# EDGAR Filing Document

**Accession Number:** 0001502966
**File Stem:** 0001493152-23-004973
**Filing Date:** 2023-2
**Character Count:** 97583
**Document Hash:** 3c7b5a4fd589aa5c1c835cc802fbe947
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-004973.hdr.sgml**: 20230214

**ACCESSION NUMBER**: 0001493152-23-004973

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 78

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230214

**DATE AS OF CHANGE**: 20230214

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Digipath, Inc.
- **CENTRAL INDEX KEY:** 0001502966
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-TESTING LABORATORIES [8734]
- **IRS NUMBER:** 273601979
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-54239
- **FILM NUMBER:** 23630655

**BUSINESS ADDRESS:**
- **STREET 1:** 6450 CAMERON ST., SUITE 113
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89118
- **BUSINESS PHONE:** 702-527-2060

**MAIL ADDRESS:**
- **STREET 1:** 6450 CAMERON ST., SUITE 113
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89118

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DigiPath,Inc.
- **DATE OF NAME CHANGE:** 20101006

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For Quarterly Period Ended December 31, 2022**

**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**

![](form10-q_001.jpg)

**<u>Digipath, Inc.</u>**

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

---

| | |
|:---|:---|
| **Nevada** | **27-3601979** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **6450 Cameron St Suite 113 Las Vegas, NV** | **89118** |
| (Address of principal executive offices) | (zip code) |

---

**<u>(702) 527-2060</u>**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
|  | N/A | N/A |

---

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 | ☒ | 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 | ☒ | 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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

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 | ☒ |

---

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 February 14, 2023 was 86,696,820.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page**<br>**No.** |
| **[PART I - FINANCIAL INFORMATION](#thi_001)** | **[PART I - FINANCIAL INFORMATION](#thi_001)** | 3 |
| ITEM 1. | [FINANCIAL STATEMENTS (Unaudited)](#thi_002) | 3 |
|  | &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets as of December 31, 2022 (Unaudited) and September 30, 2022](#thi_003) | 3 |
|  | &nbsp;&nbsp;&nbsp;[Consolidated Statements of Operations for the Three Months Ended December 31, 2022 and 2021 (Unaudited)](#thi_004) | 4 |
|  | &nbsp;&nbsp;&nbsp;[Consolidated Statements of Stockholders' Deficit for the Three Months Ended December 31, 2022 and 2021 (Unaudited)](#thi_005) | 5 |
|  | &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows for the Three Months Ended December, 2022 and 2021 (Unaudited)](#thi_006) | 6 |
|  | &nbsp;&nbsp;&nbsp;[Notes to the Condensed Consolidated Financial Statements (Unaudited)](#thi_007) | 7 |
| ITEM 2. | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#thi_008) | 19 |
| ITEM 3. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#thi_009) | 22 |
| ITEM 4. | [CONTROLS AND PROCEDURES](#thi_010) | 23 |
| **[PART II - OTHER INFORMATION](#thi_011)** | **[PART II - OTHER INFORMATION](#thi_011)** | 24 |
| ITEM 1. | [Legal Proceedings](#thi_012) | 24 |
| ITEM 1A. | [RISK FACTORS](#thi_013) | 24 |
| ITEM 2. | [UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#thi_014) | 24 |
| ITEM 3. | [DEFAULTS UPON SENIOR SECURITIES](#thi_015) | 24 |
| ITEM 4. | [MINE SAFETY DISCLOSURES](#thi_016) | 24 |
| ITEM 5. | [OTHER INFORMATION](#thi_017) | 24 |
| ITEM 6. | [EXHIBITS](#thi_018) | 25 |
|  | [SIGNATURES](#thi_019) | 26 |

---

**PART I – FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**.

**DIGIPATH, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **September 30, 2022** |
|  | (Unaudited) |  |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $155832 | $56168 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 301870 | 335085 |
| &nbsp;&nbsp;&nbsp;Deposits | 20700 | 25141 |
| &nbsp;&nbsp;&nbsp;Note receivable |  | 100000 |
| &nbsp;&nbsp;&nbsp;Other current assets | 29852 | 45710 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 508254 | 562104 |
| Right-of-use asset | 291869 | 316961 |
| Fixed assets, net | 378806 | 460823 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 670675 | 777784 |
| Total Assets | $1178929 | $1339888 |
| **Liabilities and Stockholders' Deficit** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $571121 | $550467 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 420030 | 378368 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 105649 | 100685 |
| &nbsp;&nbsp;&nbsp;Current maturities of notes payable | 726800 | 725920 |
| &nbsp;&nbsp;&nbsp;Current maturities of convertible notes payable, net of discounts | 150000 | 1198469 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1973600 | 2953909 |
| Non-current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 199597 | 229825 |
| &nbsp;&nbsp;&nbsp;Notes payable | 64644 | 80428 |
| &nbsp;&nbsp;&nbsp;Convertible notes payable related parties, net of discounts | 317597 | 310272 |
| &nbsp;&nbsp;&nbsp;Convertible notes payable, net of discounts and current maturities | 1170849 | 174726 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current liabilities | 1752687 | 795251 |
| Total Liabilities | 3726287 | 3749160 |
| Series B convertible preferred stock, $0.001 par value, 1,500,000 shares authorized; 333,600 shares issued and outstanding as of December 31, 2022 and September 30, 2022 | 333600 | 333600 |
| Stockholders' Deficit: |  |  |
| &nbsp;&nbsp;&nbsp;Series A convertible preferred stock, $0.001 par value, 6,000,000 shares authorized; 1,047,942 shares issued and outstanding as of December 31, 2022 and September 30, 2022 | 1048 | 1048 |
| &nbsp;&nbsp;&nbsp;Series C convertible preferred stock, $0.001 par value, 1,000 shares authorized; 1,000 shares issued and outstanding as of December 31, 2022 and September 30, 2022 | 1 | 1 |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value, 250,000,000 shares authorized; 82,296,820 and 75,146,820 shares issued and outstanding at December 31, 2022 and September 30, 2022, respectively | 82297 | 75147 |
| &nbsp;&nbsp;&nbsp;Common stock payable |  | 71745 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 17284797 | 17117958 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (20249101) | (20008771) |
| Total Stockholders' Deficit | (2880958) | (2742872) |
| Total Liabilities and Stockholders' Deficit | $1178929 | $1339888 |

---

See accompanying notes to unaudited consolidated financial statements.

