A Uniq ue I nve stme nt Ve hic le in L a b o ra to ry T e sting - - PowerPoint PPT Presentation

A Uniq ue I nve stme nt Ve hic le in L a b o ra to ry T e sting

SAFE HARBOR STATEMENT

Ce rta in sta te me nts c o nta ine d in this pre se nta tio n, inc luding , witho ut limita tio n, sta te me nts c o nta ining the wo rd s “b e lie ve s,” “pla ns,” “e xpe c ts,” “a ntic ipa te s,” a nd wo rd s o f simila r impo rt, c o nstitute “fo rwa rd -lo o king sta te me nts” within the me a ning o f the Priva te Se c uritie s L itig a tio n Re fo rm Ac t o f 1995. Suc h fo rwa rd -lo o king sta te me nts invo lve kno wn a nd unkno wn risks, unc e rta intie s a nd o the r fa c to rs tha t ma y c a use the a c tua l re sults, pe rfo rma nc e o r a c hie ve me nts o f Dig ipa th, Inc . (to g e the r with Dig ipa th L a b s, I nc ., T he Na tio na l Ma rijua na Ne ws Co rp ., a nd the ir re spe c tive a ffilia te s, the “Co mpa ny” o r “Dig ipa th”) to b e ma te ria lly d iffe re nt fro m a ny future re sults, pe rfo rma nc e o r a c hie ve me nts e xpre sse d o r implie d b y suc h fo rwa rd -lo o king sta te me nts. Suc h fa c to rs inc lude , a mo ng o the rs, the fo llo wing : the Co mpa ny's ne e d fo r a d d itio nal fund ing , g o ve rnme ntal re g ula tio n o f the c a nna b is ind ustry, the d e ma nd fo r the Co mpa ny's pro d uc ts, the intro d uc tio n o f ne w pro d uc ts, the Co mpa ny's a b ility to ma inta in c usto me r a nd stra te g ic b usine ss re la tio nships, the impa c t o f c o mpe titive pro d uc ts a nd pric ing , g ro wth in ta rg e te d ma rke ts, the a d e q ua c y o f the Co mpa ny's liquidity a nd fina nc ia l stre ng th to suppo rt its g ro wth, the Co mpa ny’ s a b ility to suc c e ssfully inte g ra te a ny a c q uisitio n it ma y ma ke , a nd o the r risks d e ta ile d in the mo st re c e nt q ua rte rly a nd a nnual re po rts a nd o the r filing s. Give n the se unc e rta intie s, und ue re lia nc e sho uld no t b e pla c e d o n suc h fo rwa rd -lo o king sta te me nts. T he Co mpa ny d isc la ims a ny o b lig a tio n to upd a te a ny suc h fa c to rs o r to public ly a nno unc e the re sults o f a ny re visio ns to a ny o f the fo rwa rd -lo o king sta te me nts c o nta ine d he re in to re fle c t future e ve nts o r d e ve lo pme nts e xc e pt a s re q uire d b y la w. T his d o c ume nt is so le ly fo r info rma tio n purpo se s a nd is no t to b e c o nstrue d a s inve stme nt a d vic e o r a s a n o ffe r to se ll o r the so lic ita tio n o f a n o ffe r to b uy a ny se c urity in a ny sta te . T his d o c ume nt a nd its c o nte nts a re c o nfid e ntia l to the pe rso n(s) to who m it is de live re d a nd sho uld no t b e c o pie d o r d istrib ute d , in who le o r in pa rt, o r its c o nte nts d isc lo se d b y suc h pe rso n(s) to a ny o the r pe rso n. Any pa rty re c e iving a nd / o r re vie wing this ma te ria l, in c o nsid e ra tio n the re fo re , a g re e s no t to c irc umve nt the b usine ss pro po sa ls e xplic itly o r implic itly c o nta ine d he re in in a ny ma nne r, d ire c tly o r ind ire c tly. F urthe r, a ny re c ipie nt he re o f a g re e s to ma inta in a ll info rma tio n re c e ive d in the stric te st c o nfid e nc e a nd sha ll no t d isc lo se to a ny third pa rtie s a ny info rma tio n ma te ria l to the o ppo rtunity c o nta ine d he re in a nd , upo n re vie w he re o f, a g re e s tha t a ny una utho rize d d isc lo sure b y a ny pa rty will re sult in irre pa ra ble d a ma g e fo r whic h mo ne ta ry d a ma g e s wo uld b e diffic ult o r impo ssible to a c c ura te ly d e te rmine . Re c ipie nts re c o g nize , a nd he re b y a g re e , tha t the pro prie ta ry info rma tio n d isc lo se d he re in re pre se nts c o nfid e ntial a nd va lua ble pro prie ta ry info rma tio n a nd , the re fo re , will no t, witho ut e xpre ss prio r writte n c o nse nt, d isc lo se suc h info rma tio n to a ny pe rso n, c o mpa ny, e ntity o r o the r third pa rty, unle ss so d o ing wo uld c o ntra ve ne g o ve rning law o r re g ula tio ns. T his d o c ume nt is a n o utline o f ma tte rs fo r d isc ussio n o nly. T his d o c ume nt d o e s no t c o nstitute a nd sho uld no t b e inte rpre te d a s a d vic e , inc lud ing le g al, ta x o r a c c o unting a d vic e . T his pre se nta tio n inc lud e s sta te me nts tha t re pre se nt o pinio ns, e stima te s a nd fo re c a sts, whic h ma y no t b e re alize d . We b e lie ve the info rma tio n pro vid e d he re in is re lia ble , a s o f the d a te he re o f, b ut d o no t wa rra nt a c c ura c y o r c o mple te ne ss. In pre pa ring the se ma te ria ls, we ha ve re lie d upo n a nd a ssume d , witho ut ind e pe nd e nt ve rific a tio n, the a c c ura c y a nd c o mple te ne ss o f a ll info rma tio n a va ila b le fro m pub lic a nd c o mpa ny so urc e s.

