                                            |  |                          | 12,986   
|Decrease (increase) in assets:                                                            |  |                          |          
|Accounts receivable                                                                       |  |                          | (72,546  
|Other current assets                                                                      |  |                          | (51,541  
|Increase (decrease) in liabilities:                                                       |  |                          |          
|Accounts payable                                                                          |  |                          | (149,242 
|Accrued expenses                                                                          |  |                          | 5,363    
|Deferred revenues                                                                         |  |                          | (25      
|Net cash provided by (used in) operating activities                                       |  |                          | (690,634 
|                                                                                          |  |                          |          
|Cash flows from investing activities                                                      |  |                          |          
|Purchase of fixed assets                                                                  |  |                          | (1,375   
|Advance of note receivable                                                                |  |                          | (95,000  
|Net cash used in investing activities                                                     |  |                          | (96,375  
|                                                                                          |  |                          |          
|Cash flows from financing activities                                                      |  |                          |          
|Proceeds from convertible notes                                                           |  |                          | 500,000  
|Proceeds from sale of common stock                                                        |  |                          | 625,000  
|Net cash provided by financing activities                                                 |  |                          | 1,125,000
|                                                                                          |  |                          |          
|Net increase in cash                                                                      |  |                          | 337,991  
|Cash - beginning                                                                          |  |                          | 176,027  
|Cash - ending                                                                             |  | $                        | 514,018  
|                                                                                          |  |                          |          
|Supplemental disclosures:                                                                 |  |                          |          
|Interest paid                                                                             |  | $                        | 4,066    
|Income taxes paid                                                                         |  | $                        | -        
|                                                                                          |  |                          |          
|Non-cash investing and financing activities:                                              |  |                          |          
|Value of preferred stock converted to common stock                                        |  | $                        | 100,000  
|Beneficial conversion feature of convertible notes payable                                |  | $                        | 70,964   



See
accompanying notes to financial statements.



5







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Note
1 – Organization, Basis of Presentation and Significant Accounting Policies



Organization



Digipath,
Inc. was incorporated in Nevada on October 5, 2010. Digipath, Inc. and its subsidiaries (“Digipath,” the “Company,”
“we,” “our” or “us”) is a service-oriented independent testing laboratory, data analytics
and media firm focused on the developing cannabis and hemp markets, and supports the cannabis industry’s best practices
for reliable testing, cannabis education and training. Our business units are described below.



| | Ø | Digipath
    Labs, Inc. Digipath Labs’ mission is to provide pharmaceutical-grade analysis and testing to the cannabis industry,
    under ISO-17025:2017 guidelines, to ensure consumers and patients know exactly what is in the cannabis they ingest and to
    help maximize the quality of our clients’ products through research, development, and standardization. Digipath has
    been operating a cannabis-testing lab in Nevada since 2015 and has plans to open labs in other states and countries that have
    legalized the sale of cannabis, beginning with California.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Ø | The
    National Marijuana News Corp. provides a balanced and unbiased approach to cannabis news, interviews and education with
    a news/talk podcast, national marijuana news website and social media presence focusing on the political, economic, medicinal,
    scientific, and cultural dimensions of the rapidly evolving—and profoundly controversial—medicinal and recreational
    marijuana industry.                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Ø | GroSciences,
    Inc. Launched during the first fiscal quarter of 2019 to capitalize on the extensive data we have collected from cannabis
    through the testing process. GroSciences plans to develop and license specific formulations to other producers and product
    makers in the industry.                                                                                                                                                                                                                                                                                  



Basis
of Presentation



The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted
in the United States of America (“GAAP”). Intercompany accounts and transactions have been eliminated.



The
unaudited condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report
on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Consolidated
Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial
Statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in
the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018. The interim Condensed Consolidated
Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented
are not necessarily indicative of the results that might be expected for the entire fiscal year.



Principles
of Consolidation



The
accompanying consolidated financial statements include the accounts of the following entities, all of which were under common
control and ownership at March 31, 2019:



|                         |  | Jurisdictionof |  |             
|------------------------ |  | -------------- |  | ------------
|Name
    of Entity(1)    |  | Incorporation  |  | Relationship
|Digipath,
    Inc.(2)    |  | Nevada         |  | Parent      
|Digipath
    Labs, Inc.  |  | Nevada         |  | Subsidiary  
|TNM
    News, Inc.       |  | Nevada         |  | Subsidiary  
|GroSciences,
    Inc.(3) |  | Colorado       |  | Subsidiary  
|Digipath Labs S.A.S.(4)  |  | Colombia       |  | Subsidiary  



(1)All entities are in the form of a corporation.

(2)Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by Digipath,
Inc., the parent company.

(3)Commenced operations during the first fiscal quarter of 2019, but has not incurred income to date.



(4)Formed during the first
fiscal quarter of 2019, but has not yet commenced operations.



The
consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant
inter-company transactions have been eliminated in the preparation of these financial statements. The parent company and subsidiaries
will be collectively referred to herein as the “Company”, “Digipath” or “DIGP”. The Company’s
headquarters are located in Las Vegas, Nevada and substantially all of its customers are within the United States.



6







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



These
statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary
for fair presentation of the information contained therein.



Segment
Reporting



ASC
Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting.
The management approach model is based on the way a company’s management organizes segments within the company for making
operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure
requirements as it expands its operations.



Fair
Value of Financial Instruments



Under
FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted
accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant
measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements
as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses reported on the
balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments.



Revenue
Recognition



Effective
January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes
revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following
steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the
transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue
when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be
reported under ASC 606 — Revenue Recognition. Under ASC 606, revenue is recognized when the following criteria are met:
(1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has
occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably
assured.



There
was no impact on the Company’s financial statements as a result of adopting ASC 606 for the six months ended March 31, 2019,
or the twelve months ended September 30, 2018.



Revenue
is primarily generated through our subsidiary, Digipath Labs, Inc., which recognizes revenue from the analytical testing of cannabis
products to licensed producers and cultivators within the state of Nevada on a determinable fixed fee per test, or panel of tests
basis. Revenue from the performance of those services is recognized upon completion of the tests, at which time test results are
delivered to the customer, provided collectability of the fee is reasonably assured. We typically require payment within thirty
days of the delivery of results. Management estimates an allowance for doubtful accounts based on the aging of its receivables.



