Borislav Tonev

Digipath Inc (OTCMKTS:DIGP) Receives Some Exposure

by Borislav Tonev March 31, 2016

Digipath Inc (OTCMKTS:DIGP, DIGP message board) entered the marijuana sector at the beginning of 2014 and it's fair to say that its first few months in the new business were a bit turbulent. Although DIGP's transformation into a pot stock coincided with the marijuana craze, the ticker wasn't especially popular in the beginning.

In July 2014, however, it suddenly started climbing rapidly. So rapidly, in fact, that the members of the management team decided to issue a press release stating that there are no concrete reasons for the steep price appreciation and warning investors to trust their own due diligence only.

Slowly but surely, the hype subsided and the stock settled down. The people who decided to stay with the company were bitterly disappointed when in May 2015, they were forced through a 1 for 10 reverse split. After it, volumes dried up and most investors stopped paying attention. But were they right to abandon DIGP?

Well, the company did manage to open its first cannabis testing lab ten months ago and thanks to it, it logged the following financial results at the end of last year:

  • cash: $64 thousand
  • current assets: $145 thousand
  • current liabilities: $48 thousand
  • quarterly revenues: $102 thousand
  • quarterly net loss: $1.7 million

In October, DIGP got rid of the majority interest in its digital pathology business which means that its future is now dependent solely on the cannabis testing facility. And by the looks of things, the facility in question has yet to yield the desired results.

A couple of recent interviews with Todd Denkin, the company CEO, and a few press releases do suggest, however, that DIGP is getting there. Mr. Denkin spoke with CFN Media Group (who received $7,500 for the coverage) recently and he was also interviewed by a YouTube channel called GFarma TV. He said that things are moving along nicely. On March 7, he also announced a one-year testing agreement with Silver Sage Wellness LLC – a licensed cannabis grower.

Thanks to all the exposure, DIGP entered the spotlight once again. On Monday, the ticker gained more than 47% and after a small correction on Tuesday, it added a further 25% during yesterday's session which means that it's now sitting at $0.225 per share.

The media coverage does suggest that the company is making serious progress and clearly, some people tend to believe in all the optimism. They should probably be careful not to get too carried away with the excitement, though.

Comments 1

1. Guest
March 31, 2016, 11:13AM

Quotes When I first purchased DIGP a year ago; my biggest concern was the possibility of a reverse stock split. But, I hung in there. Now, my biggest concern is another reverse stock split. So far this year the return on this stock has reached 76.9%. The number of local growers who are using the company for their testing has been climbing over the past eight months. My guess is that the volatility has more to due to traders out to make a quick buck, more than the quality service that Digipath provides clients.

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