2

CORPORATE OVERVIEW

T he National Mar ijuana Ne ws Cor

• p. pro vide s a b a la nc e d a ppro a c h to

c a nna b is ne ws, inte rvie ws, a nd e d uc a tio n with a ne ws/ ta lk ra dio sho w a nd na tio na l ma rijua na ne ws we b site fo c using

• n

the po litic a l, e c o no mic , me dic ina l, sc ie ntific , a nd c ultura l dime nsio ns o f the ra pidly e vo lving , a nd pro fo undly c o ntro ve rsia l, me dic ina l a nd re c re a tio na l ma rijua na industry.

Digipath L abs, Inc . is se tting the industry sta nda rd fo r te sting a ll

fo rms o f c a nna b is-b a se d pro duc ts using F DA-c o mplia nt la b o ra to ry e q uipme nt a nd pro prie ta ry pro c e sse s to re po rt pro duc t sa fe ty a nd e ffic a c y. I n Ma y 2015, the Co mpa ny o pe ne d its first te sting la b in L a s Ve g a s, Ne va da a nd ha s pla ns to o pe n la b s in o the r le g a l sta te s. Dig ipa th, I nc . (“Dig ipa th” o r “the Co mpa ny”) is a pub lic ly tra de d (OT CQB: DI GP) inde pe nd e nt la b o ra to ry te sting a nd me dia firm fo r the c a nna b is industry. T he Co mpa ny utilize s its e xpe rtise a nd e xpe rie nc e to pro vide re lia b le c a nna b is sa fe ty a nd po te nc y te sting , c a nna b is ne ws c o ve ra g e , a nd c o mpre he nsive ma rijua na e duc a tio n. 3

GROWTH OF LEGAL CANNABIS MARKET

4

GROWTH IN CANNABIS LAB TESTING

• As le g a liza tio n spre a d s, so do sta te ma nda te s fo r c a nna b is la b te sting fo r a n inc re a sing ly c o mpre he nsive list o f

re q uire me nts:

MOIST URE CONT E NT – T HC POT E NCY – CANNABINOID PROF IL ING – T E RPE NOID PROF IL ING – PE ST ICIDE S HE AVY ME T AL S – MICROBIAL SCRE E NING – MYCOT OXIN SCRE E NING – RE SIDUAL SOL VE NT S

• Curre ntly, 15 o f the 23 sta te s with le g a l o pe ra ting me dic a l c a nna b is ma rke ts re q uire c ultiva tio n c e nte rs,

pro duc tio n fa c ilitie s, a nd/ o r dispe nsa rie s to c o mply with va rio us la b te sting re q uire me nts.

• Gre e nWa ve Adviso rs, a n ind e pe nd e nt re se a rc h firm, pro je c ts lo ng -te rm re ve nue o f $553 million for lab te sting

alone if the U.S. le g a lize s c a nna b is o n a fe de ra l le ve l.