**DIGIPATH, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Revenues | $726755 | $699585 |
| Cost of sales | 422835 | 422601 |
| &nbsp;&nbsp;&nbsp;Gross profit | 303920 | 276984 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 306483 | 240964 |
| &nbsp;&nbsp;&nbsp;Professional fees | 69969 | 255749 |
| &nbsp;&nbsp;&nbsp;Change in allowance for doubtful accounts | 13685 | (2139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 390137 | 494574 |
| Operating loss | (86217) | (217590) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Other Expense | (55000) |  |
| &nbsp;&nbsp;&nbsp;Interest income |  | 9380 |
| &nbsp;&nbsp;&nbsp;Interest expense | (99113) | (69393) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (154113) | (60013) |
| Net loss | (240330) | (277603) |
| Preferred deemed dividend | - | (192154) |
| Net loss to common shareholders | $(240330) | $(469757) |
| &nbsp;&nbsp;&nbsp;Weighted average number of common shares outstanding - basic and fully diluted | 82219103 | 72387762 |
| &nbsp;&nbsp;&nbsp;Net loss per share - basic and fully diluted | $(0.00) | $(0.00) |

---

See accompanying notes to unaudited consolidated financial statements.

**DIGIPATH, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT**

**(Unaudited)**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series B Convertible<br> Preferred Stock | Series B Convertible<br> Preferred Stock | Series A Convertible<br> Preferred Stock | Series A Convertible<br> Preferred Stock | Series C<br> Preferred Stock | Series C<br> Preferred Stock | Common Stock | Common Stock | | | | |
|  | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Stock<br>Payable | Additional<br> Paid-in<br>Capital | Accumulated<br>Deficit | Total<br> Stockholders'<br>Deficit |
| Balance, September 30, 2022 | 333600 | $333600 | 1047942 | $1048 | 1000 | $1 | 75146820 | $75147 | $71745 | $17117958 | $(20008771) | $(2742872) |
| Issuance of common shares to settle stock payable |  |  |  |  |  |  | 7150000 | 7150 | (71745) | 64595 |  |  |
| Warrants issued as debt financing costs |  |  |  |  |  |  |  |  |  | 93938 |  | 93938 |
| Stock-based compensation |  |  |  |  |  |  |  |  |  | 8306 |  | 8306 |
| Net loss | - | - | - | - | - | - | - | - | - | - | (240330) | (240330) |
| Balance, December 31, 2022 | 333600 | $333600 | 1047942 | $1048 | 1000 | $1 | 82296820 | $82297 | $- | $17284797 | $(20249101) | $(2880958) |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series B<br> Convertible<br> Preferred Stock | Series B<br> Convertible<br> Preferred Stock | Series A<br> Convertible<br> Preferred Stock | Series A<br> Convertible<br> Preferred Stock | Series C<br> Preferred<br> Stock | Series C<br> Preferred<br> Stock | Common<br> Stock | Common<br> Stock | | | | |
|  | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Stock<br>Payable | Additional<br> Paid-in<br>Capital | Accumulated<br>Deficit | Total<br> Stockholders'<br>Deficit |
| Balance, September 30, 2021 |  |  | 1325942 | 1326 |  |  | 71230153 | 71230 |  | 16825765 | (17951653) | (1053332) |
| Series B Preferred shares sold for cash | 55600 | 55600 |  |  |  |  |  |  |  |  |  |  |
| Conversion of Series A Preferred Shares into Series B Preferred | 278000 | 278000 | (278000) | (278) |  |  |  |  |  | (85568) |  | (85846) |
| Common stock issued for services |  |  |  |  |  |  | 1500000 | 1500 |  | 51000 |  | 52500 |
| Stock-based compensation |  |  |  |  |  |  |  |  |  | 33457 |  | 33457 |
| Deemed dividend on preferred exchange |  |  |  |  |  |  |  |  |  | (192154) |  | (192154) |
| Net loss | - | - | - | - |  | - | - | - | - | - | (277603) | (277603) |
| Balance, December 31, 2021 | 333600 | $333600 | 1047942 | $1048 |  | $- | 72730153 | $72730 | $- | $16632500 | $(18229256) | $(1522978) |

---

See accompanying notes to unaudited consolidated financial statements.

**DIGIPATH, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| **Cash flows from operating activities** |  |  |
| Net loss | $(240330) | $(277603) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Change in allowance for doubtful accounts | 13685 | (2139) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 35759 | 58469 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 8306 | 85957 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discounts | 48916 | 19766 |
| &nbsp;&nbsp;&nbsp;Impairment of fixed assets | 55000 |  |
| Decrease (increase) in assets: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 19530 | (113359) |
| &nbsp;&nbsp;&nbsp;Other current assets | 15858 | 6984 |
| &nbsp;&nbsp;&nbsp;Deposits | (1635) | (390) |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 25092 | 23734 |
| Increase (decrease) in liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 20655 | (2951) |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 41662 | 46956 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | (25264) | (22582) |
| Net cash provided by (used in) operating activities | 17234 | (177158) |
| **Cash flows from investing activities** |  |  |
| Purchase of fixed assets | (2666) | (2482) |
| Advance of note receivable |  | (406000) |
| Proceeds from sale of collateralized assets | 100000 | - |
| Net cash provided by (used in) investing activities | 97334 | (408482) |
| **Cash flows from financing activities** |  |  |
| Principal payments on finance lease |  | (8467) |
| Principal payments on note payable, equipment financing | (14904) | (14142) |
| Proceeds from notes payable |  | 400000 |
| Proceeds from convertible notes |  |  |
| Payments on convertible notes |  | (52978) |
| Proceeds from sale of common stock |  |  |
| Proceeds from sale of preferred stock | - | 55600 |
| Net cash provided by (used in) financing activities | (14904) | 380013 |
| Net increase (decrease) in cash | 99664 | (205627) |
| Cash - beginning | 56168 | 295932 |
| Cash - ending | $155832 | $90305 |
| Supplemental disclosures: |  |  |
| Interest paid | $26166 | $27601 |
| Income taxes paid | - | - |
| Non-cash investing and financing activities: |  |  |
| Common stock issued for settlement of stock payable | $71745 | $- |
| Warrants issued for debt financing | $93938 | $- |
| Transfer of completed assets | $6076 | $- |
| Conversion of Series A preferred into Series B preferred | $- | $85846 |
| Deemed dividend on preferred exchange | $- | $192154 |

---

See accompanying notes to unaudited consolidated financial statements.

**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 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 hopes to open labs in other states that have legalized the sale of cannabis, beginning with California or Arizona.

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, 2022. 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 December 31, 2022:

Schedule of Entities Under Common Control and Ownership

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| | | |
|:---|:---|:---|
|  | Jurisdiction of |  |
| Name of Entity | Incorporation | Relationship |
| Digipath, Inc.<sup>(1)</sup> | Nevada | Parent |
| Digipath Labs, Inc. | Nevada | Subsidiary |
| Digipath Labs CA, Inc <sup>(2)</sup> | California | Subsidiary |
| Digipath Labs S.A.S.<sup>(3)</sup> | Colombia | Subsidiary |
| VSSL Enterprises, Ltd.<sup>(4)</sup> | Canada | Subsidiary |

---

<sup>(1)</sup> Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by Digipath, Inc., the parent company.

