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 ~~March~~December 31, 2023

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

For the transition period from __________ to __________

Commission File Number 000-54239

Digipath, Inc.

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

Nevada

27-3601979

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

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

(702) 527-2060

(Registrant’s telephone number, including area code)

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

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

☒

☐

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

☒

☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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

☐

☒

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

The number of shares of registrant’s common stock outstanding as of ~~May 26, 2023~~February 14, 2024 was ~~82,296,820~~87,096,820.

TABLE OF CONTENTS

		Page
		No.
PART I - FINANCIAL INFORMATION		3
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	3
	Consolidated Balance Sheets as of ~~March~~December 31, 2023 (Unaudited) and September 30, ~~2022~~2023	3
	Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~March~~December 31, 2023 and 2022 (Unaudited)	4
	Consolidated Statements of Stockholders’ Deficit for the ~~Six~~Three Months Ended ~~March~~December 31, 2023 and 2022 (Unaudited)	5
	Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~March~~December 31, 2023 and 2022 (Unaudited)	6
	Notes to the Consolidated Financial Statements (Unaudited)	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2019
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2422
ITEM 4.	CONTROLS AND PROCEDURES	2422
PART II - OTHER INFORMATION		2523
ITEM 1.	Legal Proceedings	2523
ITEM 1A.	RISK FACTORS	2523
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2523
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2523
ITEM 4.	MINE SAFETY DISCLOSURES	2523
ITEM 5.	OTHER INFORMATION	2523
ITEM 6.	EXHIBITS	2623
	SIGNATURES	2725

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

DIGIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2023			September 30, 2022			December 31, 2023			September 30, 2023
	(Unaudited)						(Unaudited)
Assets

Current assets:
Cash	$	115,868		$	56,168		$	308,252		$	271,006
Note receivable		-			100,000
Note receivable, net of allowance of $625,000								-			-
Other current assets		11,450			12,739			8,090			8,570
Assets held for sale - current		358,661			393,197			556,023			486,222
Total current assets		485,979			562,104			872,365			765,798

Fixed assets, net		-			55,000
Assets held for sale – long term		627,048			722,784			648,498			643,666
Total non-current assets		627,048			777,784			648,498			643,666

Total Assets	$	1,113,027		$	1,339,888		$	1,520,863		$	1,409,464

Liabilities and Stockholders’ Deficit

Current liabilities:
Accounts payable	$	248,942		$	215,558		$	92,220		$	122,094
Accrued expenses		341,544			345,797			320,235			328,491
Accrued expenses – related party								17,760			12,390
Current maturities of notes payable		665,000			665,000			595,965			565,000
Current maturities of convertible notes payable, net of discounts		1,342,383			1,198,469			1,407,945			1,385,932
Current maturities of convertible notes payable related parties, net of discounts		324,762			-			346,577			339,252
Liabilities held for sale - current		557,163			529,085			308,532			368,655
Total current liabilities		3,479,794			2,953,909			3,089,234			3,121,814

Non-current liabilities:
Convertible notes payable related parties, net of discounts		-			310,272
Convertible notes payable, net of discounts and current maturities		-			174,726
Liabilities held for sale – long term		206,865			310,253			150,336			159,156
Total non-current liabilities		206,865			795,251			150,336			159,156

Total Liabilities		3,686,659			3,749,160			3,239,570			3,280,970

Series B convertible preferred stock, $0.001 par value, 1,500,000 shares authorized; 333,600 shares issued and outstanding as of March 31, 2023 and September 30, 2022		333,600			333,600
Series B convertible preferred stock, $0.001 par value, 1,500,000 shares authorized; 333,600 shares issued and outstanding as of December 31, 2023 and September 30, 2023								333,600			333,600

Commitments and Contingencies								-			-

Stockholders’ Deficit:
Series A convertible preferred stock, $0.001 par value, 6,000,000 shares authorized; 1,047,942 shares issued and outstanding as of March 31, 2023 and September 30, 2022		1,048			1,048
Series C convertible preferred stock, $0.001 par value, 1,000 shares authorized; 0 and 1,000 shares issued and outstanding as of March 31, 2023 and September 30, 2022, respectively		-			1
Preferred stock, value		-			-
Common stock, $0.001 par value, 250,000,000 shares authorized; 82,296,820 and 75,146,820 shares issued and outstanding at March 31, 2023 and September 30, 2022, respectively		82,297			75,147
Common stock payable		32,120			71,745
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, 2023 and September 30, 2023								1,048			1,048
Series C convertible preferred stock, $0.001 par value, 1,000 shares authorized; 0 shares issued and outstanding as of December 31, 2023 and September 30, 2023, respectively								-			-
Preferred stock value								-			-
Common stock, $0.001 par value, 250,000,000 shares authorized; 87,096,820 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively								87,097			87,097
Additional paid-in capital		17,293,902			17,117,958			17,469,899			17,468,746
Accumulated deficit		(20,316,599	)		(20,008,771	)		(19,610,351	)		(19,761,997	)

Total Stockholders’ Deficit		(2,907,232	)		(2,742,872	)		(2,052,307	)		(2,205,106	)

Total Liabilities and Stockholders’ Deficit	$	1,113,027		$	1,339,888		$	1,520,863		$	1,409,464

See accompanying notes to unaudited consolidated financial statements.

DIGIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

													2023			2022
	For the Three Months Ended						For the Six Months Ended						For the Three Months Ended
	March 31,						March 31,						December 31,
	2023			2022			2023			2022 revised			2023			2022

Revenues	$	-		$	-		$	-		$	-		$	-		$	-
Cost of sales		-			-			-			-			-			-
Gross profit		-			-			-			-			-			-

Operating expenses:
General and administrative		45,674			42,479			85,198			82,135			14,743			39,524
Professional fees		128,440			259,977			175,637			470,822			55,821			67,812
Total operating expenses		174,114			302,456			260,835			552,957			70,564			107,336

Operating loss		(174,114	)		(302,456	)		(260,835	)		(552,957	)		(70,564	)		(107,336	)

Other income (expense):
Other Expense		-			-			(55,000	)		-			-			(55,000	)
Recovery of previously written off receivables		135,000			-			135,000			-
Interest income		-			15,295			-			24,675
Other income														13,896			-
Interest expense		(82,707	)		(70,814	)		(179,859	)		(136,675	)		(84,313	)		(97,152	)
Total other income (expense)		52,293			(55,519	)		(99,859	)		(112,000	)
Total other expense														(70,417	)		(152,152	)

Net loss from continuing operations		(121,821	)		(357,975	)		(360,694	)		(664,957	)		(140,981	)		(259,488	)
Net income (loss) from discontinued operations		54,323			(15,621	)		52,866			13,758
Net loss		(67,498	)		(373,596	)		(307,828	)		(651,199	)
Preferred deemed dividend		-			-			-			(192,154	)
Net loss to common shareholders	$	(67,498	)	$	(373,596	)	$	(307,828	)	$	(843,353	)
Net income from discontinued operations														292,627			19,158
Net income (loss)													$	151,646		$	(240,330	)

Weighted average number of common shares outstanding – basic		82,296,820			74,019,042			82,257,534			73,194,439			87,096,820			82,219,103
Weighted average number of common shares outstanding – fully diluted		82,296,820			74,019,042			82,257,534			73,194,439			87,096,820			82,219,103

Net loss per share from continuing operations – basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.00	)
Net income (loss) per share from discontinued operations – basic	$	0.00		$	(0.00	)	$	0.00		$	0.00
Net loss per share – basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)
Net income per share from discontinued operations – basic													$	0.00		$	0.00
Net income (loss) per share – basic													$	0.00		$	(0.00	)

Net loss per share from continuing operations – diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.00	)
Net income (loss) per share from discontinued operations – diluted	$	0.00		$	(0.00	)	$	0.00		$	0.00
Net loss per share – diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)
Net income per share from discontinued operations – diluted													$	0.00		$	0.00
Net income (loss) per share – diluted													$	0.00		$	(0.00	)

See accompanying notes to unaudited consolidated financial statements.