• Whe n a dding in re la te d se rvic e s, suc h a s da ta a na lytic s a nd c o nsulting , the re ve nue po te ntia l c o uld surpa ss

$866 million.

5

DIGIPATH LABS – LABORATORY TESTING

• Dig ipa th L

a b s’ missio n is to pro vide pha rma c e utic a l-g ra de a na lysis a nd te sting to the c a nna b is industry to e nsure c o nsume rs a nd pa tie nts kno w e xa c tly wha t is in the c a nna b is the y ing e st a nd to he lp ma ximize the q ua lity o f its c lie nts’ pro d uc ts thro ug h re se a rc h, d e ve lo pme nt, a nd sta nda rdiza tio n.

• Dig ipa th

L a b s is c o mmitte d to fo llo wing Go o d L a b Pra c tic e s tha t a re in line with c urre nt F e d e ra l a nd Sta te g o ve rning b o die s.

*Note tha t pa st pe r

for ma nc e ma y not be indic a tive of futur e r e sults. T he r e for e , it should not be a ssume d tha t futur e pe r for ma nc e of Dig ipa th, Inc . (tog e the r with Dig ipa th L a bs, Inc ., T he Na tiona l Ma r ijua na Ne ws Cor p., a nd the ir r e spe c tive a ffilia te s) will be pr

• fita ble or

e qua l the c or r e sponding indic a te d pa st pe r for ma nc e le ve l(s).

6

• Dr. Cindy Orse r, Ph.D., a 20-ye a r b io te c h a nd dia g no stic industry ve te ra n, le a ds the se e ffo rts o n b e ha lf o f

Dig ipa th, se rving a s Chie f Sc ie nc e Offic e r, a ssisting c a nna b is pro vide rs a nd re g ula to ry a g e nc ie s, a nd wo rking in a c a de mia in se ve ra l ke y ro le s. I n a dditio n to he r wo rk a t Dig ipa th L a b s, she ho lds 18 pa te nts a nd a utho re d 41 pe e r-re vie we d pub lic a tio ns.

• Dig ipa th L

a b s b e g a n e a rning sub sta ntive re ve nue in Oc to b e r 2015 a nd ha s no w te ste d mo re tha n 5,500 c a nna b is pro duc t sa mple s, re pre se nting o ve r 25,000 po unds o f c ure d flo we r fro m ma ny o f the 66 g ro we rs lic e nse d b y the Sta te o f Ne va da .*

ENSURING SAFETY & COMPLIANCE

Dig ipa th L a b s sc re e ns me dic ina l c a nna b is fo r its q ua lity, po te nc y, a nd c a nna b ino id a nd te rpe ne no id pro file s, a s we ll a s po te ntia lly ha rmful c o nta mina nts, inc luding :

• Re sidua l so lve nts (fo r no n-CO 2 e xtra c ts)
• Pe stic ide s
• He a vy me ta ls (inc luding me rc ury, a rse nic ,

le a d, a nd c a dmium)

• Mo ld a nd ye a st
• Bio lo g ic a l

to xins (suc h a s myc o to xins, a fla to xins, a nd o c ra to xins)

• Mic ro b ia l c o nta mina nts (inc luding E

. c o li, sa lmo ne lla , Aspe rg illus, a nd fung i)

• T
• ta l a e ro b ic b a c te ria c o unt
• Gra m-ne g a tive b a c te ria

7

CREATING TESTING STANDARDS

• T

he Co mpa ny o ffe rs c o mpre he nsive me dic a l c a nna b is sa fe ty sc re e ning a nd a n inde pe nd e nt c e rtific a tio n syste m, inc luding the “Dig ipa th L a b s Ce rtifie d” se a l.

• Ce rtific a tio n se a ls a re ma de a va ila b le to tho se c lie nts who se

pro duc ts ha ve und e rg o ne a ll o f Dig ipa th te sts (a s a pplic a b le ), unle ss the sa mple in q ue stio n do e s no t me e t lo c a l re g ula to ry sta nda rds.

• “Dig ipa th L

a b s Ce rtifie d” se a ls e nsure tha t Dig ipa th ha s te ste d the pro duc t in q ue stio n a nd e ng e nd e r influe nc e o ve r c o nsume r b uying de c isio ns b y c le a rly ma rking whic h b ra nds a re inve ste d in the pro duc ts the y pro vide , va luing sa fe ty, e ffe c tive ne ss, a nd

• ve ra ll q ua lity.