The
Company also recognizes revenue through our subsidiary, TNM News Corp., which primarily recognizes revenue from advertisements
through partnered merchants. Payment for ad revenues are received prior to the distribution of the ad campaign, and the revenues
are recognized ratably over the campaign. The Company defers any revenue for which the term of the campaign has not yet been realized.
To date, these revenues have not been materially significant.



Stock-Based
Compensation



The
Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC
718) and Equity-Based Payments to Non-employees pursuant to ASC 505-50 (ASC 505-50). All transactions in which goods or services
are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the
fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete
or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently
large disincentives for nonperformance.



Recent
Accounting Pronouncements



In
August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2018-13, Fair Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,
which modify the disclosure requirements of Topic 820. The new guidance is effective for all entities for annual periods, and
interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. The Company does
not expect the adoption of this ASU to have a material impact on its consolidated financial statements.



7







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize assets and liabilities
for most leases. ASU 2016-02 is effective for public entity financial statements for annual periods beginning after December 15,
2018, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. ASU
2016-02 was further clarified and amended within ASU 2018-01, ASU 2018-10, ASU 2018-11 and ASU 2018-20 which included provisions
that would provide us with the option to adopt the provisions of the new guidance using a modified retrospective transition approach,
without adjusting the comparative periods presented. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated
financial statements.



There
are no other recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material
effect on its financial position, results of operations, or cash flows.



Note
2 – Going Concern



As
shown in the accompanying condensed consolidated financial statements, the Company has incurred recurring losses from operations
resulting in an accumulated deficit of $14,063,967, and as of March 31, 2019, the Company’s cash on hand may not
be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a
going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is currently seeking
additional sources of capital to fund short term operations. Management believes these factors will contribute toward achieving
profitability. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.



The
consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the
Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be
necessary should the Company be unable to continue as a going concern.



8







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Note
3 – Fair Value of Financial Instruments



Under
FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation
framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements
and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50
details the disclosures that are required for items measured at fair value.



The
Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial
assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:



Level
1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability
to access at the measurement date.



Level
2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar
assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability
(e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market
data by correlation or other means (market corroborated inputs).



Level
3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset
or liability.



9







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



The
following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets
as of March 31, 2019 and September 30, 2018, respectively:



|                                                       |  | Fair Value Measurements at March 31, 2019 |        
|------------------------------------------------------ |  | ----------------------------------------- | -------
|                                                       |  | Level 1                                   |        
|Assets                                                 |  |                                           |        
|Cash                                                   |  | $                                         | 514,018
|Total assets                                           |  |                                           | 514,018
|Liabilities                                            |  |                                           |        
|Convertible notes payable, net of discounts of $57,978 |  |                                           | -      
|Total liabilities                                      |  |                                           | -      
|                                                       |  | $                                         | 514,018



|                  |  | Fair Value Measurements at September 30, 2018 |        
|----------------- |  | --------------------------------------------- | -------
|                  |  | Level 1                                       |        
|Assets            |  |                                               |        
|Cash              |  | $                                             | 176,027
|Total assets      |  |                                               | 176,027
|Liabilities       |  |                                               |        
|Total liabilities |  |                                               | -      
|                  |  | $                                             | 176,027



The
fair value of our intellectual properties are deemed to approximate book value, and are considered Level 3 inputs as defined by
ASC Topic 820-10-35.



Level
3 liabilities consist of a total of $442,022 of convertible debentures, net of discounts of $57,978 as of March 31, 2019.



There
were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the six months ended March
31, 2019 or the year ended September 30, 2018.



Note
4 – Note Receivable



On
March 8, 2019 and February 15, 2019, we loaned Big Valley Analytical Labs, Inc. $25,000 and $20,000, respectively. The loans bear
interest at an annual rate of 15%, are evidenced by secured demand notes, and are secured by a lien on the borrower’s
assets. The principal was subsequently repaid in full on April 1, 2019.



On
December 28, 2018, we loaned Northwest Analytical Labs, Inc. $50,000. The loan bears interest at an annual rate of 10%, is evidenced
by a secured demand note, which is secured by a lien on the borrower’s assets.



Note
5 – Accounts Receivable



Accounts
receivable was $190,450 and $167,734 at March 31, 2019 and September 30, 2018, respectively, net of allowance for doubtful accounts
of $64,730 and $14,900 at March 31, 2019 and September 30, 2018, respectively.



10







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Note
6 – Fixed Assets



Fixed
assets consist of the following at March 31, 2019 and September 30, 2018:



|                               |  | March 31, |           |   | September 30, |  
|------------------------------ |  | --------- | --------- | - | ------------- | -
|                               |  | 2019      |           |   | 2018          |  
|Software                       |  | $         | 123,492   |   |               | $
|Office equipment               |  |           | 56,252    |   |               |  
|Furniture and fixtures         |  |           | 28,486    |   |               |  
|Lab equipment                  |  |           | 1,110,930 |   |               |  
|Leasehold improvements         |  |           | 489,147   |   |               |  
|                               |  |           | 1,808,307 |   |               |  
|Less: accumulated depreciation |  |           | (978,595  | ) |               |  
|Total                          |  | $         | 829,712   |   |               | $



Depreciation
and amortization expense totaled $128,771 and $141,696 for the six months ended March 31, 2019 and 2018, respectively.