DI~~DIGIPATH,~~GIPATH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

��
Series B Convertible
Preferred Stock Series A Convertible
Preferred Stock Series C
Preferred Stock Common Stock Stock Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Payable Capital Deficit Deficit

Balance, September 30, 2022 333,600 $ 333,600 1,047,942 $ 1,048 1,000 $       1 75,146,820 $ 75,147 $ 71,745 $ 17,117,958 $ (20,008,771 ) $ (2,742,872 )

Issuance of common shares to settle stock payable - - - - - - 7,150,000 7,150 (71,745 ) 64,595 - -

Warrants issued as debt financing costs - - - - - - - - - 93,938 - 93,938

Stock-based compensation - - - - - - - - - 8,306 - 8,306

Net loss - - - - - - - - - - (240,330 ) (240,330 )

Balance, December 31, 2022 333,600 333,600 1,047,942 1,048 1,000 1 82,296,820 82,297 - 17,284,797 (20,249,101 ) (2,880,958 )

Repurchased of preferred C stock - - - - (1,000 ) (1 ) 0 0 0 (99 ) - (100 )

Common shares to be issued for compensation
-

-

-

-

-

-

-

-

32,120
- -
32,120

Stock-based compensation - - - - - - - - - 9,204 - 9,204

Net loss - - - - - - - - - - (67,498 ) (67,498 )

Balance, March 31, 2023 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 82,296,820 $ 82,297 $ 32,120 $ 17,293,902 $ (20,316,599 ) $ (2,907,232 )

Series B Convertible
Preferred Stock Series A Convertible
Preferred Stock Series C
Preferred Stock Common Stock Stock Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Payable Capital Deficit Deficit

Balance, September 30, 2023 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 87,096,820 $ 87,097 $ - $ 17,468,746 $ (19,761,997 ) $ (2,205,106 )

Stock-based compensation - - - - - - - - - 1,153 - 1,153

Net income - - - - - - - - - - 151,646 151,646

Balance, December 31, 2023 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 87,096,820 $ 87,097 - $ 17,469,899 $ (19,610,351 ) $ (2,052,307 )
Series B
Convertible
Preferred Stock Series A
Convertible
Preferred Stock Series C
Preferred
Stock Common
Stock Stock Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Payable Capital Revised Deficit Revised Deficit

Balance, September 30, 2021 - - 1,325,942 1,326    -       - 71,230,153 71,230       -     16,825,765    (17,951,653 ) (1,053,332 )

Series B Preferred shares sold for cash 55,600 55,600 - - - - - - - - - -

Conversion of Series A Preferred Shares into Series B Preferred 278,000 278,000 (278,000 ) (278 ) - - - - - (85,568 ) - (85,846 )

Common stock issued for services - - - - - - 1,500,000 1,500 - 51,000 - 52,500

Stock-based compensation - - - - - - - - - 33,457 - 33,457

Deemed dividend on preferred exchange - - - - - - - - - (192,154 ) - (192,154 )

Net loss - - - - - - - - - - (277,603 ) (277,603 )

Balance, December 31, 2021 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 72,730,153 $ 72,730 $ - $ 16,632,500 $ (18,229,256 ) $ (1,522,978 )
Balance 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 72,730,153 $ 72,730 $ - $ 16,632,500 $ (18,229,256 ) $ (1,522,978 )

Common Shares issued for settlement of accounts payable - - - - - - 250,000 250 - 7,250 - 7,500

Stock-based compensation - - - - - - 2,166,667 2,167 - 101,297 - 103,464

Net loss - - - - - - - - - - (373,596 ) (373,596 )

Balance, March 31, 2022 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 75,146,820 $ 75,147 $ - $ 16,741,047 $ (18,602,852 ) $ (1,785,610 )
Balance 333,600 $ 333,600 1,047,942 $ 1,048 - $ - 75,146,820 $ 75,147 $ - $ 16,741,047 $ (18,602,852 ) $ (1,785,610 )
Series B Convertible
Preferred Stock Series A Convertible
Preferred Stock Series C
Preferred Stock Common Stock Stock Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Payable Capital Deficit Deficit

Balance, September 30, 2022 333,600 $ 333,600 1,047,942 $ 1,048 1,000 $ 1 75,146,820 $ 75,147 $ 71,745 $ 17,117,958 $ (20,008,771 ) $ (2,742,872 )
Balance 333,600 $ 333,600 1,047,942 $ 1,048 1,000 $ 1 75,146,820 $ 75,147 $ 71,745 $ 17,117,958 $ (20,008,771 ) $ (2,742,872 )

Issuance of common shares to settle stock payable - - - - - - 7,150,000 7,150 (71,745 ) 64,595 - -

Warrants issued as debt financing costs - - - - - - - - - 93,938 - 93,938

Stock-based compensation - - - - - - - - - 8,306 - 8,306

Net loss - - - - - - - - - - (240,330 ) (240,330 )
Net income (loss) - - - - - - - - - - (240,330 ) (240,330 )

Balance, December 31, 2022 333,600 $ 333,600 1,047,942 $ 1,048 1,000 $ 1 82,296,820 $ 82,297 - $ 17,284,797 $ (20,249,101 ) $ (2,880,958 )
Balance 333,600 $ 333,600 1,047,942 $ 1,048 1,000 $ 1 82,296,820 $ 82,297 - $ 17,284,797 $ (20,249,101 ) $ (2,880,958 )

See accompanying notes to unaudited consolidated financial statements.

5

DIGIPATH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

2023 2022 2023 2022 Revised
For the Six Months Ended For the Three Months Ended
March 31, December 31,
2023 2022 Revised 2023 2022
Cash flows from operating activities
Net loss from continuing operations $ (360,694 ) $ (664,957 ) $ (140,981 ) $ (259,488 )
Adjustments to reconcile net loss to net cash used in operating activities:
Recovery of previously written off receivables (135,000 ) -
Stock-based compensation 49,630 189,421 1,153 8,306
Amortization of debt discounts 77,616 39,103 29,338 48,916
Impairment of fixed assets 55,000 - - 55,000
Decrease (increase) in assets:
Other current assets 1,289 (24,509 ) 480 4,904
Increase (decrease) in liabilities:
Accounts payable 33,384 53,726 (24,082 ) 33,087
Accrued expenses (4,253 ) 103,086 17,286 (34,508 )
Accrued expenses – related parties 5,000 12,000
Net cash used in operating activities from continuing operations (283,028 ) (304,130 ) (111,806 ) (131,784 )
Net cash provided by operating activities from discontinued operations 141,538 113,844 176,503 149,017
Net cash used in operating activities (141,490 ) (190,286 )
Net cash provided by operating activities 64,697 17,233

Cash flows from investing activities
Advance of note receivable - (773,622 )
Proceeds from sale of collateralized assets 235,000 - - 100,000
Net cash provided by (used in) investing activities from continuing operations 235,000 (773,622 ) - 100,000
Net cash used in investing activities from discontinued operations (3,687 ) (4,246 ) (11,667 ) (2,666 )
Net cash provided by (used in) investing activities 231,313 (777,868 ) (11,667 ) 97,334

Cash flows from financing activities
Proceeds from notes payable - 390,000
Proceeds from convertible notes - 394,265
Payments on convertible notes - (40,000 )
Proceeds from sale of common stock - -
Proceeds from sale of preferred stock - 55,600
Repurchase of preferred C stock (100 ) -
Net cash provided by (used in) financing activities from continuing operations (100 ) 799,865
Net cash provided by (used in) financing activities from discontinued operations (30,023 ) (44,874 )
Net cash provided by (used in) financing activities (30,123 ) 754,991
Net cash used in financing activities from continuing operations - -
Net cash used in financing activities from discontinued operations (15,784 ) (14,904 )
Net cash used in financing activities (15,784 ) (14,904 )

Net increase (decrease) in cash 59,700 (213,163 ) 37,246 99,664
Cash – beginning 56,168 295,932 271,006 56,168
Cash – ending $ 115,868 $ 82,769 $ 308,252 $ 155,832

Supplemental disclosures:
Interest paid $ 151,927 $ 42,809 $ 40,018 $ 26,166
Income taxes paid - - $ - $ -

Non-cash investing and financing activities:
Common stock issued for settlement of stock payable $ 71,745 $ - $ - $ 71,745
Warrants issued for debt financing $ 93,938 $ - $ - $ 93,938
Common stock issued for settlement of accounts payable $ - $ 7,500
Conversion of Series A preferred into Series B preferred $ - $ 85,846
Deemed dividend on preferred exchange $ - $ 192,154
Receipt of assets on deposit $ - $ 6,076
Accounts payable and accrued interest added to note principal balance $ 30,965 $ -

See accompanying notes to unaudited consolidated financial statements.

6

DIGIPATH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)

Note 1 – Nature of Business and Significant Accounting Policies

Nature of Business

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.

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.~~2023. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at ~~March~~December 31, 2023:
Schedule of Entities Under Common Control and Ownership
Jurisdiction of
Name of Entity Incorporation Relationship
Digipath, ~~Inc.~~Inc.⁽¹⁾ Nevada Parent
Digipath Labs, ~~Inc.~~Inc . Nevada Subsidiary
Digipath Labs CA, Inc ⁽²⁾ California Subsidiary
Digipath Labs ~~S.A.S.~~S.A.S.⁽³⁾ Colombia Subsidiary
VSSL Enterprises, ~~Ltd.~~Ltd.⁽⁴⁾ Canada Subsidiary

⁽¹⁾ Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by Digipath, Inc., the parent company.
⁽²⁾ Formed during the second fiscal quarter of 2021, but has not yet commenced significant operations.
⁽³⁾ Formed during the first fiscal quarter of 2019, but has not yet commenced significant operations.
⁽⁴⁾ 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.