Re c o g nizing tha t the le g a l c a nna b is industry’ s yo uthfulne ss ha s re sulte d in a la c k o f struc ture a nd o ve rsig ht, Dig ipa th de ve lo pe d its la b te sting so lutio ns a nd te c hno lo g y to c re a te struc ture a nd pro c e ss a nd , in the e nd , e nsure ma ximum c a nna b is sa fe ty thro ug h e duc a tio n, te sting , a nd c e rtific a tio n. 8

GENETIC TESTING SERVICES – STRAINSEEK™

Dig ipa th L a b s o ffe rs Stra inSE E K ™, a me dic ina l g e no mic s pro prie ta ry DNA se q ue nc ing se rvic e fo r the c a nna b is pla nt. T he se rvic e de te c ts a nd re c o rds the uniq ue g e ne tic pro file o f a ny c a nna b is stra in.

• Stra inSE

E K ™ is the

• nly

pla tfo rm tha t e na b le s the pe rma ne nt dig ita l pub lishing o f a stra in’ s uniq ue g e ne tic I D fo r future re fe re nc e .

• Stra inSE

E K ™ a llo ws fo r a n individua l stra in to b e ma ppe d a g a inst Me dic ina l Ge no mic s’ Ca nna b is Phylo g e ne tic T re e .

• Stra inSE

E K ™ use rs c a n vie w the ir stra ins g e ne tic pro ximity to se ve ra l c a nna b is la nd ra c e s a s we ll a s ma ny mo de rn c ultiva rs. As the phylo g e ne tic tre e g ro ws, a distrib ute d c o nse nsus o n the a c c ura c y o f na ming c o nve ntio ns will e me rg e . T his will e nd the “stra in na me g a me ” a nd will pro vide me d ic a l c a nna b is pa tie nts with a me a ns to ide ntify me dic ina l stra ins with pro ve n the ra pe utic b e ne fits. 9

NEVADA LAB TESTING MARKET GROWS

• T

he Co mpa ny ha s no w te ste d mo re tha n 5,500 c a nna b is pro d uc t sa mple s, re pre se nting o ve r 25,000 po und s o f flo we r a nd trim, fro m ma ny o f the 51 g ro we rs a nd 27 pro d uc tio n fa c ilitie s in Cla rk, Nye , a nd Wa sho e Co untie s lic e nse d b y the Sta te o f Ne va d a . (T he L a s Ve g a s L a b is in Cla rk Co unty)

• T

he numb e r o f po te ntia l c usto me rs fo r Dig ipa th in Cla rk Co unty in Ne va d a ha s mo re tha n d o ub le d YT D in 2016 to 72 lic e nse d o pe ra to rs (47 c ultiva tio n fa c ilitie s a nd 25 pro d uc tio n fa c ilitie s).*

• I

n a dditio n, Ne va d a ’ s po lic y o f re c ipro c ity, i.e . a c c e pting me d ic a l ma rijua na (MMJ) pa tie nts fro m o ut o f the sta te , po sitio ns Ne va da to b e c o me a mo ng the la rg e st a nd fa ste st g ro wing MMJ ma rke ts in the c o untry.

• Re c re a tio na l ma rijua na

a lso just pa sse d in Ne va d a a nd sho uld g o into e ffe c t in 2017.

Dig ipa th g a ine d stro ng mo me ntum during the first nine mo nths o f 2016, sig ning six, thre e , a nd fo ur ne w e xc lusive c usto me rs in Q3, Q2, a nd Q1 o f 2016, re spe c tive ly.

L AB IS E QUIPPE D T O DO 200 SAMPL E S PE R DAY

*Note tha t the infor

ma tion c onta ine d in the for e c a st c onstitute s for wa r d- looking sta te me nts, whic h involve r isks a nd unc e r ta intie s. T he Compa ny's a c tua l r e sults ma y diffe r sig nific a ntly fr

• m the for

e c a st for a numbe r

• f r

e a sons, inc luding fa ilur e to a c hie ve a ny of the a ssumptions unde r lying suc h for e c a st or a ny numbe r

• f r

isk fa c tor s inc luding the ina bility to r a ise suffic ie nt c a pita l. Se e Risk F a c tor

• s. T

he Compa ny e xpr e ssly disc la ims a ny oblig a tions or unde r ta king to r e le a se a ny upda te s or r e visions to the for e c a st.