<sup>(2)</sup> Formed during the second fiscal quarter of 2021, but has not yet commenced significant operations.

<sup>(3)</sup> Formed during the first fiscal quarter of 2019, but has not yet commenced significant operations.

<sup>(4)</sup> Acquired on March 11, 2020.

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.

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.

Fair Value of Financial Instruments

The Company adopted ASC 820, Fair Value Measurements and Disclosures ("ASC 820"). ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

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| |
|:---|
| Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |

---

The carrying value of cash, accounts receivable, accounts payables and accrued expenses are estimated by management to approximate fair value primarily due to the short-term nature of the instruments.

Revenue Recognition

The Company recognizes revenue in accordance with 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.

Revenue is primarily generated through our subsidiary, Digipath Labs, Inc., which recognizes revenue from the analytical testing of cannabis products for 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.

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 2018-07 (ASC 2018-07). 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.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the three months ended December 31, 2022 and 2021, potential dilutive securities of 91,161,317 and 50,368,696 shares issuable upon conversion of convertible notes payable, 6,020,000 and 6,020,000 shares issuable upon exercise of options, 15,387,050 and 2,535,001 shares issuable upon exercise of warrants, and 13,579,710 and 13,579,710 shares issuable upon conversion of Preferred A and Preferred B shares, respectively, had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, *Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity).* ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, which results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Additionally, ASU 2020-06 affects the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity's own equity. ASU 2020-06 allows entities to use a modified or full retrospective transition method and is effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact that this ASU may have on its consolidated financial statements.

**Note 2 – Going Concern**

As shown in the accompanying condensed consolidated financial statements, as of December 31, 2022, the Company had negative working capital of $1,465,347, accumulated recurring losses of $20,249,101, and only $155,832 of cash on hand, which 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. Management believes these factors will contribute toward achieving profitability.

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.

**Note 3 – Fair Value of Financial Instruments**

The Company discloses the fair value of certain assets and liabilities in accordance with ASC 820 – *Fair Value Measurement* ("ASC 820"). 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 following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of December 31, 2022 and September 30, 2022, respectively:

Summary of Financial Instruments at Fair Value on Recurring Basis

---

| | | | |
|:---|:---|:---|:---|
|  | Fair Value Measurements at December 31, 2022 | Fair Value Measurements at December 31, 2022 | Fair Value Measurements at December 31, 2022 |
|  | Level 1 | Level 2 | Level 3 |
| **Assets** |  |  |  |
| Cash | $155832 | $- | $- |
| **Liabilities** |  |  |  |
| Lease liabilities |  |  | 305246 |
| Notes payable |  | 791444 |  |
| Convertible notes payable, net of discounts of $97,387 |  |  | 1320849 |
| Convertible notes payable – related parties, net of discounts of $32,403 |  |  | 317597 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | Fair Value Measurements at September 30, 2022 | Fair Value Measurements at September 30, 2022 | Fair Value Measurements at September 30, 2022 |
|  | Level 1 | Level 2 | Level 3 |
| **Assets** |  |  |  |
| Cash | $56168 | $- | $- |
| **Liabilities** |  |  |  |
| Lease liabilities |  |  | 330510 |
| Notes payable |  | 806348 |  |
| Convertible notes payable, net of discounts of $45,039 |  |  | 1373195 |
| Convertible notes payable – related parties, net of discounts of $39,728 |  |  | 310272 |

---

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.

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the three months ended December 31, 2022.

**Note 4 – Related Party Transactions**

During the three months ended December 31, 2022 the Company incurred fees of $15,000 for services from its CFO. As of December 31, 2022 the Company has accrued a total of $30,000 in fees related to past services to its CFO.

During the three months ended December 31, 2022 the Company incurred fees of $21,000 for services from its Board of directors. As of December 31, 2022 the Company has accrued a total of $147,000 in fees related to past services to the Board of Directors.

**Note 5 – Note Receivable**

On various dates between December 28, 2018 and June 13, 2019, we loaned Northwest Analytical Labs, Inc. a total of $95,000. The loans bear interest at an annual rate of 10%, are evidenced by secured demand notes, and are secured by a lien on the borrower's assets. An allowance for doubtful accounts for the full value of the notes has been recorded due to the uncertainty of collectability.

On various dates between August 23, 2021 and September 30, 2022, we loaned C3 Labs, Inc. ("C3 Labs") a total of $1,047,649. The loans bore interest at an annual rate of 8%. These loans were evidenced by secured demand notes, and were secured by a lien on the borrower's assets and have a maturity date of August 23, 2022. The Company had recorded total accrued interest of $64,017 as of September 30, 2022.

The loans were made in connection with a potential acquisition of a controlling interest in C3 Labs pursuant to a letter of intent. On March 11, 2022, the Company notified the current owners of C3 Labs of its termination of the letter of intent and took possession of the equipment of C3 Labs ("C3 Equipment"), which it is in the process of being liquidated.

On December 8, 2022, the Company entered into an Asset Purchase Agreement with Invictus Wealth Group ("Invictus"), whereby the Company agreed to sell the C3 Equipment to Invictus for a total purchase price of $900,000. The purchase price consisted of an upfront payment of $275,000, and a Note Receivable ("Invictus Note") in the amount of $625,000. The Invictus Note has a maturity date of December 31, 2023, accrues interest at a rate of 10% per annum, and provides for principal payments of $100,000 each due on June 30, 2023 and September 30, 2023, with the final payment of $425,000 due on December 31, 2023. The Company has recorded a full allowance against the Invictus Note as collectability cannot be assured as of the date of this filing. As of December 31, 2022 and through the date of this filing, the Company has received $100,000 of the initial $275,000, and as a result the Company will continue to maintain possession of the C3 Equipment until the remainder of the upfront payment has been received.

**Note 6 – Fixed Assets**

Fixed assets consist of the following at December 31, 2022 and September 30, 2022:

Schedule of Fixed Assets

---

| | | |
|:---|:---|:---|
|  | December,<br>2022 | September 30,<br>2022 |
| Software | $125903 | $125903 |
| Office equipment | 80343 | 71601 |
| Furniture and fixtures | 29879 | 29879 |
| Lab equipment | 1400479 | 1455479 |
| Leasehold improvements | 510076 | 510076 |
| Lab equipment held under capital leases | 99193 | 99193 |
|  | 2245873 | 2292131 |
| Less: accumulated depreciation | (1867067) | (1831308) |
| &nbsp;&nbsp;&nbsp;Total | $378806 | $460823 |

---

Depreciation and amortization expense totaled $35,759 and $58,469 for the three months ended December 31, 2022 and 2021, respectively.