7

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.
~~Correction of an Error~~
Stock-based compensation were reported in the six months ended June 30, 2022 as $202,143 in error. The error was corrected in the annual 2022 10-K as a component of professional fees. In addition, the Company reported the exchange of Series A Preferred Stock for Series B Stock as an exchange with equal value in error. The effect of the error corrections on the prior periods has been determined to be immaterial, however, the Company has labeled the column headings for the prior periods as “revised.” For the six months ended March 31, 2022, the financial statements of the line items affected by the revision are as follows:
~~Schedule of Correction of an Error~~
~~Consolidated Statement of Operations~~
Line items for Q2-2022 effected by the restatement Previously Reported Correction of Error Effect of Discontinued operations Revised
Professional Fees $ 554,861 $ (12,722 ) $ (71,317 ) $ 470,822
Total operating expenses 1,029,172 (12,722 ) (463,493 ) 552,957
Operating loss (543,485 ) 12,722 (22,194 ) (552,957 )
Net Income (loss) (663,921 ) 12,722 (13,758 ) (664,957 )
Deemed Dividend - (192,154 ) - (192,154 )
Net Income (loss) to common shareholders (663,921 ) (179,432 ) - (843,353 )
~~Consolidated Statement of Cash Flows~~
Line items for Q2-2022 effected by the restatement Previously Reported Correction of Error Effect of Discontinued operations Revised
Net Loss $ (663,921 ) $ 12,722 $ (13,758 ) $ (664,957 )
Stock-based compensation 202,143 (12,722 ) - 189,421

Non-cash Investing and Financing Activities
Conversion of Series A preferred into Series B preferred 278,000 (192,154 ) - 85,846
Deemed dividend on preferred exchange 192,154 ) - 192,154
~~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:
- ~~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.

Our revenue is primarily generated through our subsidiary, Digipath Labs, Inc. (“Digipath Labs”), 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~~
For the ~~aging~~three months ended December 31, 2023 and 2022, all revenues are classified as part of ~~its receivables.~~Net income from discontinued operations in the accompanying consolidated statement of operations

Discontinued Operations

On April 20, 2023, the Company and Digipath Labs entered into an Asset Purchase Agreement (the “Purchase Agreement”) with DPL NV, LLC (“Buyer”), pursuant to which Digipath Labs has agreed to sell substantially all of its assets to Buyer for a cash purchase price of $2,300,000 (the “Purchase Price”). The business of an entity that is in the process of disposing its assets by sale, or that intends to cease operations, is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. As such, the Company’s lab testing business is now reported as discontinued operations.

Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of ~~March~~December 31, 2023 and September 30, ~~2022.~~2023. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations as net income from discontinued operations for the periods ended ~~March~~December 31, 2023 and 2022. The cash flows of the discontinued operations are reflected as cash flows of discontinued operations within the Company’s Consolidated Statements of Cash Flows for the periods ended ~~March~~December 31, 2023 and 2022.

Amounts presented in discontinued operations have been derived from our consolidated financial statements and accounting records using the historical basis of assets, liabilities, results of operations, and cash flows of Digipath Labs. The discontinued operations exclude general corporate allocations.

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, 2023 and 2022, potential dilutive securities of 83,125,488 shares issuable upon conversion of convertible notes payable, 8,120,000 and 6,020,000, respectively, shares issuable upon exercise of options, 15,387,050 shares issuable upon exercise of warrants, and 13,579,710 shares issuable upon conversion of our 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.
8

~~Stock-Based Compensation~~Reclassifications

~~The Company accounts for equity instruments issued~~Certain reclassifications have been made to ~~employees in accordance with~~ the ~~provisions~~prior period financial statements to conform to the current period presentation. These reclassifications had no effect on our previously reported results 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 goodsoperations 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.
~~Income Taxes~~
The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.
~~Uncertain Tax Positions~~
In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.
~~The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.~~accumulated deficit.

Recently Issued Accounting Pronouncements

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

Note 2 – Going Concern

As shown in the accompanying consolidated financial statements, As as of ~~March~~December 31, 2023, the Company had negative working capital of $~~2,993,815~~2,216,869 an, and accumulated recurring losses of $~~20,316,599~~19,610,351, and $~~115,868~~308,252 of cash on hand, which may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short-term operations. Management believes these factors will contribute toward achieving profitability.

The 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.
9

Note 3 – Fair Value of Financial Instruments

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

The Company has certain financial instruments that must be measured under the new fair value standard. The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of ~~March~~December 31, 2023 and September 30, ~~2022,~~2023, respectively:
Summary of Financial Instruments at Fair Value on Recurring Basis
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Fair Value Measurements at March 31, 2023 Fair Value Measurements at December 31, 2023
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Cash $ 115,868 $ - $ - $ 308,252 $ - $ -

Liabilities
Notes payable - 665,000 - - 595,965 -
Convertible notes payable, net of discounts of $81,752 - - 1,686,482
Convertible notes payable, net of discounts of $13,713 - - 1,754,522

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Fair Value Measurements at September 30, 2022 Fair Value Measurements at September 30, 2023
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Cash $ 56,168 $ - $ - $ 271,006 $ - $ -

Liabilities
Notes payable - 665,000 - - 565,000 -
Convertible notes payable, net of discounts of $84,767 - - 1,683,467
Convertible notes payable, net of discounts of $43,051 - - 1,725,184

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the ~~six~~three months ended ~~March~~December 31, 2023.
9
Note 4 – Related Party Transactions

During the ~~six~~three months ended ~~March~~December 31, 2023 the Company incurred ~~fees~~compensation expense of $~~30,000~~15,000 for services ~~from~~provided by its CFO. As of ~~March~~December 31, 2023, no amounts were owed to the CFO for services provided.
During the three months ended December 31, 2023 the Company accrued fees of $5,000 for services provided by its directors. As of December 31, 2023, the Company has accrued a total of $~~45,000~~15,000 in fees ~~related to past~~for services toprovided by its ~~CFO.~~directors.

~~During the six months ended March~~As of December 31, 2023, ~~the Company incurred fees of $42,000~~ ~~for services from its Board of directors. As of March 31, 2022~~ the Company has accrued a total of $~~168,000~~2,760 in ~~fees related to past services to the Board of Directors.~~
~~During the six months ended March 31, 2023, the Company granted~~ ~~3,400,000~~ ~~shares of its common stock~~reimbursable expenses owed to the officers and ~~1,000,000~~ ~~shares of its common stock to members of the board of directors as compensation for services performed with a fair value of $24,820~~ ~~and $7,300, respectively. As of March 31, 2023, the shares have not been issued and therefore has been recorded as a stock payable.~~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~~1,056,570. 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~~ had a maturity date of August 23, 2022. The Company had recorded total accrued interest of $64,017 as of September 30, 2022. As of September 30, 2022, the Company recorded a full allowance against the loans and related accrued interest.
10

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 liquidating.~~.

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 (“~~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. As of June 30, 2023 the Company received the full down payment of $275,000. In April 2023, the Invictus Note was amended and restated to extend the maturity date to March 31, 2024, with principal payments of $100,000 each due on September 30, 2023 and December 31, 2023, with the final payment of $425,000 due on March 31, 2024. Subsequent to December 31, 2023, the Company amended the Invictus Note for a second time to extend the maturity date to December 31, 2025, with principal payments of $50,000 each due on June 30, 2024, September 30, 2024 and December 31, 2024, $100,000 due on March 31, 2025 and June 30, 2025, $125,000 due on September 30, 2025 with the final payment of $216,780 due on December 31, 2025.
The Company ~~has~~ recorded a full allowance against the Invictus Note, as ~~collectability cannot be assured as~~ of the transaction date, ~~of this filing. As of March 31, 2023 the Company received $235,000~~as collectability was not reasonably assured at of the ~~initial $275,000, and the final $40,000~~ ~~was received in May 2023. The Company is working to amend the Invictus Note to reflect the delays of the initial closing conditions.~~transaction date.
10
Note 6 – ~~Fixed Assets~~
~~Fixed assets consist of the following at March 31, 2023 and September 30, 2022:~~
~~Schedule of Fixed Assets~~
2023 2022
As of
March 31, September 30,
2023 2022
Lab equipment      - 55,000
Fixed assets, gross - 55,000
Less: accumulated depreciation - -
Total $ - $ 55,000
~~During the six months ended March 31, 2023, 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~~ –Notes Payable

Notes payable consists of the following at ~~March~~December 31, 2023 and September 30, ~~2022,~~2023, respectively:

Schedule of Notes Payable
March 31, 2023 September 30, 2022

Notes payable $ - $ -
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. $ 665,000 $ 665,000

Total notes payable 665,000 665,000
Less: current maturities (665,000 ) (665,000 )
Notes payable $ - $ -
11
~~The Company recorded interest expense pursuant to the stated interest rate and closing costs on the notes payable in the amount of $29,770~~ ~~and $39,444~~ ~~during the six months ended March 31, 2023 and 2022.~~
~~Notes payable – discontinued operations~~
~~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.~~ ~~111,325~~ ~~141,348~~
December 31,
2023 September 30,
2023

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 years ended September 30, 2023 and 2022, the Company repaid $100,000 and $125,000, respectively of the principal balance on the Canna Lab Note. However, as a result of the Company not meeting the monthly payment obligations, the Canna Lab Note is in technical default, however, no default notice has been provided by Canna Lab 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. During the three months ended December 31, 2023, $35,965 of accrued interest and outstanding payables were transferred to the principal balance of the Canna Lab Note $ 595,965 $ 565,000

Total notes payable 595,965 565,000
Less: current maturities (595,965 ) (565,000 )
Notes payable $ - $ -

The Company recorded interest expense pursuant to the stated interest rate and closing costs on the notes payable in the amount of $18,026 and $12,000 during the three months ended December 31, 2023 and 2022.