10

100 200 300 400 500 600 May- 15 Jun- 15 Jul- 15 Aug- 15 Se p- 15 Oc t- 15 Nov- 15 De c - 15 Jan- 16 F e b- 16 Mar

• 16

Apr

• 16

May- 16 Jun- 16 Jul- 16 Aug- 16 Se p- 16 Oc t- 16 Nov- 16

Cannabis Sample s T e ste d by Month

EVOLUTION AS A MARKET LEADER

• T

hro ug h Dr. Cindy Orse r’ s wo rk with Ne va da sta te o ffic ia ls, Dig ipa th pio ne e re d c a nna b is la b te sting pro to c o ls in Ne va da ’ s imple me nta tio n o f the na tio n’ s mo st string e nt po lic ie s o n c a nna b is sa fe ty, whic h ha s po sitio ne d the Co mpa ny a s a ma rke t le a de r in c a nna b is la b te sting .

• T

hro ug h the Co mpa ny’ s inva lua b le e xpe rie nc e in Ne va da , Dig ipa th ha s de ve lo pe d a g re a te r und e rsta nding

• f the nua nc e d ne e ds o f the industry a s we ll a s a n a b ility to na vig a te the c o mple x re g ula to ry e nviro nme nt a t

the sta te le ve l re g a rding c a nna b is te sting .

• Sta te s na tio nwid e a re lo o king to de ve lo p la b te sting po lic ie s simila r to Ne va da ’ s string e nt re q uire me nts, whic h

c re a te de ma nd fo r q ua lifie d la b o ra to rie s to pe rfo rm suc h te sting .

• Dig ipa th is c urre ntly a ssisting re g ula to ry a utho ritie s in sta te s a nd lo c a litie s pro po sing ne w le g isla tio n in dra fting

la b te sting re g ula tio ns fo r le g a l c a nna b is sta te s.

• Be ing invo lve d in the intro duc tio n o f the b e nc hma rk fo r re g ula tio ns in the industry ha s pro vide d a uniq ue

ma rke t a dva nta g e a nd o ppo rtunity to e sta b lish the Dig ipa th b ra nd o n the na tio na l le ve l. As a re sult, the Co mpa ny is po sitio ne d a s a first mo ve r in e a c h o f the ne w sta te s in whic h c a nna b is is de e me d le g a l. 11

LICENSING OPPORTUNITY EVOLVES

As a dditio na l sta te s a nd c o untrie s vo te o n a nd imple me nt le g a lize d c a nna b is pro g ra ms, ma ny will lo o k to de ve lo p la b te sting po lic ie s a nd pro c e d ure s simila r to Ne va da ’ s string e nt re q uire me nts; so , to o , will the ne wly lic e nse d la b te sting c o mpa nie s in the se ma rke ts. As suc h, Dig ipa th is in po sitio n to a c t a s a c o nsulta nt to the se sta te s, c o untrie s, a nd la b te sting c o mpa nie s re g a rding its o pe ra tio na l, te c hnic a l, a nd b usine ss kno w-ho w, inc luding :

• L

a b fa c ility b uild o ut

• Pa tie nt ma nua ls
• Da ta a nd a na lytic s
• T

e sting pro to c o ls

• Sta nda rd o pe ra ting pro c e dure s (SOPs)
• E

duc a tio na l ma te ria ls

• L

I MS (L a b o ra to ry I nfo rma tio n Ma na g e me nt Syste m)

• Ma rke ting ma te ria ls

Dig ipa th will c o lle c t upfro nt a nd o ng o ing lic e nsing a nd c o nsulting fe e s a s c o mpe nsa tio n. 12

MARKETING/ADVERTISING OUR BRAND

• Dr. Cind y Orse r

Spo nso re d b y:

We b Mo b ile So c ia l

13

THE NATIONAL MARIJUANA NEWS*

• In Ma y 2014, the Co mpa ny e sta b lishe d a n o nline ra dio pro g ra m c a lle d T

he Na tio na l Ma rijua na Ne ws (T NMNe ws).

• T

NMNe ws e duc a te s the pub lic re g a rding the po litic a l, e c o no mic , me dic ina l, sc ie ntific , a nd c ultura l dime nsio ns o f the ra pidly e vo lving a nd c o ntro ve rsia l me dic ina l a nd re c re a tio na l ma rijua na industry fro m dive rse a nd disse nting pe rspe c tive s with ne ws a nd inte rvie ws.