Note
7 – Convertible Notes Payable



Convertible
notes payable consist of the following at March 31, 2019 and September 30, 2018, respectively:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | March 31, |         |   | September 30, |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ------- | - | ------------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2019      |         |   | 2018          |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |           |         |   |               |  
|On November 8, 2018, the Company received proceeds of $350,000 on a senior secured convertible note that carries an 8% interest rate, which matures on December 31, 2020. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.14 per share. The Company’s obligations under this Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs, Inc. A total of $4,066 of interest was repaid during the six months ended March 31, 2019. |  | $         | 350,000 |   |               | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |           |         |   |               |  
|On November 5, 2018, the Company received proceeds of $150,000 on a senior secured convertible note that carries an 8% interest rate, which matures on December 31, 2020. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.14 per share. The Company’s obligations under this Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs, Inc.                                                                                      |  |           | 150,000 |   |               |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |           |         |   |               |  
|Total convertible notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |           | 500,000 |   |               |  
|Less: unamortized debt discounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |           | (57,978 | ) |               |  
|Convertible notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $         | 442,022 |   |               | $



In
addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible notes by allocating
a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the
feature was calculated on the commitment date using the effective conversion price of the convertible notes. This intrinsic value
is limited to the portion of the proceeds allocated to the convertible debt.



The
aforementioned accounting treatment resulted in a total debt discount equal to $70,964 during the six months ended March 31, 2019.
The discount is amortized on a straight-line basis from the dates of issuance until the earlier of the stated redemption
date of the debts, as noted above or the actual settlement date. During the six months ended March 31, 2019, the Company recorded
debt amortization expense in the amount of $12,986, attributed to the aforementioned debt discount.



All
of the convertible notes limit the maximum number of shares that can be owned by each note holder as a result of the conversions
to common stock to 4.99% of the Company’s issued and outstanding shares.



The
Company recorded interest expense pursuant to the stated interest rates on the convertible notes in the amount of $15,770 for
the six months ended March 31, 2019.



11







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Note
8 - Changes in Stockholders’ Equity



Convertible
Preferred Stock



The
Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share, of which 6,000,000 have
been designated as Series A Convertible Preferred Stock (“Series A Preferred”), with the remaining 4,000,000 shares
available for designation from time to time by the Board as set forth below. As of March 31, 2019, there were 1,325,942 shares
of Series A Preferred issued and outstanding. The Board of Directors is authorized to determine any number of series into which
the undesignated shares of preferred stock may be divided and to determine the rights, preferences, privileges and restrictions
granted to any series of the preferred stock. Each share of Series A Preferred is currently convertible into five shares of common
stock.



The
conversion price is adjustable in the event of stock splits and other adjustments in the Company’s capitalization, and in
the event of certain negative actions undertaken by the Company. At the current conversion price, the 1,325,942 shares of Series
A Preferred outstanding at March 31, 2019 are convertible into 6,629,710 shares of the common stock of the Company. No holder
is permitted to convert its shares of Series A Preferred if such conversion would cause the holder to beneficially own more than
4.99% of the issued and outstanding common stock of the Company immediately after such conversion, unless waived by such holder
by providing at least sixty-five days’ notice.



Preferred
Stock Conversions



On
December 31, 2018, a total of 100,000 Series A Preferred shares were converted into 500,000 shares of common stock. The stock
was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.



Common
Stock



Common
stock consists of $0.001 par value, 90,000,000 shares authorized, of which 47,609,716 shares were issued and outstanding as of
March 31, 2019.



Common
Stock Sales



On
February 7, 2019, the Company sold 1,000,000 shares of its common stock in exchange for proceeds of $200,000.



On
February 1, 2019, the Company sold 250,000 shares of its common stock in exchange for proceeds of $50,000.



On
January 31, 2019, the Company sold 625,000 shares of its common stock in exchange for proceeds of $125,000.



On
January 24, 2019, the Company sold 1,250,000 shares of its common stock in exchange for proceeds of $250,000.



Common
Stock Issued for Services



On March 29, 2019, the Company issued 475,000
shares of common stock to the estate of our former CEO in exchange for the cancellation of 4,750,000 common stock options. The
aggregate fair value of the options exceeded the fair value of the common stock at issuance, therefore there was no additional
expense as a result of the modification of the equity awards.





On
March 25, 2019, the Company issued 29,268 shares of common stock to its President and CEO for services rendered pursuant to his
employment agreement. The aggregate fair value of the common stock was $6,000 based on the closing price of the Company’s
common stock on the date of grant, and was expensed over the requisite service period.



On
March 25, 2019, the Company issued 73,171 shares of common stock to its CFO for services rendered pursuant to his employment agreement.
The aggregate fair value of the common stock was $15,000 based on the closing price of the Company’s common stock on the
date of grant, and was expensed over the requisite service period.



On
March 25, 2019, a total of 50,000 shares of common stock were issued to a consultant that was engaged to assist the Company with
acquisition activities. The fair value of the common stock was $10,250 based on the closing price of the Company’s common
stock on the date of grant, and was expensed over the requisite service period.



On
February 25, 2019, a total of 50,000 shares of common stock were issued to a consultant that was engaged to assist the Company
with acquisition activities. The fair value of the common stock was $12,300 based on the closing price of the Company’s
common stock on the date of grant, and was expensed over the requisite service period.



12







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



On
January 25, 2019, a total of 50,000 shares of common stock were issued to a consultant that was engaged to assist the Company
with acquisition activities. The fair value of the common stock was $10,500 based on the closing price of the Company’s
common stock on the date of grant, and was expensed over the requisite service period.



On
December 25, 2018, the Company issued 46,261 shares of common stock to its President and CEO for services rendered pursuant to
his employment agreement. The aggregate fair value of the common stock was $6,000 based on the closing price of the Company’s
common stock on the date of grant, and was expensed over the requisite service period.



On
December 25, 2018, the Company issued 115,652 shares of common stock to its CFO for services rendered pursuant to his employment
agreement. The aggregate fair value of the common stock was $15,000 based on the closing price of the Company’s common stock
on the date of grant, and was expensed over the requisite service period.



On
December 25, 2018, a total of 150,000 shares of common stock were issued to three consultants that were engaged to assist the
Company with acquisition activities. The aggregate fair value of the common stock was $19,455 based on the closing price of the
Company’s common stock on the date of grant, and was expensed over the requisite service period.



On
November 25, 2018, a total of 150,000 shares of common stock were issued to three consultants that were engaged to assist the
Company with acquisition activities. The aggregate fair value of the common stock was $24,000 based on the closing price of the
Company’s common stock on the date of grant, and was expensed over the requisite service period.