Notes payable – discontinued operations

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. 79,548 80,428
Note 87 – Convertible Notes Payable

Related ~~Party Convertible~~ party convertible notes payable consist of the following at ~~March~~December 31, 2023 and September 30, ~~2022,~~2023, respectively:

Schedule of Related Party Convertible Notes Payable

March 31,
September 30, December 31, September 30,
2023 2022 2023 2023
Convertible notes payable $ - $ 310,272
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. $ 350,000 $ 350,000

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 matured 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. $ 350,000 $ 350,000

Total related party convertible notes payable 350,000 350,000 350,000 350,000
Less: unamortized debt discounts (25,238 ) (39,728 ) (3,423 ) (10,748 )
Total convertible debt 324,762 310,272 346,577 339,252
Less: current maturities (324,762 ) - (346,577 ) (339,252 )
Related party convertible notes payable $ - $ 310,272 $ - $ -

1211

Convertible notes payable consist of the following at ~~March~~December 31, 2023 and September 30, ~~2022,~~2023, respectively:

Schedule of Convertible Notes Payable
March 31, September 30,
2023 2022
Convertible notes payable $ - $ 174,726
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. $ 50,000 $ 50,000

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. 150,000 150,000

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, with a fair value of $32,166 which was recorded as a debt discount. 355,469 355,469

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, with a fair value of $31,671 which was recorded as a debt discount. 350,000 350,000
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. The principal and interest on the Note are convertible into common shares at a conversion price of $0.01. In connection with the note, the Company issued warrants to purchase 4,715,945 shares of common stock, with a fair value of $30,102 which was recorded as a debt discount. 362,765 362,765
December 31, September 30,
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. 150,000 150,000
2023 2023

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 matured on August 11, 2022, as amended, 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. $ 50,000 $ 50,000

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 matured on August 11, 2022, as amended, 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. 150,000 150,000

On September 23, 2019, the Company received proceeds of $200,000 on a senior secured convertible note that carries an 8% interest rate, which matured 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 $355,469, 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, with a fair value of $32,166, which was recorded as a debt discount. 355,469 355,469

On November 8, 2018, the Company received proceeds of $350,000 on a senior secured convertible note that carries an 8% interest rate, which matured 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, with a fair value of $31,671, which was recorded as a debt discount. 350,000 350,000

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. The principal and interest on the Note are convertible into common shares at a conversion price of $0.01. In connection with the note, the Company issued warrants to purchase 4,715,945 shares of common stock, with a fair value of $30,102, which was recorded as a debt discount. 362,765 362,765

On November 5, 2018, the Company received proceeds of $150,000 on a senior secured convertible note that carries an 8% interest rate, which matured 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. 150,000 150,000

Total convertible notes payable 1,418,234 1,418,234 1,418,234 1,418,234
Less: unamortized debt discounts (75,851 ) (45,039 ) (10,289 ) (32,302 )
Total convertible debt 1,342,383 1,373,195 1,407,945 1,385,932
Less: current maturities (1,342,383 ) (1,198,469 ) (1,407,945 ) (1,385,932 )
Convertible notes payable $ - $ 174,726 $ - $ -

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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 $93,938 during the ~~six months~~year ended ~~March 31, 2023.~~September 30, 2023. 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 $~~77,616~~29,338 and $~~39,103~~48,916, during the ~~six~~three months ended ~~March~~December 31, 2023 and 2022, respectively. Unamortized discount as of ~~March~~December 31, 2023 is $~~101,089~~13,712.

All of the convertible notes (except the related party convertible note) 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 $~~72,473~~37,527 and $~~58,128~~36,236 for the ~~six~~three months ended ~~March~~December 31, 2023 and 2022, respectively.

The Company recognized interest expense for the ~~six~~three months ended ~~March~~December 31, 2023 and 2022, respectively, as follows:

Schedule of Interest Expense
March 31, March 31, December 31, December 31,
2023 2022 2023 2022

Interest on notes payable 29,770 39,444 18,026 12,000
Amortization of beneficial conversion features 77,616 39,103 29,338 48,916
Interest on convertible notes 72,473 58,128 36,949 36,236
Total interest expense $ 179,859 $ 136,675 $ 84,313 $ 97,152
Note 98 – 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 ~~March~~December 31, 2023, there were 1,047,942 shares of Series A Preferred issued and outstanding, 333,600 shares of Series B Preferred issued and outstanding and no shares of Series C Preferred issued and outstanding. The Board of Directors is authorized to determine ~~any~~ the 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 ~~March~~December 31, 2023 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.~~notice.

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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 , voting separately as a class, 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~~ various 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 March 31, 2023 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.~~
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~~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 shares of Series C Preferred were designated on July 20, ~~2022.~~2022 and each share has a Stated Value of $1. The principal feature of the Series C Preferred Stock is that it provides ~~the~~ each 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.~~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. As of ~~March~~December 31, 2023, there we no shares of Series C Preferred ~~outstanding.~~outstanding .

Additional terms of the Series C Preferred ~~and~~ include the following:

● The shares of Series C Preferred are not entitled to dividends.

● 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 C Preferred are entitled to receive, prior to any distribution to the holders of common stock, 100% of the stated value per share of Series C Preferred.

● The shares of Series C Preferred ~~are not entitled to~~ have no conversion rights.

On March 2, 2023, the Company entered into a Preferred Stock Repurchase Agreement with Todd Denkin, the Company’s president, pursuant to which Mr. Denkin surrendered his Series C Preferred back to the Company for the purchase price of $~~100~~.
14

Common Stock

~~Common~~The Company has250,000,000 shares of common stock, ~~consists of~~par value $0.001 ~~par value,~~ ~~250,000,000~~ ~~shares~~per share, authorized of which ~~82,296,820~~87,096,820 shares were issued and outstanding as of ~~March~~December 31, 2023.

~~During~~Note 9 – Mezzanine Equity
Series B
The shares of 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 ~~six months ended March 31, 2023,~~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 ~~issued~~below the conversion price, subject to customary exceptions. At the current conversion price, the ~~7,150,000~~333,600 shares of ~~its common stock in settlement~~Series B Preferred outstanding at December 31, 2023 are convertible into 8,340,000 shares of the common stock ~~payable in~~of the ~~amount~~Company. No holder is permitted to convert its shares of $~~71,745~~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.

~~During~~Additional terms of the ~~six months ended March 31, 2023,~~Series B Preferred include the ~~Company granted~~ following:
~~3,400,000~~
● The shares of Series B Preferred are not entitled to dividends, provided that if dividends are paid on the shares of ~~its~~ common stock of the Company, the Series B Preferred will be entitled to dividends based on the number of shares of common stock into 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 and Series A Preferred, 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 shares of Series B Preferred may then be converted.
Due to the ~~officers and~~ ~~1,000,000~~ ~~shares of its common stock to members~~change in control provision of the ~~board of directors~~Series B Preferred, the Series B Preferred is classified as ~~compensation for services performed with a fair value of $24,820~~ ~~and $7,300, respectively. As of March 31, 2023,~~temporary equity on the ~~shares have not been issued and as therefore has been recorded as a stock payable.~~balance sheet.
Note 10 – 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.

~~During the six months ended March 31, 2023, the Company issued to certain employees, options to purchase~~ ~~2,100,000~~ ~~shares of its common stock in exchange for services rendered to the Company with a total fair value $10,446. The Company estimated the fair value using the Black-Scholes Pricing Model, based on a volatility rate of~~ ~~184% and call option values of $0.00497~~ ~~and exercise prices of $0.0056. The options have a term of~~ ~~5.75~~ ~~years and vest nine months after the grant date.~~
16
15

Amortization of Stock-Based Compensation

A total of $~~17,510~~1,153 and $~~136,921~~8,306 of stock-based compensation expense was recognized during the ~~six~~three months ended ~~March~~December 31, 2023 and 2022, respectively, as a result of the vesting of common stock options ~~issued.~~issued in prior periods. As of ~~March~~December 31, 2023 ~~a total of $8,125~~no additional amounts of unamortized expense remains to be amortized over the vesting period.