• T

he Co mpa ny la unc he d T NMNe ws’ I nte rne t ra dio pro g ra m o n L ive 365 in 2014 (no w a t ra dio .c o ), a nd its po pula rity ha s c o ntinue d to g ro w. Ove rthe 2015 fisc a l ye a r, the pro g ra m g re w fro m 120,000 to o ve r190,000 stre a ms pe r mo nth.

• T

he Co mpa ny a lso la unc he d its a pplic a tio n fo r b o th iOS a nd Go o g le Pla y a nd re -la unc he d its we b site , whic h no w re c e ive s o ve r200,000 pa g e visits pe r mo nth. T NMNe ws F a c e b o o k pa g e ha s a lso g a rne re d o ve r156,000 pa g e like s.

*Note tha t pa st pe r

for ma nc e ma y not be indic a tive of futur e r e sults. T he r e for e , it should not be a ssume d tha t futur e pe r for ma nc e of Dig ipa th, Inc . (tog e the r with Dig ipa th L a bs, Inc ., T he Na tiona l Ma r ijua na Ne ws Cor p., a nd the ir r e spe c tive a ffilia te s) will be pr

• fita ble or

e qua l the c or r e sponding indic a te d pa st pe r for ma nc e le ve l(s).

14

NATIONWIDE EXPANSION STRATEGY

• T

wo, str aight- for war d gr

• wth str

ate gie s:

• Ca pita lize o n the Co mpa ny’ s e xisting stre ng ths
• Ac q uisitio n o ppo rtunitie s

Re a lizing the hig hly fra g me nte d na ture

• f the

c a nna b is te sting industry ha s c re a te d sub sta ntia l c o nso lida tio n o ppo rtunitie s, Dig ipa th re struc ture d its b usine ss to fo c us o n re plic a ting the Dig ipa th L a b s mo d e l in o the r c a nna b is-le g a l sta te s, b o th thro ug h o rg a nic g ro wth a nd a c q uisitio n o ppo rtunitie s. Unde r the le a de rship

• f Dr. Cindy Orse r, Chie f Sc ie nc e

Offic e r o f Dig ipa th L a b s, the Co mpa ny is e xplo ring o ppo rtunitie s in o the r sta te s, inc luding Ne w Yo rk, I llino is, Pue rto Ric o a nd Ca lifo rnia , a mo ng o the rs.

15

EXPANSION TO CLINICAL LAB TESTING

I n a dditio n to e xpa nding Dig ipa th c o re c a nna b is te sting b usine ss thro ug h inte rna l g ro wth, the Co mpa ny inte nd s to c a pita lize o n ta rg e te d g ro wth o ppo rtunitie s within the b ro a de r c linic al labor

ator y te sting industr y.

• I

n 2015, the U.S. c linic a l la b o ra to ry te sting industry g e ne ra te d re ve nue s o f a ppro xima te ly $60 b illio n.

• T

he Ce nte rs fo r Me dic a re a nd Me dic a id Se rvic e s (CMS) e stima te d tha t in 2015 the re we re a ppro xima te ly 9,000 ho spita l-b a se d la b o ra to rie s, mo re tha n 122,000 physic ia n-

• ffic e

la b o ra to rie s, a nd mo re tha n 6,000 inde pe nde nt c linic a l la b o ra to rie s in the U.S.

• While

the re ha s b e e n sig nific a nt c o nso lida tio n in the c linic a l la b o ra to ry te sting industry in re c e nt ye a rs, the industry re ma ins fra g me nte d a nd hig hly c o mpe titive , with the a ve ra g e re ve nue pe r e sta b lishme nt b e lo w $1.5 millio n. 16

ACQUISITION OPPORTUNITIES IN THE CLINICAL LAB TESTING MARKET

Due to the fra g me nte d na ture a nd stro ng g ro wth pro spe c ts o f the c linic a l la b o ra to ry te sting industry, Dig ipa th ha s prio ritize d g ro wing the Co mpa ny thro ug h a c q uisitio ns o f tra ditio na l, we ll-re spe c te d c linic a l la b o ra to ry o pe ra tio ns in va rio us sta te s, re g a rdle ss o f the le g a l sta tus o f c a nna b is the re in, a nd thro ug h a c q uiring a dditio na l c a pa b ilitie s to b ro a de n the Co mpa ny’ s pro duc t o ffe ring s in a re a s re la te d to la b o ra to ry se rvic e s. Ma na g e me nt b e lie ve s tha t thro ug h a stra te g ic ro ll-up stra te g y, Dig ipa th will b e a b le to ra pidly inc re a se its sha re

• f the o ve ra ll c linic a l la b o ra to ry te sting ma rke t d ue to a

numb e r o f fa c to rs, inc luding :

• Co st e ffic ie nc ie s a ffo rde d b y la rg e -sc a le , a uto ma te d

te sting .