During the three months ended December 31, 2022, the Company recorded impairment expense in the amount of $55,000 related to equipment acquired with the anticipation of the C3 Labs acquisition. Upon the Company's decision to terminate the acquisition, the equipment was deemed to be impaired.

**Note 7 – Leases**

The Company leases its operating and office facility under a non-cancelable real property lease agreement that expires on August 31, 2025. The Company also has a financing lease for lab equipment subject to the recently adopted ASU 2016-02. In the locations in which it is economically feasible to continue to operate, management expects to enter into a new lease upon expiration. The real property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company's leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The components of lease expense were as follows:

Schedule of Components of Lease Expense

---

| | | |
|:---|:---|:---|
|  | For the<br>Three Months Ended<br>December 31,<br>2022 | For the<br>Three Months Ended<br>December 31,<br>2021 |
| Operating lease cost | $29718 | $29718 |
| Finance lease cost: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of assets |  | 8467 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | - | 809 |
| &nbsp;&nbsp;&nbsp;Total net lease cost | $29718 | $38994 |

---

Supplemental balance sheet information related to leases was as follows:

Schedule of Supplemental Balance Sheet Information

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | September 30,<br>2022 |
| **Operating leases:** |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease assets | $291869 | $316961 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 105649 | $100685 |
| &nbsp;&nbsp;&nbsp;Noncurrent operating lease liabilities | 199597 | 229825 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | $305246 | $330510 |
| **Finance lease:** |  |  |
| &nbsp;&nbsp;&nbsp;Equipment, at cost | $99193 | $99193 |
| &nbsp;&nbsp;&nbsp;Accumulated amortization | (64475) | (59516) |
| Equipment, net | $34718 | $39677 |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 2.67 years | 2.92 years |
| Weighted average discount rate: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 5.75% | 5.75% |

---

Supplemental cash flow and other information related to leases was as follows:

Schedule of Supplemental Cash Flow and Other Information

---

| | | |
|:---|:---|:---|
|  | For the Three<br>Months Ended<br>December 31,<br>2022 | For the Three<br>Months Ended<br>December 31,<br>2021 |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows used for operating leases | $29532 | $22582 |
| &nbsp;&nbsp;&nbsp;Financing cash flows used for finance leases | $- | $8467 |
| Leased assets obtained in exchange for lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Total operating lease liabilities | $- | $- |
| &nbsp;&nbsp;&nbsp;Total finance lease liabilities | $- | $- |

---

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities on a fiscal year basis, including common area maintenance fees, under non-cancelable operating leases as of December 31, 2022:

Schedule of Future Minimum Annual Lease Commitments Under Operating Leases

---

| | |
|:---|:---|
| Fiscal Year Ending | Minimum Lease |
| September 30, | Commitments |
| 2023 | $89936 |
| 2024 | 123543 |
| 2025 | 116891 |
| 2026 |  |
| 2027 | - |
| Total future undiscounted lease payments | 330370 |
| Less interest | 25124 |
| Present value of lease payments | 305246 |
| Less current portion | 105649 |
| Long-term operating lease liabilities | $199597 |

---

**Note 8 –Notes Payable**

Notes payable consists of the following at December 31, 2022 and September 30, 2022, respectively:

Schedule of Notes Payable

---

| | | |
|:---|:---|:---|
|  | December 31, 2022 | September 30, 2022 |
| On September 10, 2021, the Company issued a Secured Promissory note in the principal amount of $675,000 to US Canna Lab I, LLC (the "Canna Lab Note"). The Canna Lab Note carries interest at 12% per annum and is due on September 10, 2024, with monthly principal and interest payments of $22,419.66 beginning on October 1, 2021. In addition, the Company was advanced an additional $115,000 of funds during the year ended September 30, 2022 under the same terms as the original note. During the year ended September 30, 2022, the Company repaid $125,000 of the principal balance on the note. As a result of the Company not meeting the monthly payment obligations, the CannaLab Note is in technical default, however, no default notice has been provided by CannaLab as of the date of this filing. There are no additional obligations of the Company under default with the exception of being due on demand. | $665000 | $665000 |
| On December 26, 2019, the Company financed the purchase of $377,124 of lab equipment, in part, with the proceeds of a bank loan in the amount of $291,931. The loan bears interest at the rate of 5.75% per annum and requires monthly payments of $5,622 over the five-year term of the loan ending on December 26, 2024. The Company's obligations under this loan are secured by a lien on the purchased equipment. | 126444 | 141348 |
| Total notes payable | 791444 | 806348 |
| Less: current maturities | (726800) | (725920) |
| Notes payable | $64644 | $80428 |

---

The Company recorded interest expense pursuant to the stated interest rate and closing costs on the notes payable in the amount of $13,961 and $11,836 during the three months ended December 31, 2022 and 2021.

**Note 9 – Convertible Notes Payable**

Related Party Convertible notes payable consist of the following at December 31, 2022 and September 30, 2022, respectively:

Schedule of Related Party Convertible Notes Payable

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | September 30,<br>2022 |
| On February 10, 2020, the Company completed the sale to an accredited investor of a 9% Secured Convertible Promissory Note in the principal amount of $350,000. The Note matures on August 10, 2022, bears interest at a rate of 9% per annum, and was convertible into shares of the Company's common stock at a conversion price of $0.15 per share. On December 28, 2020, the conversion price was amended to $0.03 per share in exchange for an additional $50,000 of proceeds and the promissory note was increased to $400,000. The Company's obligations under the Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs, Inc., pursuant to a Security Agreement between the Company, Digipath Labs, Inc. and the investor. On December 29, 2020, the note holder converted $50,000 of principal into 1,666,667 shares of common stock at a conversion price of $0.03 per share. On August 8, 2022, the note holder agreed to extend the maturity date of the note to February 11, 2024. In exchange for the extension the Company agreed to issue 4,550,000 common shares, which were recorded as debt discount with a relative fair value of $43,788. As a result of the shares issued upon the extension agreement, the lender now holds more the 5% of the total outstanding common shares, and is therefore considered a related party. | $350000 | $350000 |
| Total convertible notes payable | 350000 | 350000 |
| Less: unamortized debt discounts | (32403) | (39728) |
|  | 317597 | 310272 |
| Less: current maturities | - | - |
| Convertible notes payable | $317597 | $310272 |

---

Convertible notes payable consist of the following at December 31, 2022 and September 30, 2022, respectively:

Schedule of Convertible Notes Payable

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | September 30,<br>2022 |
| On February 11, 2020, the Company completed the sale to an accredited investor of a 9% Secured Convertible Promissory Note in the principal amount of $50,000. The Note matures on August 11, 2022, bears interest at a rate of 9% per annum, and was convertible into shares of the Company's common stock at a conversion price of $0.15 per share. On December 28, 2020, the conversion price was amended to $0.03 per share in exchange for an additional $10,000 of proceeds and the promissory note was increased to $60,000. The Company's obligations under the Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs, Inc., pursuant to a Security Agreement between the Company, Digipath Labs, Inc. and the investor. On December 29, 2020, the note holder converted $10,000 of principal into 333,334 shares of common stock at a conversion price of $0.03 per share. On August 8, 2022, the note holder agreed to extend the maturity date of the note to February 11, 2024. In exchange for the extension, the Company agreed to issue 650,000 common shares, which were recorded as debt discount, with a relative fair value of $6,989. | $50000 | $50000 |
| On February 11, 2020, the Company completed the sale to an accredited investor of a 9% Secured Subordinated Convertible Promissory Note in the principal amount of $150,000. The Note matures on August 11, 2022, bears interest at a rate of 9% per annum, and was convertible into shares of the Company's common stock at a conversion price of $0.15 per share. On December 28, 2020, the conversion price was amended to $0.03 per share in exchange for an additional $50,000 of proceeds and the promissory note was increased to $200,000. The Company's obligations under the Note are secured by subordinated lien on the assets of the Company and its wholly-owned subsidiary Digipath Labs, Inc., pursuant to a Security Agreement between the Company, Digipath Labs, Inc. and the investor. On December 29, 2020, the note holder converted $50,000 of principal into 1,666,667 shares of common stock at a conversion price of $0.03 per share. On August 8, 2022, the note holder agreed to extend the maturity date of the note to February 11, 2024. In exchange for the extension the Company agreed to issue 1,950,000 common shares, which were recorded as debt discount, with a relative fair value of $20,968. | 150000 | 150000 |
| On September 23, 2019, the Company received proceeds of $200,000 on a senior secured convertible note that carries an 8% interest rate, which matures on August 10, 2022, as amended. The principal and interest were convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.11 per share. On September 30, 2020, the maturity date was extended to August 10, 2022 and the conversion price was amended to $0.03 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. On February 22, 2021, the noteholder converted $90,000 of principal into 3,000,000 shares of common stock at a conversion price of $0.03 per share. On September 30, 2021 the note was amended to add the outstanding short term notes and accrued interest into the principal balance, making the outstanding balance $355,470, as amended. As a result of the modification, the Company recorded an additional debt discount of $98,188, as a result of the beneficial conversion feature of the additional principal. On October 1, 2022, the Company further extended the maturity date to February 11, 2024. In connection with the modification, the Company issued warrants to purchase 4,621,105 shares of common stock at an exercise price of $0.0074, with a fair value of $32,166 which was recorded as a debt discount. | 355470 | 718234 |
| 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 August 10, 2022, as amended. The principal and interest were convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.14 per share. On September 30, 2020, the maturity date was extended to August 10, 2022 and the conversion price was amended to $0.03 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. On October 1, 2022, the Company further extended the maturity date to February 11, 2024. In connection with the modification, the Company issued warrants to purchase 4,550,000 shares of common stock at an exercise price of $0.0074 with a fair value of $31,671 which was recorded as a debt discount. | <br>350000 | <br>350000 |
| On October 1, 2022, The Company entered into a senior secured convertible note that carries an 8% interest rate, which matures on February 11, 2024. The Note documented the advances made during the year ended September 30, 2022 in the amount of $362,765, which were made under the terms of the September 23, 2019 note describe above. The principal and interest on the Note are convertible into common shares at a conversion price of $0.01. In connection with the issuance of the note, the Company issued warrants to purchase 4,715,945 shares of common stock at an exercise price of $0.0074 with a relative fair value of $30,102 which was recorded as a debt discount. | 362765 |  |
| 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 August 10, 2022, as amended. The principal and interest were convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.14 per share. On September 30, 2020, the maturity date was extended to August 10, 2022 and the conversion price was amended to $0.03 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. | 150000 | 150000 |
| Total convertible notes payable | 1418235 | 1418234 |
| Less: unamortized debt discounts | (97386) | (45039) |
| Total convertible debt | 1320849 | 1373195 |
| Less: current maturities | 150000 | 1198469 |
| Convertible notes payable | $1170849 | $174726 |

---

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 of $93,938 during the three months ended December 31, 2022. The discount is amortized on a straight-line basis from the dates of issuance until the earlier of the stated redemption date of the debt, as noted above, or the actual settlement date. The Company recorded debt amortization expense attributed to the aforementioned debt discount in the amounts of $48,916 and $19,766, during the three months ended December 31, 2022 and 2021, respectively. Unamortized discount as of December 31, 2022 is $129,790

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 $36,236 and $26,567 for the three months ended December 31, 2022 and 2021, respectively.

The Company recognized interest expense for the three months ended December 31, 2022 and 2021, respectively, as follows:

Schedule of Interest Expense

---

| | | |
|:---|:---|:---|
|  | December 31,<br>2022 | December 31,<br>2021 |
| Interest on capital leases | $1961 | $3601 |
| Interest on notes payable | 12000 | 17753 |
| Amortization of beneficial conversion features | 48916 | 19766 |
| Interest on convertible notes | 36236 | 28273 |
| &nbsp;&nbsp;&nbsp;Total interest expense | $99113 | $69393 |

---

**Note 10 – Stockholders' Equity**

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"), 1,500,000 have been designated as Series B Convertible Preferred Stock ("Series B Preferred"), and 1,000 shares have been designated as Series C Preferred Stock ("Series C Preferred") with the remaining 2,499,000 shares available for designation from time to time by the Board as set forth below. As of December 31, 2022, there were 1,047,942 shares of Series A Preferred issued and outstanding, 333,600 shares of Series B Preferred issued and outstanding and 1,000 shares of Series C 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 and each share of Series B Preferred is currently convertible into twenty-five shares of common stock.

*Series A*

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 1,047,942 shares of Series A Preferred outstanding at December 31, 2022 are convertible into 5,239,710 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.

Additional terms of the Series A Preferred and include the following:

● The
 shares of Series A Preferred are entitled to dividends when, as and if declared by the Board as to the shares of the common stock
 of the Company into which such Series A Preferred may then be converted, subject to the 4.99 % beneficial ownership limitation described
 above.

● Upon
 the liquidation or dissolution of the Company, or any merger or sale of all or substantially all of the assets, the shares of Series
 A Preferred are entitled to receive, prior to any distribution to the holders of common stock, 100 % of the purchase price per share
 of Series A Preferred plus all accrued but unpaid dividends.

● The
 Series A Preferred plus all declared but unpaid dividends thereon automatically will be converted into common stock, at the then
 applicable conversion rate, upon the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred.