The following is a summary of information about the stock options outstanding at ~~March~~December 31, 2023.
Summary of Common Stock Options Outstanding
Shares Underlying
Shares Underlying Options Outstanding 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

$ 0.0056 – $0.13 8,120,000 5.53 years $ 0.052 5,912,857 $ 0.069
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants during the six months ended March 31, 2023:
~~Schedule of Weighted-Average Assumptions Used for Grants~~
~~March 31,~~
~~2023~~
~~Average risk-free interest rates~~ ~~3.88~~ %
~~Average expected life (in years)~~ ~~2.90~~
~~Volatility~~ ~~184~~ %
The Black-Scholes option pricing model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s common stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its common stock options. During the six months ended March 31, 2023, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.
~~The weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during the six months ended March 31, 2023, was approximately $0.005~~ ~~per option.~~
Shares Underlying Options Outstanding Shares Underlying 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
$ 0.0056– $0.13 8,120,000 4.78 years $ 0.052 8,120,000 $ 0.052

The following is a summary of activity of outstanding common stock options:
Schedule of Activity of Outstanding Common Stock Options
Weighted
Average
Number Exercise
of Shares Price
Balance, September 30, 2022 6,020,000 $ 0.069
Options issued 2,100,000 0.006
Options forfeited - -

Balance, March 31, 2023 8,120,000 $ 0.052

Exercisable, March 31, 2023 5,912,857 $ 0.069
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Weighted
Average
Number Exercise
of Shares Price
Balance, September 30, 2023 8,120,000 $ 0.052
Options issued - -
Options forfeited - -

Balance, December 31, 2023 8,120,000 $ 0.052

Exercisable, December 31, 2023 8,120,000 $ 0.052

As of ~~March~~December 31, 2023, these options in the aggregate had $~~4,830~~ ~~and $~~088,740 of intrinsic value for the outstanding and exercisable options, ~~respectively,~~ based on the per share market price of $~~0.008~~0.04 of the Company’s common stock as of such date.

Note 11 – Common Stock Warrants

Warrants to purchase a total of 15,387,050 shares of common stock were outstanding as of ~~March~~December 31, 2023.

The following is a summary of information about our warrants to purchase common stock outstanding at ~~March~~December 31, 2023 (including those issued to both investors and service providers).
Summary of Common Stock Warrants Outstanding
Shares Underlying
Shares Underlying Warrants Outstanding 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

$ 0.0074 -0.10 15,387,050 8.21 years $ 0.016 15,387,050 $ 0.016
Shares Underlying
Shares Underlying Warrants Outstanding 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

$ 0.0074-0.10 15,387,050 9.26 years $ 0.02 15,387,050 $ 0.02
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The following is a summary of activity of outstanding common stock warrants:
Schedule of Outstanding Common Stock Warrants Activity
Weighted
Average
Number Exercise
of Shares Price
Balance, September 30, 2022 1,500,000 $ 0.10
Warrants granted 13,887,050 $ 0.007
Warrants expired - -

Balance, March 31, 2023 15,387,050 $ 0.016

Exercisable, March 31, 2023 15,387,050 $ 0.016
Weighted
Average
Number Exercise
of Shares Price
Balance, September 30, 2023 15,387,050 $ 0.016
Warrants granted - -
Warrants expired - -

Balance, December 31, 2023 15,387,050 $ 0.016

Exercisable, December 31, 2023 15,387,050 $ 0.016

As of ~~March~~December 31, 2023, these warrants in the aggregate had $~~6,944~~630,198 of intrinsic value as the per share market price of $~~0.008~~0.04 of the Company’s common stock as of such date was greater than the exercise price of certain warrants.

Note 12 – Discontinued Operations
On April 20, 2023, the Companyand Digipath Labs entered into the Purchase Agreement with DPL NV, LLC (“Buyer”), pursuant to which Digipath Labs has agreed to sell substantially all of its assets to Buyer for a cash purchase price of $2,300,000 (the “Purchase Price”) as described in Note 1 above. The Purchase Price is subject to adjustments at closing based on, among other things, the amount by which the working capital of Digipath Labs at the closing is greater or less than $150,000.

The Purchase Agreement includes a number of representations, warrantees, covenants and conditions to closing customary for this type of transaction. In addition, the closing of the transaction is subject to the approval of the Nevada Cannabis Compliance Board (the “CCB”). InSubsequent to December 31, 2023, the ~~event CCB~~Company received approval ~~is not obtained by June 30, 2024, or any other condition to closing has not been satisfied by such date, either party may terminate~~from the ~~Purchase Agreement.~~CCB. See Note 14.
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Pursuant to the Purchase Agreement, the Buyer deposited $230,000 into an escrow account upon the execution of the Purchase Agreement, and such amount will continue to be held in escrow for a 12-month period following closing to satisfy any indemnification claims Buyer may have against Digipath Labs.

In connection with the transactions contemplated by the Purchase Agreement, Digipath, Digipath Labs and Buyer entered into a Management Services Agreement (the “Management Services Agreement”), dated as of April 30, 2023, pursuant to which Buyer was engaged to manage the operation of Digipath Labs’ cannabis testing laboratory (the “Lab”). The effectiveness of the Management Services Agreement was subject to the approval of the CCB, which was obtained on October 17, 2023. Pursuant to the Management Services Agreement, after the payment of expenses to third parties and a payment of 15% of cash collections to Digipath (but not less than $15,000) in each month, Buyer was entitled to a management fee of $10,000 per month. Any remaining cash generated from the operation of the Lab in any month was payable 45% to the Buyer and 55% to the Company.
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The balance sheets of Digipath Labs are summarized below:
Schedule of Discontinued Operations Income Statement Balance Sheet and Additional Disclosures

March 31, 2023
September 30, 2022 December 31, 2023 September 30, 2023
Current assets:
Accounts receivable, net $ 315,625 $ 335,085 $ 509,535 $ 447,410
Deposits 18,675 25,141 18,675 18,675
Other current assets 24,361 32,971 27,813 20,137
Total current assets 358,661 393,197 556,023 486,222

Right-of-use asset 266,418 316,961 274,985 274,985
Fixed assets, net 360,630 405,823 373,513 368,681
Total long term assets 627,048 722,784 648,498 643,666
Total Assets $ 985,709 $ 1,115,981 $ 1,204,521 $ 1,129,888

Current liabilities:
Accounts payable $ 337,758 $ 334,909 $ 132,669 $ 158,869
Accrued expenses 34,964 32,571 60,358 61,512
Current portion of operating lease liabilities 121,748 100,685 66,772 83,757
Current maturities of notes payable 62,693 60,920 48,733 64,517
Total current liabilities 557,163 529,085 308,532 368,655

Operating lease liabilities 158,233 229,825 134,425 143,245
Notes payable 48,632 80,428 15,911 15,911
Total long term liabilities 206,865 310,253 150,336 159,156
Total Liabilities $ 764,028 $ 839,338 $ 458,868 $ 527,811
The statements of operations of Digipath Labs combined are summarized below:
2023 2022 2023 2022 2023 2022
For the Three Months Ended For the Six Months Ended For the Three Months Ended
March 31, March 31 December 31,
2023 2022 2023 2022 2023 2022

Revenues $ 760,710 $ 604,735 $ 1,487,465 $ 1,304,320 $ 923,154 $ 726,755
Cost of sales 459,608 396,032 882,443 818,633 421,511 422,835
Gross profit 301,102 208,703 605,022 485,687 501,643 303,920

Operating expenses:
General and administrative 224,346 193,007 504,990 392,176 203,185 280,644
Professional fees 20,688 26,413 43,460 71,317 4,750 2,157
Total operating expenses 245,034 219,420 548,450 463,493 207,935 282,801

Operating income(loss) 56,068 (10,717 ) 56,572 22,194
Operating income 293,708 21,119

Other income (expense):
Interest expense (1,745 ) (4,904 ) (3,706 ) (8,436 ) (1,081 ) (1,961 )
Total other income (expense) (1,745 ) (4,904 ) (3,706 ) (8,436 ) (1,081 ) (1,961 )

Net income (loss) $ 54,323 $ (15,621 ) $ 52,866 $ 13,758
Net income $ 292,627 $ 19,158
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 ~~April 20, 2023,~~ January 3, 2024, the Company amended the Invictus Note for a second time to extend the maturity date to December 31, 2025, with principal payments of $50,000 each due on June 30, 2024, September 30, 2024 and ~~Digipath Labs entered into~~December 31, 2024, $100,000 due on March 31, 2025 and June 30, 2025, $125,000 due on September 30, 2025 with the ~~Purchase Agreement with DPL NV, LLC as described in Notes 1 and 12 above.~~final payment of $216,780 due on December 31, 2025.

~~In connection with~~On January 18, 2024, the ~~transactions contemplated~~Company received approval from the CCB to transfer the assets pursuant to the Purchase Agreement. The Company expects the transaction to close by the ~~Purchase Agreement, Digipath, Digipath Labs and Buyer entered into a Management Services Agreement (the “Management Services Agreement”), dated as~~end of ~~April 30, 2023, pursuant to which Buyer has been engaged to manage the operation of Digipath Labs’ cannabis testing laboratory (the “Lab”).~~ February 2024.
The effectiveness of the Management Services Agreement is subject to the approval of the CCB, which has not yet been obtained. Pursuant to the Management Services Agreement, after the payment of expenses to third parties and a payment of 15% of cash collections to Digipath (but not less than $15,000) in each month, Buyer will be entitled to a management fee of $
~~10,000~~ ~~per month. Any remaining cash generated from the operation of the Lab in any month will be payable~~ 45~~% to the Buyer and~~ 55~~% to the Company.~~

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18

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~~2023 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~~2023 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.~~2015.