• Syne rg ie s

thro ug h me rg e rs a nd a c q uisitio ns

• f

c o mple me nta ry b usine sse s.

• Re imb urse me nt re d uc tio ns a nd sub se q ue nt d e ma nds

fro m he a lth pla ns a nd o the r he a lthc a re o rg a niza tio ns fo r g re a te r e ffic ie nc y.

• L

a rg e , inte g ra te d se rvic e ne two rks.

Digipath’s Str ate gic Ac quisition T ar ge ts

17

MANAGEMENT’S ABILITY TO IMPLEMENT ACQUISITION STRATEGY

T he re c e nt a ppo intme nt o f Jo se ph Bia nc o a s Dig ipa th’ s c hie f e xe c utive o ffic e r b ring s to the Co mpa ny a n e xe c utive with a de mo nstra b le tra c k re c o rd o f suc c e ss in spo tting a nd imple me nting stra te g ic g ro wth a nd c o nso lida tio n o ppo rtunitie s in hig hly fra g me nte d ma rke ts. Afte r g ra dua ting fro m Ya le L a w Sc ho o l a nd te a c hing la w fo r se ve ra l ye a rs, Mr. Bia nc o fo unde d British Pe rfo rma nc e Ca rs, I nc ., the e xc lusive U.S. distrib uto r o f the L

• tus Ma rq ue , whic h wa s e ve ntua lly so ld to

Ge ne ra l Mo to rs. Sub se q ue ntly, he fo rme d Allia nc e E nte rta inme nt Co rp., whic h wa s liste d o n the NYSE a nd wa s, a t the time , the la rg e st inde pe nde nt distrib uto r o f re c o rde d music in the wo rld. Allia nc e , whic h wa s e ve ntua lly so ld to a priva te e q uity fund , wa s the pro duc t o f a ro ll-up o f o ve r a do ze n sma lle rc o mpa nie s. By le ve ra g ing Mr. Bia nc o 's e xpe rtise , the Co mpa ny is po sitio ne d to utilize Dig ipa th a s a pub lic ve hic le to no t o nly g e ne ra te fina nc ia l va lue thro ug h the suc c e ssful inte g ra tio n o f a c q uire d a sse ts b ut a lso a rb itra g e va lue b y a c q uiring priva te la b te sting c o mpa nie s a t a disc o unt to the ir po te ntia l va lue in the pub lic ma rke ts.