On
October 30, 2018, the Company issued 400,000 shares of common stock to another consultant for business development services to
be performed from November 1, 2018 through April 30, 2019. The fair value of the common stock was $54,120 based on the closing
price of the Company’s common stock on the date of grant, and is being expensed over the requisite service period.



On
October 25, 2018, a total of 150,000 shares of common stock were issued to three consultants that were engaged to assist the Company
with acquisition activities. The aggregate fair value of the common stock was $23,250 based on the closing price of the Company’s
common stock on the date of grant, and was expensed over the requisite service period.



Amortization
of Stock-Based Compensation



A
total of $14,740 of stock-based compensation expense was recognized during the six months ended March 31, 2019 as a result of
the issuance of 200,000 shares of common stock to one of our directors, Bruce Raben, on September 12, 2018, as amortized over
the requisite service period. As of March 31, 2019, a total of $14,822 of unamortized expenses are expected to be expensed during
the remaining fiscal year ended September 30, 2019.



A
total of $88,794 of stock-based compensation expense was recognized from the amortization of options over their vesting period
during the six months ended March 31, 2019.



Note
9 – Common Stock Options



Stock
Incentive Plan



On
June 21, 2016, we amended and restated our 2012 Stock Incentive Plan (the “2012 Plan”), which was originally adopted
on March 5, 2012 and previously amended on May 20, 2014. As amended, the 2012 Plan provides for the issuance of up to 11,500,000
shares of common stock pursuant to the grant of options or other awards, including stock grants, to employees, officers or directors
of, and consultants to, the Company and its subsidiaries. Options granted under the 2012 Plan may either be intended to qualify
as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over
periods not exceeding ten years from date of grant.



A
total of 5,105,000 options were outstanding as of March 31, 2019. During the six months ended March 31, 2019, options to purchase
an aggregate total of 27,500 shares of common stock at a weighted average exercise price of $0.26 per share expired.



13









DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Options
Issued to Officers and Directors for Services





On January 7, 2019, we granted options to
purchase 500,000 shares of common stock as compensation for services to our Chief Science Officer. The options vest immediately
as to 125,000 shares and as to an additional 125,000 shares on each of April 7, 2019, July 7, 2019, and October 7, 2019, and are
exercisable for a ten-year period at an exercise price of $0.13 per share, based on the most recent closing stock price. The estimated
value using the Black-Scholes Pricing Model, based on a volatility rate of 107% and a call option value of $0.1019, was $50,934.
The options are being expensed over the vesting period, resulting in $15,485 of stock-based compensation expense during the
six months ended March 31, 2019. As of March 31, 2019, a total of $35,449 of unamortized expenses are expected to be expensed
over the vesting period.





On January 7, 2019, we granted options
to purchase 500,000 shares of common stock as compensation for services to Bruce Raben, one of our directors.
The options vest immediately as to 125,000 shares and as to an additional 125,000 shares on each of April 7, 2019, July 7,
2019, and October 7, 2019, and are exercisable for a ten-year period at an exercise price of $0.13 per share. The estimated
value using the Black-Scholes Pricing Model, based on a volatility rate of 107% and a call option value of $0.1019, was
$50,934. The options are being expensed over the vesting period, resulting in $15,485 of stock-based compensation expense
during the six months ended March 31, 2019. As of March 31, 2019, a total of $35,449 of unamortized expenses are expected to
be expensed over the vesting period.





Options Exchanged for Common Stock



On March 29, 2019, the Company issued 475,000
shares of common stock to the estate of our former CEO in exchange for the cancellation of 4,750,000 common stock options. The
aggregate fair value of the options exceeded the fair value of the common stock at issuance, therefore there was no additional
expense as a result of the modification of the equity awards.





Re-Priced
Options Issued to Officers and Directors for Services



On
January 7, 2019, the board amended the following options to reduce their exercise price to $0.13 per share, based on the most
recent closing stock price. All other terms were unchanged. The modification of these equity awards resulted in an additional
expense of $36,764.



|Original   |  | Recipient’s   |  | Option      |  | # of    |           |  | Term    |  |     | Original   |  |   | New        | 
|---------- |  | ------------- |  | ----------- |  | ------- | --------- |  | ------- |  | --- | ---------- |  | - | ---------- | 
|Grant Date |  | Name          |  | Type        |  | Options |           |  | In Mos. |  |     | Exercise $ |  |   | Exercise $ | 
|6/1/2015   |  | Cindy Orser   |  | NSO Options |  |         | 200,000   |  |         |  | 120 |            |  | $ | 0.40       | 
|6/19/2015  |  | Todd Peterson |  | ISO Options |  |         | 100,000   |  |         |  | 120 |            |  | $ | 0.33       | 
|6/21/2016  |  | Todd Denkin   |  | ISO Options |  |         | 2,500,000 |  |         |  | 120 |            |  | $ | 0.20       | 
|11/29/2017 |  | Cindy Orser   |  | NSO Options |  |         | 100,000   |  |         |  | 120 |            |  | $ | 0.27       | 
|12/22/2017 |  | Todd Denkin   |  | ISO Options |  |         | 500,000   |  |         |  | 120 |            |  | $ | 0.27       | 
|           |  |               |  |             |  |         | 3,400,000 |  |         |  |     |            |  |   |            | 





Options Issued to Employees for Services







On December 25, 2018, we granted fully vested
options to purchase an aggregate of 345,000 shares of common stock as compensation for services to a total of fourteen of our
employees. The options are exercisable over a ten-year period at an exercise price of $0.13 per share. The estimated value using
the Black-Scholes Pricing Model, based on a volatility rate of 107% and a call option value of $0.1017, was $35,078. The options
are being expensed over the vesting period, resulting in $9,226 of stock-based compensation expense during the six months
ended March 31, 2019. As of March 31, 2019, a total of $25,852 of unamortized expenses are expected to be expensed over
the vesting period.



Note
10 – Common Stock Warrants



Warrants
to purchase a total of 4,100,461 shares of common stock were outstanding as of March 31, 2019.



On
various dates from December 21, 2018 to March 15, 2019, warrants to purchase an aggregate of 2,250,001 shares of common
stock at $0.30 per share expired, and on November 23, 2018, warrants to purchase another 100,000 shares of common stock at $0.40
per share expired.