Results of Operations for the Three Months Ended ~~March~~December 31, 2023 and 2022:

The following table summarizes selected items from the statement of operations for the three months ended ~~March~~December 31, 2023 and 2022.

Three Months Ended March 31, Increase / Three Months Ended December 31, Increase /
2023 2022 (Decrease) 2023 2022 (Decrease)
Revenues $ - $ - $ - $ - $ - $ -
Cost of sales - - - - - -
Gross profit - - - - - -

Operating expenses:
General and administrative 45,674 42,479 3,195 14,743 39,524 (24,781 )
Professional fees 128,440 259,977 (131,537 ) 55,821 67,812 (11,991 )
Total operating expenses: 174,114 302,456 (128,342 ) 70,564 107,336 (36,772 )

Operating loss (174,114 ) (302,456 ) 128,342 (70,564 ) (107,336 ) 36,772

Total other income (expense) 52,293 (55,519 ) 107,812 (70,417 ) (152,152 ) 81,735

Net loss from continuing operations (121,821 ) (357,975 ) 236,154 (140,981 ) (259,488 ) 118,507
Net income (loss) from discontinued operations 54,323 (15,621 ) 69,944
Net loss $ (67,498 ) $ (373,596 ) $ 306,098
Net income from discontinued operations 292,627 19,158 273,469
Net income (loss) $ 151,646 $ (240,330 ) $ 391,976
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General and Administrative Expenses

General and administrative expenses for the three months ended ~~March~~December 31, 2023 were ~~$45,674,~~$14,743, compared to ~~$42,479~~$39,524 during the three months ended ~~March~~December 31, 2022, ~~an increase~~a decrease of ~~$3,195,~~$24,781, or 8%63%. The expenses consisted primarily of salaries and wages and included ~~$30,991~~$1,153 and $6,171 of non-cash stock-based compensation, respectively. General and administrative expenses decreased primarily due to decreased corporate overhead activities.

Professional Fees

Professional fees for the three months ended ~~March~~December 31, 2023 were ~~$128,440,~~$55,821, compared to ~~$259,977~~$67,812 during the three months ended ~~March~~December 31, 2022, a decrease of ~~$131,537,~~$11,991, or ~~51%~~18%. Professional fees included non-cash, stock-based compensation of ~~$10,333~~$0 and ~~$103,464~~$2,135 during the three months ended ~~March~~December 31, 2023 and 2022, respectively. Professional fees decreased primarily due to decreased ~~corporate~~ consulting ~~services during the current period as we decreased our focus on expansion efforts.~~and accounting fees.

Operating Loss

Our operating loss for the three months ended ~~March~~December 31, 2023 was ~~$174,114,~~$70,564, compared to an operating loss of ~~$302,456~~$107,336 during the three months ended ~~March~~December 31, 2022, a decrease of ~~$128,342,~~$36,772, or ~~42%~~34%. Our operating loss decreased primarily due to our decreased ~~professional fees.~~general and administrative expenses.
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Other Income (Expense)
Other income, on a net basis, for the three months ended March 31, 2023 was $52,293, compared to other expense, on a net basis, of $55,519 during the three months ended March 31, 2022, a net increase of $107,812. Other income consisted of interest expense of $82,707 and recovery of previously written off receivables of $135,000 for the three months ended March 31, 2023.
~~Results of Operations for the Six Months Ended March 31, 2023 and 2022:~~
~~The following table summarizes selected items from the statement of operations for the six months ended March 31, 2023 and 2022.~~
Six Months Ended March 31, Increase /
2023 2022 revised (Decrease)
Revenues $ - $ - $ -
Cost of sales - - -
Gross profit - - -

Operating expenses:
General and administrative 85,198 82,135 3,063
Professional fees 175,637 470,822 (295,185 )
Total operating expenses: 260,835 552,957 (292,122 )

Operating loss (260,835 ) (552,957 ) 292,122

Total other income (expense) (99,859 ) (112,000 ) 12,141

Net loss from continuing operations $ (360,694 ) $ (664,957 ) $ 304,263
Net income (loss) from discontinued operations 52,866 13,758 39,108
Net loss (307,828 ) (651,199 ) 343,371
~~General and Administrative Expenses~~
General and administrative expenses for the six months ended March 31, 2023 were $85,198, compared to $82,135 during the six months ended March 31, 2022, a increase of $3,063, or 4%. The expenses consisted primarily of salaries and wages and included $37,162 and $64,842 of non-cash stock-based compensation, respectively. General and administrative expenses decreased due primarily to decreased corporate overhead activities.
~~Professional Fees~~
Professional fees for the six months ended March 31, 2023 were $175,637, compared to $470,822 during the six months ended March 31, 2022, a decrease of $295,185, or 63%. Professional fees included non-cash, stock-based compensation of $12,468 and $124,579 during the six months ended March 31, 2023 and March 31, 2022, respectively. Professional fees decreased primarily due to decreased corporate consulting services during the current period as we decreased our focus on expansion efforts.
~~Operating Loss~~
Our operating loss for the six months ended March 31, 2023 was $260,835, compared to $552,957 during the six months ended March 31, 2022, a decrease of $292,122, or 53%. Our operating loss decreased primarily due a decrease in professional fees.
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~~Other Expense~~

Other expense, on a net basis, for the ~~six~~three months ended ~~March~~December 31, 2023 was ~~$99,859,~~$70,417, compared to other expense, on a net basis, of ~~$112,000~~$152,152 during the ~~six~~three months ended ~~March~~December 31, 2022, a net decrease of ~~$12,141.~~$81,735. Other expense consisted of interest expense of ~~$179,859~~$84,313 and an ~~impairment on equipment of $55,000, offset by the recovery of previously written off receivables of $135,000~~insurance claim received for the ~~six~~three months ended ~~March~~December 31, 2023.

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~~three months ended ~~March~~December 31, 2023 and 2022:

2023 2022 2023 2022
Operating Activities $ (141,490 ) $ (190,286 ) $ 64,697 $ 17,234
Investing Activities 231,313 (777,868 ) (11,667 ) 97,334
Financing Activities (30,123 ) 754,991 (15,784 ) (14,904 )
Net increase (Decrease) in Cash $ 59,700 $ (213,163 )
Net increase in Cash $ 37,246 $ 99,664

Net Cash ~~Used in~~Provided by Operating Activities

During the ~~six~~three months ended ~~March~~December 31, 2023, net cash ~~used in~~provided by operating activities was ~~$141,490,~~$64,697, compared to net cash ~~used in~~provided by operating activities of ~~$190,286~~$17,234 for the same period ended ~~March~~December 31, 2022, including cash provided by operating activities from discontinued operations of ~~$141,538~~$176,503 for the ~~six~~three months ended ~~March~~December 31, 2023 compared to cash provided by operating activities from discontinued operations of ~~$113,844~~$149,017 for the ~~six~~three months ended ~~March~~December 31, 2022. The ~~decrease~~increase in cash ~~used in~~provided by operating activities was primarily attributable to our ~~decrease~~increase in ~~net loss and accounts receivable, along with increases in accounts payable and accrued expenses.~~cash provided by discontinued operations.

Net Cash Provided by (Used in) Investing Activities

During the ~~six~~three months ended ~~March~~December 31, 2023, net cash ~~provided by~~used in investing activities was ~~$231,313,~~$11,667, compared to ~~$777,868 used in~~$97,334 provided by investing activities for the same period ended ~~March~~December 31, 2022, including cash used in investing activities from discontinued operations of ~~$3,687~~$11,667 for the ~~six~~three months ended ~~March~~December 31, 2023 compared to cash used in investing activities from discontinued operations of ~~$4,246~~$2,666 for the ~~six~~three months ended ~~March~~December 31, 2022. The cash provided by investing activities in the ~~current~~previous 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.~~receivable.
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Net Cash ~~Provided by (Used in)~~Used in Financing Activities

During the ~~six~~three months ended ~~March~~December 31, 2023, net cash used in financing activities was ~~$30,123,~~$15,784, compared to net cash ~~provided by~~used in financing activities of ~~$754,991~~$14,904 for the same period ended ~~March~~December 31, 2022, including cash used in financing activities from discontinued operations of ~~$30,023~~$15,784 for the ~~six~~three months ended ~~March~~December 31, 2023 compared to cash used in financing activities from discontinued operations of ~~$44,874~~$14,904 for the ~~six~~three months ended ~~March~~December 31, 2022. The current period consisted of $30,023 of principal payments on an equipment loan, compared to $390,000 of proceeds received on debt financing, proceeds of $394,265 received on convertible debt financing proceeds of $55,600 from the sale of preferred stock, as offset by $16,557 of principal payments on an equipment lease and $28,317 of principal payments on an equipment loan and $40,000 of principal payments made on convertible notes in the comparative period in the prior year.
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Ability to Continue as a Going Concern

As of ~~March~~December 31, 2023, our balance of cash on hand was ~~$115,868,~~$308,252, and we had negative working capital of ~~$2,993,815~~$2,216,869 and an accumulated deficit of ~~$20,316,599~~$19,610,351 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~~Until the agreement to sell the assets of the lab testing business, management was actively pursuing new customers to increase revenues. In addition, the Company ~~is currently~~was 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.~~The Company is currently evaluating future investments into potential acquisition targets. 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.