● Each
 share of Series A Preferred will carry a number of votes equal to the number of shares of common stock into which such Series A Preferred
 may then be converted, subject to the 4.99 % beneficial ownership limitation described above. The Series A Preferred generally will
 vote together with the common stock and not as a separate class, except as provided below.

● Consent
 of the holders of the outstanding Series A Preferred is required in order for the Company to: (i) amend or change the rights, preferences,
 privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred; (ii) authorize, create or issue
 shares of any class of stock having rights, preferences, privileges or powers superior to the Series A Preferred; (iii) reclassify
 any outstanding shares into shares having rights, preferences, privileges or powers superior to the Series A Preferred; or (iv) amend
 the Company's Articles of Incorporation or Bylaws in a manner that adversely affects the rights of the Series A Preferred.

● Pursuant
 to the Securities Purchase Agreements, holders of Series A Preferred are entitled to unlimited "piggyback" registration
 rights on registrations by the Company, subject to pro rata cutback at any underwriter's discretion.

*Series B*

The Series B Preferred were designated on December 29, 2021. Each share of Series B Preferred has a Stated Value of $1.00 and is currently convertible into common stock at a conversion price equal to $0.04. The conversion price of the Series B Preferred is subject to equitable adjustment in the event of a stock split, stock dividend or similar event with respect to the common stock, and in the event of the issuance of common stock by the Company below the conversion price, subject to customary exceptions. At the current conversion price, the 333,600 shares of Series B Preferred outstanding at December 31, 2022 are convertible into 8,340,000 shares of the common stock of the Company. No holder is permitted to convert its shares of Series B 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.

Additional terms of the Series B Preferred and include the following:

● The
 shares of Series B Preferred are not entitled to dividends, provided that if dividends are paid on the shares of common stock of
 the Company, the Series B Preferred will be entitled to dividends based on the number shares of common stock which the Series B Preferred
 may then be converted.

● Upon
 the liquidation or dissolution of the Company, or any merger or sale of all or substantially all of the assets, or upon a change
 in control whereby a stockholder gains control of 50% or more of the outstanding shares of common stock, the shares of Series B Preferred
 are entitled to receive, prior to any distribution to the holders of common stock, 100% of the purchase price per share of Series
 B Preferred plus all accrued but unpaid dividends.

● Each
 share of Series B Preferred carries a number of votes equal to the number of shares of common stock into which such Series B Preferred
 may then be converted.

Due to the change in control provision of the Series B Preferred, the Series B Preferred is classified as temporary equity on the balance sheet.

*Series C*

The Series C Preferred were designated on July 20, 2022. The principal feature of the Series C Preferred Stock is that it provides the holder thereof, so long as he or she is an executive officer of the Company, with the ability to vote with the holders of the Company's common stock on all matters presented to the holders of common stock, whether at a special or annual meeting, by written action in lieu of a meeting or otherwise, on the basis of 200,000 votes for each share of Series C Preferred Stock. The shares of Series C Preferred Stock are not convertible into common stock, are not entitled to dividends, are not subject to redemption, and have a stated value of $0.10 per share payable on any liquidation of the Company in preference to any payment payable to the holders of common stock.

Common Stock

Common stock consists of $0.001 par value, 250,000,000 shares authorized, of which 82,296,820 shares were issued and outstanding as of December 31, 2022.

During the three months ended December 31, 2022, the Company issued 7,150,000 shares of its common stock in settlement of a common stock payable in the amount of $71,745.

**Note 11 – 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 terminated on March 5, 2022. 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.

Amortization of Stock-Based Compensation

A total of $8,306 and $33,457 of stock-based compensation expense was recognized during the three months ended December 30, 2022 and 2021, respectively, as a result of the vesting of common stock options issued. As of December 31, 2022 a total of $6,876 of unamortized expense remains to amortized over the vesting period.

The following is a summary of information about the stock options outstanding at December 31, 2022.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | Shares Underlying | Shares Underlying |
| Shares Underlying Options Outstanding | Shares Underlying Options Outstanding | Shares Underlying Options Outstanding | Shares Underlying Options Outstanding | Options Exercisable | Options Exercisable |
|  |  | Weighted |  |  |  |
|  | Shares | Average | Weighted | Shares | Weighted |
| Range of | Underlying | Remaining | Average | Underlying | Average |
| Exercise | Options | Contractual | Exercise | Options | Exercise |
| Prices | Outstanding | Life | Price | Exercisable | Price |
| $0.02 – $0.13 | 6020000 | 5.76 years | $0.07 | 5680714 | $0.07 |

---

The following is a summary of activity of outstanding common stock options:

Schedule of Activity of Outstanding Common Stock Options

---

| | | |
|:---|:---|:---|
|  |<br>Number<br>of Shares | Weighted<br>Average<br>Exercise<br>Price |
| Balance, September 30, 2022 | 6020000 | $0.07 |
| &nbsp;&nbsp;&nbsp;Options issued |  |  |
| &nbsp;&nbsp;&nbsp;Options forfeited | - | - |
| Balance, December 31, 2022 | 6020000 | $0.07 |
| Exercisable, December 31, 2022 | 5680714 | $0.07 |

---

As of December 31, 2022, these options in the aggregate had no intrinsic value as the per share market price of $0.007 of the Company's common stock as of such date was less than the weighted-average exercise price of these options of $0.07.

**Note 12 – Common Stock Warrants**

Warrants to purchase a total of 15,387,050 shares of common stock were outstanding as of December 31, 2022.

The following is a summary of information about our warrants to purchase common stock outstanding at September 30, 2022 (including those issued to both investors and service providers).

Summary of Common Stock Warrants Outstanding

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | Shares Underlying | Shares Underlying |
| Shares Underlying Warrants Outstanding | Shares Underlying Warrants Outstanding | Shares Underlying Warrants Outstanding | Shares Underlying Warrants Outstanding | Warrants Exercisable | Warrants Exercisable |
|  |  | Weighted |  |  |  |
|  | Shares | Average | Weighted | Shares | Weighted |
| Range of | Underlying | Remaining | Average | Underlying | Average |
| Exercise | Warrants | Contractual | Exercise | Warrants | Exercise |
| Prices | Outstanding | Life | Price | Exercisable | Price |
| $0.10-0.007 | 15387050 | 9.51 years | $0.02 | 15387050 | $0.02 |

---

The following is a summary of activity of outstanding common stock warrants:

---

| | | |
|:---|:---|:---|
|  |<br>Number<br>of Shares | Weighted<br>Average<br>Exercise<br>Price |
| Balance, September 30, 2022 | 1500000 | $0.10 |
| &nbsp;&nbsp;&nbsp;Warrants granted | 13887050 | $0.01 |
| &nbsp;&nbsp;&nbsp;Warrants expired | - | - |
| Balance, December 31, 2022 | 15387050 | $0.02 |
| Exercisable, December 31, 2022 | 15387050 | $0.02 |

---

As of December 31, 2022, these warrants in the aggregate had no intrinsic value as the per share market price of $0.007 of the Company's common stock as of such date was less than the weighted-average exercise price of these warrants of $0.02.