Note
11 – Other Income



Other
income for the six months ended March 31, 2019 and 2018 consisted of the following:



|                                     |  | March 31, |       
|------------------------------------ |  | --------- | ------
|                                     |  | 2019      |       
|Interest income                      |  | $         | 1,250 
|Settlement income on note receivable |  |           | 30,000
|Rental income on subleases           |  |           | 41,400
|Restitution income                   |  |           | -     
|                                     |  | $         | 72,650



On
December 1, 2018, we received $30,000 as full settlement of a Note dated December 17, 2014, consisting of $250,000 of principal
and approximately $58,125 of unpaid interest that was previously written off as uncollectible.



14







DIGIPATH,
INC. AND SUBSIDIARIES

Notes
to Condensed Consolidated Financial Statements

(Unaudited)



Note
12 - Income Tax



The
Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides
that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes, referred to as temporary differences.



For
the six months ended March 31, 2019 and the year ended September 30, 2018, the Company incurred a net operating loss and, accordingly,
no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty
of the realization of any tax assets. At March 31, 2019, the Company had approximately $8,560,000 of federal net operating losses.
The net operating loss carry forwards, if not utilized, will begin to expire in 2031.



Based
on the available objective evidence, including the Company’s history of its loss, management believes it is more likely
than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation
allowance against its net deferred tax assets at March 31, 2019 and September 30, 2018, respectively.



In
accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.



Note
13 – Subsequent Events



Note
Receivable Repayment



On
April 1, 2019, Big Valley Analytical Labs, Inc. repaid $45,000 owed to us under the promissory notes.



Common
Stock Issued for Services



On
April 25, 2019, a total of 50,000 shares of common stock were issued to a consultant that was engaged to assist the Company with
acquisition activities. The fair value of the common stock was $9,500 based on the closing price of the Company’s common
stock on the date of grant, and was expensed over the requisite service period.



15







ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



The
information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for
the year ended September 30, 2018 and presumes that readers have access to, and will have read, the “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K.
The following discussion and analysis also should be read together with our financial statements and the notes to the financial
statements included elsewhere in this Form 10-Q.



The
following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including,
without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult
to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should
not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described
in our Annual Report on Form 10-K for the year ended September 30, 2018 in the section entitled “Risk Factors” for
a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements.
We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following
should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.



Overview



Digipath,
Inc. was incorporated in Nevada on October 5, 2010. Digipath, Inc. and its subsidiaries (“Digipath,” the “Company,”
“we,” “our” or “us”) is a service-oriented independent testing
laboratory, data analytics and media firm focused on the developing cannabis and hemp markets, andsupports the cannabis
industry’s best practices for reliable testing, cannabis education and training. Our business units as of March 31, 2019
are described below.



| | Ø | Digipath
    Labs, Inc. Digipath Labs’ mission is to provide pharmaceutical-grade analysis and testing to the cannabis industry
    to ensure consumers and patients know exactly what is in the cannabis they ingest and to help maximize the quality of our
    clients’ products through research, development, and standardization. We have been operating a cannabis testing lab
    in Nevada since 2015 and have plans to open labs in other states that have legalized the sale of cannabis, beginning with
    California.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Ø | The
    National Marijuana News Corp. provides a balanced and unbiased approach to cannabis news, interviews and education with
    a news/talk radio show, app, national marijuana news website and social media presence focusing on the political, economic,
    medicinal, scientific, and cultural dimensions of the rapidly evolving—and profoundly controversial—medicinal
    and recreational marijuana industry.                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Ø | GroSciences,
    Inc. Launched during the first fiscal quarter of 2019 to capitalize on the extensive data we have collected from cannabis
    through the testing process. GroSciences plans to develop and license specific formulations to other producers and product
    makers in the industry.                                                                                                                                                                                                                              



Our
cannabis testing revenues improved slightly over the previous fiscal quarter, but was substantially lower than our comparative
six month period ending March 31, 2018. This decrease was primarily the result of the temporary suspension by regulators of two
of our competitors in the prior year’s quarter, resulting in a significant increase in our sales during that quarter. Our
revenues stabilized subsequent to the prior period when these competitors were reinstated. As an ISO 17025:2017 accredited lab,
we believe that we are now well positioned to handle future growth in full compliance with Nevada’s regulations applicable
to our operations and are actively working to expand to other jurisdictions.



We
are currently seeking to expand our lab testing services to Colombia, and to that end have retained Colombian counsel, formed
a Colombian subsidiary and hired two local employees. Our goal is to launch a testing lab in Colombia by the end of the fiscal
year, although there can be no assurance that we will be successful in that regard.



In
January 2019, we entered into an agreement to provide potency testing laboratories for hemp production at sites owned by Hemp,
Inc. in North Carolina, Oregon and Arizona. Under the terms of the agreement, we will oversee and manage the construction and
build out of a hemp potency-testing laboratory in three of Hemp Inc.’s locations and Hemp. Inc. will provide the space for
the testing laboratories at no cost to us. Construction has not yet commenced.



We
are also exploring opportunities to capitalize on the extensive data we have collected from our cannabis testing activities. Through
our wholly-owned subsidiary, GroSciences, Inc., we intend to license specific formulations and intellectual property developed
from our experience in the cannabis industry. We have not yet commenced operations for this initiative, other than minimal research
and development activities and patent filings.