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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.
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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.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~March~~December 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~March~~December 31, 2023, 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.

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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.

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

~~There were no issuances of equity securities by the Company during the three-month period ended March 31, 2023:~~None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

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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 Current Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on March 16, 2020)
3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 10 filed with the Securities and Exchange Commission by Digipath, Inc. on July 15, 2011)
3.2 Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10 filed with the Securities and Exchange Commission by Digipath, Inc. on July 15, 2011)
3.3 Certificate of Amendment to Articles of Incorporation dated April 4, 2014 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on April 10, 2014)
3.4 Certificate of Designations, Preferences, Limitations, Restrictions and Relative Rights of Series A Convertible Preferred Stock dated April 9, 2014 (incorporated by reference to Exhibit 3.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on April 10, 2014)
3.5 Certificate of Amendment to Articles of Incorporation dated May 22, 2015 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 26, 2015)
3.6 Certificate of Amendment to Articles of Incorporation dated May 14, 2019 (incorporated by reference to Exhibit 3.6 of the ~~Current~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 13, 2019)
3.7 Certificate of ~~Designations~~Designation of the Series B Preferred Stock ~~dated~~of Digipath, Inc., filed 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.~~Inc on January 6, 2022)
3.8 Certificate of Designation of the Series C Preferred Stock of Digipath, Inc., filed with the Secretary of State of the State of Nevada on July 20, 2022. (incorporated by reference to Exhibit 3.1 of the Report on 8-K filed with the Securities and Exchange Commission by Digipath, Inc on July 26, 2022)
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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)
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)
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~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
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~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
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~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on May 15, 2020)
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)
4.7* Description of Securities
10.1 2012 Stock Incentive Plan (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 March 9, 2012)
10.2 Digipath, Inc. Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)
10.3 Form of Stock Option Grant Notice for grants under the Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)
10.4 Asset Purchase Agreement between Digipath, Inc., Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023 (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 May 2, 2023)
10.5 Management Services Agreement between Digipath, Inc., Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023(incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 2, 2023)
10.6 Amended and Restated Secured Promissory Noted in the principal amount of $625,000, dated April 11, 2023, made by Invictus Wealth Group, LLC in favor of Digipath, Inc. (incorporated by reference to Exhibit 10.2 of the Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 18, 2023
10.7* Second Amended and Restated Secured Promissory Noted in the principal amount of $625,000, dated January 3, 2024, made by Invictus Wealth Group, LLC in favor of Digipath, Inc.
31.1* Section 302 Certification of Principal Executive Officer
31.2* Section 302 Certification of Principal Financial Officer
32.1* Section 906 Certification of Principal Executive Officer
32.2* Section 906 Certification of Principal Financial Officer
101.INS* Inline XBRL Instance Document
101.SCH* Inline XBRL Schema Document
101.CAL* Inline XBRL Calculation Linkbase Document
101.DEF* Inline XBRL Definition Linkbase Document
101.LAB* Inline XBRL Labels Linkbase Document
101.PRE* Inline XBRL Presentation Linkbase Document
104 Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

* Filed herewith.

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SIGNATURES

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

Date: ~~May 26, 2023~~February 14, 2024

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

27 25

																			��
	Series B Convertible Preferred Stock				Series A Convertible Preferred Stock				Series C Preferred Stock						Common Stock				Stock			Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Shares		Amount		Payable			Capital			Deficit			Deficit

Balance, September 30, 2022		333,600	$	333,600		1,047,942	$	1,048		1,000		$	1			75,146,820	$	75,147	$	71,745		$	17,117,958		$	(20,008,771	)	$	(2,742,872	)

Issuance of common shares to settle stock payable		-		-		-		-		-			-			7,150,000		7,150		(71,745	)		64,595			-			-

Warrants issued as debt financing costs		-		-		-		-		-			-			-		-		-			93,938			-			93,938

Stock-based compensation		-		-		-		-		-			-			-		-		-			8,306			-			8,306

Net loss		-		-		-		-		-			-			-		-		-			-			(240,330	)		(240,330	)

Balance, December 31, 2022		333,600		333,600		1,047,942		1,048		1,000			1			82,296,820		82,297		-			17,284,797			(20,249,101	)		(2,880,958	)

Repurchased of preferred C stock		-		-		-		-		(1,000	)		(1	)		0		0		0			(99	)		-			(100	)

Common shares to be issued for compensation		-		-		-		-		-			-			-		-		32,120			-			-			32,120

Stock-based compensation		-		-		-		-		-			-			-		-		-			9,204			-			9,204

Net loss		-		-		-		-		-			-			-		-		-			-			(67,498	)		(67,498	)

Balance, March 31, 2023		333,600	$	333,600		1,047,942	$	1,048		-		$	-			82,296,820	$	82,297	$	32,120		$	17,293,902		$	(20,316,599	)	$	(2,907,232	)

	Series B Convertible Preferred Stock				Series A Convertible Preferred Stock						Series C Preferred Stock				Common Stock				Stock		Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Shares		Amount		Payable		Capital Revised			Deficit Revised			Deficit

Balance, September 30, 2021		-		-		1,325,942			1,326			-		-		71,230,153		71,230		-		16,825,765			(17,951,653	)		(1,053,332	)

Series B Preferred shares sold for cash		55,600		55,600		-			-			-		-		-		-		-		-			-			-

Conversion of Series A Preferred Shares into Series B Preferred		278,000		278,000		(278,000	)		(278	)		-		-		-		-		-		(85,568	)		-			(85,846	)

Common stock issued for services		-		-		-			-			-		-		1,500,000		1,500		-		51,000			-			52,500

Stock-based compensation		-		-		-			-			-		-		-		-		-		33,457			-			33,457

Deemed dividend on preferred exchange		-		-		-			-			-		-		-		-		-		(192,154	)		-			(192,154	)

Net loss		-		-		-			-			-		-		-		-		-		-			(277,603	)		(277,603	)

Balance, December 31, 2021		333,600	$	333,600		1,047,942		$	1,048			-	$	-		72,730,153	$	72,730	$	-	$	16,632,500		$	(18,229,256	)	$	(1,522,978	)
Balance		333,600	$	333,600		1,047,942		$	1,048			-	$	-		72,730,153	$	72,730	$	-	$	16,632,500		$	(18,229,256	)	$	(1,522,978	)

Common Shares issued for settlement of accounts payable		-		-		-			-			-		-		250,000		250		-		7,250			-			7,500

Stock-based compensation		-		-		-			-			-		-		2,166,667		2,167		-		101,297			-			103,464

Net loss		-		-		-			-			-		-		-		-		-		-			(373,596	)		(373,596	)

Balance, March 31, 2022		333,600	$	333,600		1,047,942		$	1,048			-	$	-		75,146,820	$	75,147	$	-	$	16,741,047		$	(18,602,852	)	$	(1,785,610	)
Balance		333,600	$	333,600		1,047,942		$	1,048			-	$	-		75,146,820	$	75,147	$	-	$	16,741,047		$	(18,602,852	)	$	(1,785,610	)

		Jurisdiction of
Name of Entity		Incorporation	Relationship
Digipath, ~~Inc.~~Inc.⁽¹⁾		Nevada	Parent
Digipath Labs, ~~Inc.~~Inc	.	Nevada	Subsidiary
Digipath Labs CA, Inc ⁽²⁾		California	Subsidiary
Digipath Labs ~~S.A.S.~~S.A.S.⁽³⁾		Colombia	Subsidiary
VSSL Enterprises, ~~Ltd.~~Ltd.⁽⁴⁾		Canada	Subsidiary

⁽¹⁾	Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by Digipath, Inc., the parent company.
⁽²⁾	Formed during the second fiscal quarter of 2021, but has not yet commenced significant operations.
⁽³⁾	Formed during the first fiscal quarter of 2019, but has not yet commenced significant operations.
⁽⁴⁾	Acquired on March 11, 2020.