**Note 13 – Commitments and Contingencies**

Legal Contingencies

There are no material pending legal proceedings to which we are a party or to which any of our property is subject, nor are there any such proceedings known to be contemplated by governmental authorities. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

**Note 14 – Subsequent Events**

On January 18, 2023, the Company issued 4,400,000 shares of common stock to the officers and directors of the Company for services rendered with a fair value of $32,120 based on the common stock price on the date of issuance.

On January 26, 2023, the Company issued 2,100,000 options to purchase shares of common stock to certain employees of the Company for services rendered. The options have an exercise price of $0.0056, vest in nine months and have a term of 5.75 years from the date of issuance.

---

| | |
|:---|:---|
| **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, 2022 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, 2022 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") supports the cannabis industry's best practices for reliable testing, cannabis education and training. Our 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 that have legalized the sale of cannabis, beginning with California.

**Results of Operations for the Three Months Ended December 31, 2022 and 2021:**

The following table summarizes selected items from the statement of operations for the three months ended December 31, 2022 and 2021.

---

| | | | |
|:---|:---|:---|:---|
|  | Three Months Ended December 31, | Three Months Ended December 31, | |
|  | 2022 | 2021 | Increase /<br>(Decrease) |
| Revenues | $726755 | $699585 | $27170 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 422835 | 422601 | 234 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 303920 | 276984 | 26936 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 306483 | 240964 | 65519 |
| &nbsp;&nbsp;&nbsp;Professional fees | 69969 | 255749 | (185780) |
| &nbsp;&nbsp;&nbsp;Change in allowance for doubtful accounts | 13685 | (2139) | 15824 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses: | 390137 | 494574 | (104437) |
| Operating loss | (86217) | (217590) | 131373 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (154113) | (60013) | (94100) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(240330) | $(277603) | $37273 |

---

**Revenues**

Aggregate revenues for the three months ended December 31, 2022 were $726,775, compared to revenues of $699,585 during the three months ended December 31, 2021, an increase of $27,170 or 4%. The increase in revenue was due to the increase in tourism in Nevada during the current period and our customers' improved cash flows, in comparison to the prior year period.

**Cost of Sales**

Cost of sales for the three months ended December 31, 2022 were $422,835, compared to $422,601 during the three months ended December 31, 2021, an increase of $234. Cost of sales consists primarily of labor, depreciation, maintenance on lab equipment, and supplies consumed in our testing operations. Our gross margins were approximately 42% during the three months ended December 31, 2022, compared to 40% during the three months ended December 31, 2021, which translated to $26,936 of increased gross profit. Our margins increased in the current period due to the increase in revenues.

**General and Administrative Expenses**

General and administrative expenses for the three months ended December 31, 2022 were $306,483, compared to $240,964 during the three months ended December 31, 2021, an increase of $65,519, or 27%. The expenses consisted primarily of marketing, rent, salaries and wages, and travel expenses. General and administrative expenses included non-cash, stock-based compensation of $0 during the three months ended December 31, 2022 and 2021, respectively. General and administrative expenses increased primarily due to increased corporate overhead activities and increased audit fees from Nevada's Cannabis Control Board.

**Professional Fees**

Professional fees for the three months ended December 31, 2022 were $69,969, compared to $255,749 during the three months ended December 31, 2021, a decrease of $185,780, or 73%. Professional fees included non-cash, stock-based compensation of $8,603 and $33,457 during the three months ended December 31, 2022 and 2021, respectively. Professional fees decreased primarily due to decreased corporate consulting services during the current period as we decreased our focus on expansion efforts.

**Change in Allowance for Doubtful Accounts**

Our change in allowance for doubtful accounts for the three months ended December 31, 2022 resulted in $13,685 of expense, compared to $2,139 of income during the three months ended December 31, 2021, a decline of $15,824, or 740%. Our change in allowance for doubtful accounts declined during the current period primarily as our allowance for doubtful accounts increased from $139,279 to $155,141 during the quarter.

**Operating Loss**

Our operating loss for the three months ended December 31, 2022 was $86,217, compared to an operating loss of $217,590 during the three months ended December 31, 2021, a decrease of $131,373, or 60%. Our operating loss decreased primarily due to our decreased professional fees.

**Other Income (Expense)**

Other expense, on a net basis, for the three months ended December 31, 2022 was $154,113, compared to other expense, on a net basis, of $60,013 during the three months ended December 31, 2021, a net increase of $94,100. Other expense consisted of interest expense of $99,113 and an impairment on equipment of $55,000 for the three months ended December 31, 2022.

**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 three-month periods ended December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| Operating Activities | $17234 | $(177158) |
| Investing Activities | 97334 | (408482) |
| Financing Activities | (14904) | 380013 |
| Net Decrease in Cash | $99664 | $(205627) |

---

Net Cash Provided by (Used in) Operating Activities

During the three months ended December 31, 2022, net cash provided by operating activities was $17,234, compared to net cash used in operating activities of $177,158 for the same period ended December 31, 2021. The increase in cash provided by operating activities was primarily attributable to our decrease in net loss and accounts receivable, along with increases in accounts payable and accrued expenses.

Net Cash Provided by (Used in) Investing Activities

During the three months ended December 31, 2022, net cash provided by investing activities was $97,334, compared to $408,482 used in investing activities for the same period ended December 31, 2021. The cash provided by investing activities in the current period was a result of the sale of the collateralized assets from the note receivable compared to cash used in investing activities for the prior period which was a result of loans we made in connection with a potential acquisition.

Net Cash Provided by (Used in) Financing Activities

During the three months ended December 31, 2022, net cash used in financing activities was $14,904, compared to net cash provided by financing activities of $380,013 for the same period ended December 31, 2021. The current period consisted of $14,904 of principal payments on an equipment loan, compared to $400,000 of proceeds received on debt financing, proceeds of $55,600 from the sale of preferred stock, as offset by $8,467 of principal payments on an equipment lease and $14,142 of principal payments on an equipment loan and $52,978 of principal payments made on convertible notes in the comparative period in the prior year.

**Ability to Continue as a Going Concern**

As of December 31, 2022, our balance of cash on hand was $155,832, and we had negative working capital of $1,465,346 and an accumulated deficit of $20,249,101 resulting from recurring losses. 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.

**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 recognizes revenue in accordance with ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of lab testing services through our subsidiary Digipath Labs, Inc.