16







Results
of Operations for the Three Months Ended March 31, 2019 and 2018:



The
following table summarizes selected items from the statement of operations for the three months ended March 31, 2019 and 2018.



|                           |  | Three Months Ended March 31, |          |   | Increase / |  
|-------------------------- |  | ---------------------------- | -------- | - | ---------- | -
|                           |  | 2019                         |          |   | 2018       |  
|Revenues                   |  | $                            | 651,555  |   |            | $
|Cost of sales              |  |                              | 427,830  |   |            |  
|Gross profit (loss)        |  |                              | 223,725  |   |            |  
|                           |  |                              |          |   |            |  
|Operating expenses:        |  |                              |          |   |            |  
|General and administrative |  |                              | 418,505  |   |            |  
|Professional fees          |  |                              | 235,667  |   |            |  
|Bad debts expense          |  |                              | 25,265   |   |            |  
|Total operating expenses:  |  |                              | 679,437  |   |            |  
|                           |  |                              |          |   |            |  
|Operating loss             |  |                              | (455,712 | ) |            |  
|                           |  |                              |          |   |            |  
|Total other income         |  |                              | 4,247    |   |            |  
|                           |  |                              |          |   |            |  
|Net loss                   |  | $                            | (451,465 | ) |            | $



Revenues



Revenues
were generated by our cannabis testing lab and to a de minimis extent, from advertising on TNM News’ media outlets. Aggregate
revenues for the three months ended March 31, 2019 were $651,555, compared to revenues of $583,073 during the three months ended
March 31, 2018, an increase of $68,482, or 12%. The increase in revenue was due to industry growth and expansion to hemp testing
during the current period.



Cost
of Sales



Cost
of sales for the three months ended March 31, 2019 were $427,830, compared to $665,858 during the three months ended March 31,
2018, a decrease of $238,028, or 36%. Cost of sales consists primarily of labor, depreciation, maintenance on lab equipment, and
supplies consumed in our testing operations. The decreased cost of sales in the current period was primarily due to better pricing
on our consumable supplies, and improved efficiencies with respect to our labor. Our gross margins of approximately 34%, increased
during the three months ended March 31, 2019, compared to gross margins of approximately negative 14% during the three months
ended March 31, 2018, due primarily to decreased cost of sales in the current quarter and increased costs in the prior quarter
when we devoted significant resources to the improvement of operations and compliance with regulations, including the ISO
17025:2017 requirement.



General
and Administrative Expenses



General
and administrative expenses for the three months ended March 31, 2019 were $418,505, compared to $348,399 during the three months
ended March 31, 2018, an increase of $70,106, or 20%. The expenses consisted primarily of marketing, rent, salaries and wages,
and travel expenses. General and administrative expense increased during the current period due to increased travel expenses.



Professional
Fees



Professional
fees for the three months ended March 31, 2019 were $235,667, compared to $249,111 during the three months ended March 31, 2018,
a decrease of $13,444, or 5%. Professional fees included non-cash, stock-based compensation of $143,574 and $191,976 during the
three months ended March 31, 2019 and March 31, 2018, respectively. Professional fees decreased primarily due to decreased stock-based
compensation during the current period.



17







Bad
Debts Expense



Bad
debts expense for the three months ended March 31, 2019 was $25,265, compared to $42,301 during the three months ended March 31,
2018, a decrease of $17,036, or 40%. Bad debts expense decreased during the current period as our allowance for doubtful accounts
decreased with greater resources devoted to collection efforts during the quarter. Our bad debts expense due to the change in
our allowance for doubtful accounts was 4% and 7% of sales for the three months ended March 31, 2019 and 2018, respectively.



Operating
Loss



Our
operating loss for the three months ended March 31, 2019 was $455,712, compared to $722,596 during the three months ended March
31, 2018, a decrease of $266,884, or 37%. Our operating loss decreased primarily due to increased margins, as offset in part by
increased investor relations expenses, during the three months ended March 31, 2019, compared to the three months ended March
31, 2018.



Other
Income



Other
income for the three months ended March 31, 2019 was $4,247, compared to other income of $22,200 during the three months ended
March 31, 2018, a decrease of $17,953, or 81%. Other income consisted of $1,250 of interest income and $21,000 of sublease rents,
as offset by $18,003 of interest expense for the three months ended March 31, 2019. Other income during the three months ended
March 31, 2018 consisted of $19,200 of subleased rents and $3,000 of restitution payments received from a former employee.



Net
Loss



Net
loss for the three months ended March 31, 2019 was $451,465, compared to $700,396 during the three months ended March 31, 2018,
a decrease of $248,931, or 36%. The decreased net loss was due primarily to increased gross profits, as described above,
as offset in part by interest expense on debt financing.



Results
of Operations for the Six Months Ended March 31, 2019 and 2018:



The
following table summarizes selected items from the statement of operations for the six months ended March 31, 2019 and 2018.



|                           |  | Six Months Ended March 31, |           |   | Increase / |  
|-------------------------- |  | -------------------------- | --------- | - | ---------- | -
|                           |  | 2019                       |           |   | 2018       |  
|Revenues                   |  | $                          | 1,293,670 |   |            | $
|Cost of sales              |  |                            | 910,150   |   |            |  
|Gross profit               |  |                            | 383,520   |   |            |  
|                           |  |                            |           |   |            |  
|Operating expenses:        |  |                            |           |   |            |  
|General and administrative |  |                            | 808,976   |   |            |  
|Professional fees          |  |                            | 482,247   |   |            |  
|Bad debts expense          |  |                            | 49,830    |   |            |  
|Total operating expenses:  |  |                            | 1,341,053 |   |            |  
|                           |  |                            |           |   |            |  
|Operating loss             |  |                            | (957,533  | ) |            |  
|                           |  |                            |           |   |            |  
|Total other income         |  |                            | 43,894    |   |            |  
|                           |  |                            |           |   |            |  
|Net loss                   |  | $                          | (913,639  | ) |            | $



18







Revenues



Revenues
were generated by our cannabis testing lab and to a de minimis extent, from advertising on TNM News’ media outlets. Aggregate
revenues for the six months ended March 31, 2019 were $1,293,670, compared to revenues of $1,701,858 during the six months ended
March 31, 2018, a decrease of $408,188, or 24%. The decrease in revenue was due to a spike in revenues in the
comparative fiscal quarter ending March 31, 2018 due to regulators’ temporary suspension of two of our competitors during
that period. Our revenues normalized when these competitors were reinstated.



Cost
of Sales



Cost
of sales for the six months ended March 31, 2019 were $910,150, compared to $1,042,630 during the six months ended March 31, 2018,
a decrease of $132,480, or 13%. Cost of sales consists primarily of labor, depreciation, maintenance on lab equipment, and supplies
consumed in our testing operations. The decreased cost of sales in the current period was primarily due to better pricing on our
consumable supplies, and improved efficiencies with respect to our labor. Our gross margins of approximately 30%, decreased during
the six months ended March 31, 2019, compared to gross margins of approximately 39% during the six months ended March 31, 2018
when we experienced a spike in revenues.