Line items for Q2-2022 effected by the restatement	Previously Reported			Correction of Error			Effect of Discontinued operations			Revised
Professional Fees	$	554,861		$	(12,722	)	$	(71,317	)	$	470,822
Total operating expenses		1,029,172			(12,722	)		(463,493	)		552,957
Operating loss		(543,485	)		12,722			(22,194	)		(552,957	)
Net Income (loss)		(663,921	)		12,722			(13,758	)		(664,957	)
Deemed Dividend		-			(192,154	)		-			(192,154	)
Net Income (loss) to common shareholders		(663,921	)		(179,432	)		-			(843,353	)

	-	~~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.~~

	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	Fair Value Measurements at March 31, 2023						Fair Value Measurements at December 31, 2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash	$	115,868	$	-	$	-	$	308,252	$	-	$	-

Liabilities
Notes payable		-		665,000		-		-		595,965		-
Convertible notes payable, net of discounts of $81,752		-		-		1,686,482
Convertible notes payable, net of discounts of $13,713								-		-		1,754,522

	2023		2022
	As of
	March 31,		September 30,
	2023		2022
Lab equipment		-		55,000
Fixed assets, gross		-		55,000
Less: accumulated depreciation		-		-
Total	$	-	$	55,000

	December 31, 2023			September 30, 2023

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 years ended September 30, 2023 and 2022, the Company repaid $100,000 and $125,000, respectively of the principal balance on the Canna Lab Note. However, as a result of the Company not meeting the monthly payment obligations, the Canna Lab Note is in technical default, however, no default notice has been provided by Canna Lab 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. During the three months ended December 31, 2023, $35,965 of accrued interest and outstanding payables were transferred to the principal balance of the Canna Lab Note	$	595,965		$	565,000

Total notes payable		595,965			565,000
Less: current maturities		(595,965	)		(565,000	)
Notes payable	$	-		$	-

The Company recorded interest expense pursuant to the stated interest rate and closing costs on the notes payable in the amount of $18,026 and $12,000 during the three months ended December 31, 2023 and 2022.

Notes payable – discontinued operations

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.		79,548			80,428

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. The principal and interest on the Note are convertible into common shares at a conversion price of $0.01. In connection with the note, the Company issued warrants to purchase 4,715,945 shares of common stock, with a fair value of $30,102 which was recorded as a debt discount.		362,765			362,765
							December 31,			September 30,
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.		150,000			150,000
							2023			2023

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 matured on August 11, 2022, as amended, 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.							$	50,000		$	50,000

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 matured on August 11, 2022, as amended, 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.								150,000			150,000

On September 23, 2019, the Company received proceeds of $200,000 on a senior secured convertible note that carries an 8% interest rate, which matured 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 $355,469, 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, with a fair value of $32,166, which was recorded as a debt discount.								355,469			355,469

On November 8, 2018, the Company received proceeds of $350,000 on a senior secured convertible note that carries an 8% interest rate, which matured 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, with a fair value of $31,671, which was recorded as a debt discount.								350,000			350,000

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. The principal and interest on the Note are convertible into common shares at a conversion price of $0.01. In connection with the note, the Company issued warrants to purchase 4,715,945 shares of common stock, with a fair value of $30,102, which was recorded as a debt discount.								362,765			362,765

On November 5, 2018, the Company received proceeds of $150,000 on a senior secured convertible note that carries an 8% interest rate, which matured 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.								150,000			150,000

Total convertible notes payable		1,418,234			1,418,234			1,418,234			1,418,234
Less: unamortized debt discounts		(75,851	)		(45,039	)		(10,289	)		(32,302	)
Total convertible debt		1,342,383			1,373,195			1,407,945			1,385,932
Less: current maturities		(1,342,383	)		(1,198,469	)		(1,407,945	)		(1,385,932	)
Convertible notes payable	$	-		$	174,726		$	-		$	-

●	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 , voting separately as a class, 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~~ various 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.

●	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.~~

●	The shares of Series C Preferred are not entitled to dividends.

●	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 C Preferred are entitled to receive, prior to any distribution to the holders of common stock, 100% of the stated value per share of Series C Preferred.

●	The shares of Series C Preferred ~~are not entitled to~~ have no conversion rights.

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

	~~March 31,~~
	~~2023~~

~~Average risk-free interest rates~~		~~3.88~~	%
~~Average expected life (in years)~~		~~2.90~~
~~Volatility~~		~~184~~	%

			Weighted
			Average
	Number		Exercise
	of Shares		Price
Balance, September 30, 2022		6,020,000	$	0.069
Options issued		2,100,000		0.006
Options forfeited		-		-

Balance, March 31, 2023		8,120,000	$	0.052

Exercisable, March 31, 2023		5,912,857	$	0.069

	Three Months Ended March 31,						Increase /			Three Months Ended December 31,						Increase /
	2023			2022			(Decrease)			2023			2022			(Decrease)
Revenues	$	-		$	-		$	-		$	-		$	-		$	-
Cost of sales		-			-			-			-			-			-
Gross profit		-			-			-			-			-			-

Operating expenses:
General and administrative		45,674			42,479			3,195			14,743			39,524			(24,781	)
Professional fees		128,440			259,977			(131,537	)		55,821			67,812			(11,991	)
Total operating expenses:		174,114			302,456			(128,342	)		70,564			107,336			(36,772	)

Operating loss		(174,114	)		(302,456	)		128,342			(70,564	)		(107,336	)		36,772

Total other income (expense)		52,293			(55,519	)		107,812			(70,417	)		(152,152	)		81,735

Net loss from continuing operations		(121,821	)		(357,975	)		236,154			(140,981	)		(259,488	)		118,507
Net income (loss) from discontinued operations		54,323			(15,621	)		69,944
Net loss	$	(67,498	)	$	(373,596	)	$	306,098
Net income from discontinued operations											292,627			19,158			273,469
Net income (loss)										$	151,646		$	(240,330	)	$	391,976

	Six Months Ended March 31,						Increase /
	2023			2022 revised			(Decrease)
Revenues	$	-		$	-		$	-
Cost of sales		-			-			-
Gross profit		-			-			-

Operating expenses:
General and administrative		85,198			82,135			3,063
Professional fees		175,637			470,822			(295,185	)
Total operating expenses:		260,835			552,957			(292,122	)

Operating loss		(260,835	)		(552,957	)		292,122

Total other income (expense)		(99,859	)		(112,000	)		12,141

Net loss from continuing operations	$	(360,694	)	$	(664,957	)	$	304,263
Net income (loss) from discontinued operations		52,866			13,758			39,108
Net loss		(307,828	)		(651,199	)		343,371

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 Current Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on March 16, 2020)
3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 10 filed with the Securities and Exchange Commission by Digipath, Inc. on July 15, 2011)
3.2		Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10 filed with the Securities and Exchange Commission by Digipath, Inc. on July 15, 2011)
3.3		Certificate of Amendment to Articles of Incorporation dated April 4, 2014 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on April 10, 2014)
3.4		Certificate of Designations, Preferences, Limitations, Restrictions and Relative Rights of Series A Convertible Preferred Stock dated April 9, 2014 (incorporated by reference to Exhibit 3.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on April 10, 2014)
3.5		Certificate of Amendment to Articles of Incorporation dated May 22, 2015 (incorporated by reference to Exhibit 3.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 26, 2015)
3.6		Certificate of Amendment to Articles of Incorporation dated May 14, 2019 (incorporated by reference to Exhibit 3.6 of the ~~Current~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 13, 2019)
3.7		Certificate of ~~Designations~~Designation of the Series B Preferred Stock ~~dated~~of Digipath, Inc., filed 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.~~Inc on January 6, 2022)
3.8		Certificate of Designation of the Series C Preferred Stock of Digipath, Inc., filed with the Secretary of State of the State of Nevada on July 20, 2022. (incorporated by reference to Exhibit 3.1 of the Report on 8-K filed with the Securities and Exchange Commission by Digipath, Inc on July 26, 2022)

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)
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)
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~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
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~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on February 14, 2020)
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~~Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on May 15, 2020)
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)
4.7*		Description of Securities
10.1		2012 Stock Incentive Plan (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 March 9, 2012)
10.2		Digipath, Inc. Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)
10.3		Form of Stock Option Grant Notice for grants under the Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on June 27, 2016)
10.4		Asset Purchase Agreement between Digipath, Inc., Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023 (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 May 2, 2023)
10.5		Management Services Agreement between Digipath, Inc., Digipath Labs, Inc. and IHE Holdings, LLC, dated April 20, 2023(incorporated by reference to Exhibit 10.1 of the Report on Form 8-K filed with the Securities and Exchange Commission by Digipath, Inc. on May 2, 2023)
10.6		Amended and Restated Secured Promissory Noted in the principal amount of $625,000, dated April 11, 2023, made by Invictus Wealth Group, LLC in favor of Digipath, Inc. (incorporated by reference to Exhibit 10.2 of the Report on Form 10-Q filed with the Securities and Exchange Commission by Digipath, Inc. on August 18, 2023
10.7*		Second Amended and Restated Secured Promissory Noted in the principal amount of $625,000, dated January 3, 2024, made by Invictus Wealth Group, LLC in favor of Digipath, Inc.
31.1*		Section 302 Certification of Principal Executive Officer
31.2*		Section 302 Certification of Principal Financial Officer
32.1*		Section 906 Certification of Principal Executive Officer
32.2*		Section 906 Certification of Principal Financial Officer
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Schema Document
101.CAL*		Inline XBRL Calculation Linkbase Document
101.DEF*		Inline XBRL Definition Linkbase Document
101.LAB*		Inline XBRL Labels Linkbase Document
101.PRE*		Inline XBRL Presentation Linkbase Document
104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

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