Revenue is primarily generated through our subsidiary, Digipath Labs, Inc., which recognizes revenue from the analytical testing of cannabis products for 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.

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 2018-07 (ASC 2018-07). All transactions in which the consideration provided in exchange for the purchase of goods or services consists of 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

**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 December 31, 2022. 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 December 31, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not 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.

**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 December 31, 2022:

On October 1, 2022, the Company issued 7,150,000 shares of its common stock in settlement of the common stock payable in the amount of $71,745. The transaction was effected pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended.

On October 1, 2022, the Company entered into a senior secured convertible note that carries an 8% interest rate, which matures on February 11, 2024. The principal and interest on the Note are convertible into common shares at a conversion price of $0.03.

On October 1, 2022, the Company, in connection with the new debt issuance and extension of two additional senior secured convertible notes, issued warrants to purchase 13,887,050 shares of common stock at an exercise price of $0.0074 which have a term of 10 years from the date of issuance.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

None.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**ITEM 5. OTHER INFORMATION.**

None.

**ITEM 6. EXHIBITS**.

---

| | |
|:---|:---|
| Exhibit | Description |
| 2.1 | [Stock Purchase Agreement between Digipath, Inc., VSSL Enterprises Ltd., Kyle Joseph Remenda, Philippe Olivier Henry, PhD, Audim Ventures Ltd. and Britt Ash Enterprises Ltd., dated March 9, 2020 (incorporated by reference to Exhibit 2.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on March 16, 2020)](https://www.sec.gov/Archives/edgar/data/1502966/000149315220003956/ex2-1.htm) |
| 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)](https://www.sec.gov/Archives/edgar/data/1502966/000150296611000034/exhibit3_1.htm) |
| 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)](https://www.sec.gov/Archives/edgar/data/1502966/000150296611000034/exhibit3_2.htm) |
| 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)](https://www.sec.gov/Archives/edgar/data/1502966/000130841114000077/exhibit3_1.htm) |
| 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)](https://www.sec.gov/Archives/edgar/data/1502966/000130841114000077/exhibit3_2.htm) |
| 3.5 | [Certificate of Amendment to Articles of Incorporation dated May 22, 2015 (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 May 26, 2015)](https://www.sec.gov/Archives/edgar/data/1502966/000149315215002231/ex3-1.htm) |
| 3.6 | [Certificate of Amendment to Articles of Incorporation dated May 14, 2019 (incorporated by reference to Exhibit 3.6 of the Current Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 13, 2019)](https://www.sec.gov/Archives/edgar/data/1502966/000149315219012125/ex3-6.htm) |
| 3.7 | [Certificate of Designations of the Series B Preferred Stock dated December 29, 2021 (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 January 6, 2022)](https://www.sec.gov/Archives/edgar/data/1502966/000149315222000553/ex3-1.htm) |
| 4.1 | [Form of 8% Senior Secured Convertible Notes due December 31, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on November 21, 2018)](https://www.sec.gov/Archives/edgar/data/1502966/000149315218016631/ex4-1.htm) |
| 4.2 | [Form of 8% Senior Secured Convertible Notes due September 23, 2020 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on September 26, 2019)](https://www.sec.gov/Archives/edgar/data/1502966/000149315219014635/ex4-1.htm) |
| 4.3 | [9% Secured Convertible Note, between Digipath, Inc. and holder, due August 10, 2022 (incorporated by reference to Exhibit 4.3 of the Current Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)](https://www.sec.gov/Archives/edgar/data/1502966/000149315220002273/ex4-3.htm) |
| 4.4 | [9% Secured Subordinated Convertible Note, between Digipath, Inc. and holder, due August 11, 2022 (incorporated by reference to Exhibit 4.4 of the Current Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)](https://www.sec.gov/Archives/edgar/data/1502966/000149315220002273/ex4-4.htm) |
| 4.5 | [9% Secured Subordinated Convertible Note, between Digipath, Inc. and holder, due August 11, 2022 (incorporated by reference to Exhibit 4.5 of the Current Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on May 15, 2020)](https://www.sec.gov/Archives/edgar/data/1502966/000149315220009153/ex4-5.htm) |
| 4.6 | [Form of Amendment to 9% Secured Convertible Note, between Digipath, Inc. and holder, due August 10, 2022 (incorporated by reference to Exhibit 4.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on January 6, 2021)](https://www.sec.gov/Archives/edgar/data/1502966/000149315221000321/ex4-1.htm) |
| 31.1\* | [Section 302 Certification of Principal Executive Officer](ex31-1.htm) |
| 31.2\* | [Section 302 Certification of Principal Financial Officer](ex31-2.htm) |
| 32.1\* | [Section 906 Certification of Principal Executive Officer](ex32-1.htm) |
| 32.2\* | [Section 906 Certification of Principal Financial Officer](ex32-2.htm) |
| 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.

**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: February 14, 2023

---

| | |
|:---|:---|
| DIGIPATH, INC. | DIGIPATH, INC. |
| By: | */s/ Todd Denkin* |
| Name: | Todd Denkin |
| Title: | Chief Executive Officer |
| By: | */s/ A. Stone Douglass* |
| Name: | A. Stone Douglass |
| Title: | Chief Financial Officer |

---

## Exhibit 31.1

**EXHIBIT 31.1**

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

---

| | |
|:---|:---|
| I, Todd Denkin, certify that: | I, Todd Denkin, certify that: |
| 1. | I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended December 31, 2022 of Digipath, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly
 during the period in which this report is being prepared;

b. Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The
 registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
 financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
 persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's
 internal control over financial reporting.

Dated: February 14, 2023

---

| |
|:---|
| */s/ Todd Denkin* |
| Todd Denkin, Principal Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, A. Stone Douglass, certify that:

1. I
 have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended December 31, 2022 of Digipath, Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly
 during the period in which this report is being prepared;

b. Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The
 registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
 financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
 persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's
 internal control over financial reporting.

Date: February 14, 2023

---

| |
|:---|
| */s/ A. Stone Douglass* |
| A. Stone Douglass, Chief Financial Officer |
| (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Digipath, Inc. (the "Company") on Form 10-Q for the period ending December 31, 2022 (the "Report") I, Todd Denkin, Principal Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

Dated: February 14, 2023

---

| |
|:---|
| */s/ Todd Denkin* |
| Todd Denkin, Principal Executive Officer |

---

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

## Exhibit 32.2

**Exhibit 32.2**

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Digipath, Inc. (the "Company") on Form 10-Q for the period ending December 31, 2022 (the "Report") I, A. Stone Douglass, Chief Financial Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

Dated: February 14, 2023

---

| |
|:---|
| */s/ A. Stone Douglass* |
| A. Stone Douglass, Chief Financial Officer |

---

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.