General
and Administrative Expenses



General
and administrative expenses for the six months ended March 31, 2019 were $808,976, compared to $747,513 during the six months
ended March 31, 2018, an increase of $61,463, or 8%. The expenses consisted primarily of marketing, rent, salaries and wages,
and travel expenses. General and administrative expense increased during the current period due to increased travel expenses.



Professional
Fees



Professional
fees for the six months ended March 31, 2019 were $482,247, compared to $735,787 during the six months ended March 31, 2018, a
decrease of $253,540, or 34%. Professional fees included non-cash, stock-based compensation of $299,409 and $638,415 during the
six months ended March 31, 2019 and March 31, 2018, respectively. Professional fees decreased primarily due to decreased stock-based
compensation, as diminished by increased investment relations efforts during the current period.



Bad
Debts Expense



Bad
debts expense for the six months ended March 31, 2019 was $49,830, compared to $98,241 during the six months ended March 31, 2018,
a decrease of $48,411, or 49%. Bad debts expense decreased during the current period as our allowance for doubtful accounts decreased
with greater resources devoted to collection efforts during the current period. Our bad debts expense due to the change
in our allowance for doubtful accounts was 4% and 6% of sales for the six months ended March 31, 2019 and 2018, respectively.



Operating
Loss



Our
operating loss for the six months ended March 31, 2019 was $957,533, compared to $922,313 during the six months ended March 31,
2018, an increase of $35,220, or 4%. Our operating loss increased primarily due to decreased revenues, as offset in part by decreased
stock-based compensation, during the six months ended March 31, 2019, compared to the six months ended March 31, 2018.



Other
Income



Other
income for the six months ended March 31, 2019 was $43,894, compared to other income of $42,900 during the six months ended March
31, 2018, an increase of $994, or 2%. Other income consisted of $1,250 of interest income, $41,400 of sublease rents and a $30,000
gain on settlement of a previously written off note receivable, as offset by $28,756 of interest expense for the six months ended
March 31, 2019. Other income during the six months ended March 31, 2018 consisted of $38,400 of subleased rents and $4,500 of
restitution payments received from a former employee.



Net
Loss



Net
loss for the six months ended March 31, 2019 was $913,639, compared to $879,413 during the six months ended March 31, 2018, an
increase of $34,226, or 4%. The increased net loss was due primarily to decreased revenues, as offset in part by decreased stock-based
compensation, over the comparative six month period.



19







Liquidity
and Capital Resources



The
following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities
for the six month periods ended March 31, 2019 and 2018:



|                     |  | 2019 |           |   | 2018 |  
|-------------------- |  | ---- | --------- | - | ---- | -
|Operating Activities |  | $    | (690,634  | ) |      | $
|Investing Activities |  |      | (96,375   | ) |      |  
|Financing Activities |  |      | 1,125,000 |   |      |  
|Net Increase in Cash |  | $    | 337,991   |   |      | $



Net
Cash Provided by (Used in) Operating Activities



During
the six months ended March 31, 2019, net cash used in operating activities was $690,634, compared to net cash provided by operating
activities of $101,547 for the same period ended March 31, 2018. The increase in cash used in operating activities is primarily
attributable to our increased net lossas we
didn’t benefit from the decreased competition from the suspension of two competing cannabis testing labs in the current
period, as we did in the prior period.



Net
Cash Used in Investing Activities



During
the six months ended March 31, 2019, net cash used in investing activities was $96,375, compared to $186,370 for the same period
ended March 31, 2018. The decrease is attributable to investments made for cannabis testing equipment in the prior period that
was not necessary in the current period, in addition to the advancement of short term loans during the current period.



Net
Cash Provided by Financing Activities



During
the six months ended March 31, 2019, net cash provided by financing activities was $1,125,000, compared to $143,008 for the same
period ended March 31, 2018. The current period consisted of proceeds received on fixed convertible debt financing at $0.14 per
share and the sale of $625,000 of common stock, while the comparative period consisted of proceeds received from the sale of stock
and warrants.



Ability
to Continue as a Going Concern



As
of March 31, 2019, our balance of cash on hand was $514,018. We currently may not have sufficient funds to sustain our operations
for the next twelve months and we may need to raise additional cash to fund our operations and expand our lab testing business.
As we continue to develop our lab testing business and attempt to expand operational activities, we
expect to experience net negative cash flows from operations in amounts not now determinable, and will be required to obtain additional
financing to fund operations through common stock offerings to the extent necessary to provide working capital. We have and expect
to continue to have substantial capital expenditure and working capital needs.



The
Company has incurred recurring losses from operations resulting in an accumulated deficit, and, as set forth above, the Company’s
cash on hand is not sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability
to continue as a going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is
currently seeking additional sources of capital to fund short term operations. In the event sales do
not materialize at the expected rates, management would seek additional financing or would attempt to conserve cash by further
reducing expenses. There can be no assurance that we will be successful in achieving these objectives, becoming profitable or
continuing our business without either a temporary interruption or a permanent cessation. In addition, additional financing
may result in substantial dilution to existing stockholders.



The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern,
which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
The unaudited consolidated financial statements do not include any adjustments related to the recoverability
and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.



Off-Balance
Sheet Arrangements



We
have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage
in trading activities involving non-exchange traded contracts.



20







Critical
Accounting Policies and Estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and
related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant
to the preparation of our financial statements. These accounting policies are important for an understanding of our financial
condition and results of operations. Critical accounting policies are those that are most important to the presentation of our
financial condition and results of operations and require management’s subjective or complex judgment, often as a result
of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the
possibility that future events affecting the estimate may differ significantly from management’s current judgments.



While
our significant accounting policies are more fully described in notes to our consolidated financial statements appearing elsewhere
in this Form 10-Q, we believe that the following accounting policies are the most critical to aid you in fully understanding and
evaluating our reported financial results and affect the more significant judgments and estimates that we used in the preparation
of our financial statements.



Revenue
Recognition



The
Company has adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers
(Topic 606). This updateprovides guidance on recognizing revenue, including a five-step model to determine when revenue
recognition is appropriate. The standard requires that an entity recognize revenue from contracts with customers to depict the
transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The new update does not affect how the Company recognizes revenue
in accordance with ASC 606, Revenue Recognition. ASC 606 requires that four basic criteria must be met before revenue can be recognized:
(1) persuasive evidence of an arrangement exists; (2) delivery of product has met the criteria established in the arrangement
or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. With respect to our
cannabis lab testing revenues, we sell our services on a determinable fixed fee per test, or panel
of tests basis, and offer a discounted price for customers that agree to exclusive or predetermined quantities of tests. We
typically require payment within thirty days of the delivery of results. Revenues are recognized upon the substantial completion
of the tests when collectability is reasonably assured, which is usually upon delivery of results to the customer.



Stock-Based
Compensation



The
Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC
718) and Equity-Based Payments to Non-employees pursuant to ASC 505-50 (ASC 505-50). All transactions in which goods or services
are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the
fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete
or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently
large disincentives for nonperformance.



ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.



As
a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the
information required by this Item



21







ITEM
4. CONTROLS AND PROCEDURES.



Disclosure
Controls and Procedures



Our
management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures as of March 31, 2019. The term “disclosure controls and procedures,” as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed
to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be
disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s
management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding
required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March
31, 2019, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and
procedures were effective at the reasonable assurance level.



Changes
in Internal Control over Financial Reporting



There
have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) or in other factors that occurred during the period of our evaluation or subsequent to the date we carried
out our evaluation which have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood
of future events. There can be no assurance that any system of controls and procedures will succeed in achieving its stated goals
under all potential future conditions, regardless of how remote.



22







PART
II - OTHER INFORMATION



ITEM
1. LEGAL PROCEEDINGS.



We
are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely
to have a material adverse effect on our financial condition or results of operations.



ITEM
1A. RISK FACTORS.



As
a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the
information required by this Item.



ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.



The
following issuances of equity securities by the Company were exempt from the registration requirements of the Securities Act of
1933 pursuant to Section 4(a)(2) of the Securities Act of 1933 during the three month period ended March 31, 2019:



On
March 25, 2019, we issued 29,268 shares of common stock, restricted in accordance with Rule 144, to our President and CEO for
services rendered pursuant to his employment agreement.



On
March 25, 2019, we issued 73,171 shares of common stock, restricted in accordance with Rule 144, to our CFO for services rendered
pursuant to his employment agreement.



On
March 25, 2019, we issued a total of 150,000 shares of common stock, restricted in accordance with Rule 144, to a consultant that
was engaged to assist the Company with acquisition activities.



On
February 7, 2019, the Company sold 1,000,000 shares of its common stock, restricted in accordance with Rule 144, in exchange for
proceeds of $200,000.



On
February 1, 2019, the Company sold 250,000 shares of its common stock, restricted in accordance with Rule 144, in exchange for
proceeds of $50,000.



On
January 31, 2019, the Company sold 625,000 shares of its common stock, restricted in accordance with Rule 144, in exchange for
proceeds of $125,000.



On
January 24, 2019, the Company sold 1,250,000 shares of its common stock, restricted in accordance with Rule 144, in exchange for
proceeds of $250,000.



ITEM
3. DEFAULTS UPON SENIOR SECURITIES.



None.



ITEM
4. MINE SAFETY DISCLOSURES.



Not
applicable.



ITEM
5. OTHER INFORMATION.



None.



23







ITEM
6. EXHIBITS.



|Exhibit  |  | Description                                                                                                                                                                                                                                                                                                        
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1      |  | Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 10 filed with the Securities and Exchange Commission by Digipath, Inc. on July 15, 2011)                                                                                                                                           
|3.2      |  | Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10 filed with the Securities and Exchange Commission by Digipath, Inc. on July 15, 2011)                                                                                                                                                              
|3.3      |  | Certificate of Amendment to Articles of Incorporation dated April 4, 2014 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on April 10, 2014)                                                                               
|3.4      |  | Certificate of Designations, Preferences, Limitations, Restrictions and Relative Rights of Series A Convertible Preferred Stock dated April 9, 2014 (incorporated by reference to Exhibit 3.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on April 10, 2014)     
|3.5      |  | Certificate of Amendment to Articles of Incorporation dated May 22, 2015 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 26, 2015)                                                                          
|4.1      |  | Form of 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on November 21, 2018)                                                                            
|10.1     |  | Security Agreement between Digipath Labs, Inc. and collateral agent for the holders of the 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on November 21, 2018)
|31.1*    |  | Section 302 Certification of Chief Executive Officer                                                                                                                                                                                                                                                               
|31.2*    |  | Section 302 Certification of Chief Financial Officer                                                                                                                                                                                                                                                               
|32.1*    |  | Section 906 Certification of Chief Executive Officer                                                                                                                                                                                                                                                               
|32.2*    |  | Section 906 Certification of Chief Financial Officer                                                                                                                                                                                                                                                               
|101.INS* |  | XBRL
    Instance Document                                                                                                                                                                                                                                                                                         
|101.SCH* |  | XBRL
    Schema Document                                                                                                                                                                                                                                                                                           
|101.CAL* |  | XBRL
    Calculation Linkbase Document                                                                                                                                                                                                                                                                             
|101.DEF* |  | XBRL
    Definition Linkbase Document                                                                                                                                                                                                                                                                              
|101.LAB* |  | XBRL
    Labels Linkbase Document                                                                                                                                                                                                                                                                                  
|101.PRE* |  | XBRL
    Presentation Linkbase Document                                                                                                                                                                                                                                                                            

*
Filed herewith.



24







SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



Date:
May 15, 2019



|DIGIPATH,
    INC. |                                          
|------------------ | -----------------------------------------
|                   |                                          
|By:                | /s/
    Todd Denkin                      
|Name:              | Todd
    Denkin                          
|Title:             | Chief
    Executive Officer and Director 
|                   |                                          
|By:                | /s/
    Todd Peterson                    
|Name:              | Todd
    Peterson                        
|Title:             | Chief
    Financial Officer and Secretary



25