18

ARBITRAGE OPPORTUNITY

19

($ Millions) - as of 11/29/2016 Medical Testing Labs Laboratory Corp of America Holdings NYSE LH 18,770.0 $ 13,155.2 $ 1.4x 2.0x 10.9x 9,336.7 $ 1,724.0 $ 18.3% Quest Diagnostics, Inc. NYSE DGX 15,830.0 $ 12,304.3 $ 1.6x 2.1x 11.7x 7,503.0 $ 1,358.0 $ 20.6% Life Sciences Tools & Services Waters Corp. NYSE WAT 10,160.0 $ 11,089.9 $ 5.2x 4.8x 14.3x 2,125.2 $ 710.2 $ 34.4% Agilent Technologies, Inc. NYSE A 14,050.0 $ 14,428.6 $ 3.5x 3.4x 16.4x 4,126.0 $ 855.0 $ 20.2% PerkinElmer, Inc. NYSE PKI 6,430.0 $ 5,605.4 $ 2.5x 2.8x 15.4x 2,267.6 $ 417.5 $ 19.5% Thermo Fisher Scientific, Inc. NYSE TMO 72,730.0 $ 55,805.2 $ 3.1x 4.0x 17.7x 17,973.4 $ 4,104.7 $ 21.7% Environmental & Facilities Services Republic Services, Inc. NYSE RSG 26,700.0 $ 19,003.9 $ 2.0x 2.9x 11.2x 9,298.8 $ 2,376.7 $ 20.6% Stericycle, Inc. NASDAQGS SRCL 9,440.0 $ 6,451.9 $ 1.8x 2.7x 12.4x 3,544.2 $ 761.3 $ 21.7% Waste Management, Inc. NYSE WM 40,370.0 $ 31,112.6 $ 2.3x 3.0x 11.6x 13,395.0 $ 3,470.0 $ 25.3% Other Labs & Related Services Danaher Corp. NYSE DHR 62,150.0 $ 54,734.4 $ 2.6x 2.9x 13.0x 21,189.1 $ 4,776.7 $ 17.2% Ecology and Environment, Inc. NASDAQGM EEI 30.1 $ 27.0 $ 0.3x 0.3x 5.7x 105.7 $ 5.3 $ 6.3% IDEXX Laboratories, Inc. NASDAQGS IDXX 11,390.0 $ 10,789.5 $ 6.2x 6.6x 27.6x 1,732.2 $ 412.4 $ 24.3% Clean Harbors, Inc. NYSE CLH 4,340.0 $ 2,963.2 $ 1.1x 1.6x 11.7x 2,776.1 $ 372.4 $ 14.6% Average (of above) 22,491.5 $ 18,267.0 $ 2.6x 3.0x 13.8x 7,336.4 $ 1,641.9 $ 20.4% Median (of above) 14,050.0 $ 12,304.3 $ 2.3x 2.9x 12.4x 4,126.0 $ 855.0 $ 20.6% MARKET CAP. (11/29/2016) PRICE/SALES (TTM) EV/EBITDA (TTM) EV/SALES (TTM) REVENUE (TTM) EBITDA (TTM) EBITDA MARGIN (Q3'16) TICKER EXCHANGE COMPANY ENTERPRISE VALUE (11/29/2016)

EXPERIENCED MANAGEMENT TEAM

Jose ph Bianc o, Chie f E

xe c utive Offic e r& Chairman Jo se ph Bia nc o wa s a ppo inte d to Dig ipa th’ s Bo a rd o f Dire c to rs in Oc to b e r 2015 a nd c urre ntly se rve s a s its c ha irma n. I n June 2016, he wa s a lso a ppo inte d to Chie f E xe c utive Offic e r. Mr. Bia nc o ha s b e e n the CE O o f Whyte L yo n & Co mpa ny, I nc . sinc e 1984. Afte r g ra dua ting fro m Ya le L a w Sc ho o l a nd te a c hing la w fo r se ve ra l ye a rs, Mr. Bia nc o fo und e d British Pe rfo rma nc e Ca rs, I nc ., the e xc lusive U.S. distrib uto r o f the L

• tus Ma rq ue , whic h wa s e ve ntua lly so ld to Ge ne ra l Mo to rs.

Sub se q ue ntly, he fo rme d Allia nc e E nte rta inme nt Co rp., whic h wa s liste d o n the NYSE a nd wa s the n the la rg e st inde pe nd e nt distrib uto r o f re c o rde d music in the wo rld . Allia nc e , whic h wa s e ve ntua lly so ld to a priva te e q uity fund , wa s the pro duc t o f a ro ll-up o f o ve r a do ze n sma lle r c o mpa nie s. Mr. Bia nc o 's a c q uisitio ns e xpe rie nc e will b e e spe c ia lly re le va nt to Dig ipa th's g ro wth stra te g y. Mr. Bia nc o a lso c urre ntly se rve s a s c ha irma n a nd CE O o f Oa k T re e E d uc a tio n. He is a lso c ha irma n o f E ve rg re e n Re vie w, I nc ., a no t-fo r-pro fit re viva l o f a lite ra ry ma g a zine pro mine nt in the 1960’ s a nd 1970’ s. He b e g a n te a c hing la w, jo ining the fa c ulty o f Ca rdo zo la w sc ho o l whe re he b e c a me a sso c ia te d e a n. He a utho re d two b o o ks, “T he L a w o f Co rpo ra tio ns” (Fo unda tio n Pre ss, Unive rsity Ca se b o o k Se rie s) with Ya le pro fe sso r Ja n De utsc h a nd “T he L a w o f Unma rrie d Co uple s” (De ll), a s we ll a s se ve ra l sc ho la rly a rtic le s. During this pe rio d, he a lso c o nsulte d to nume ro us c o rpo ra tio ns a nd inve stme nt b a nks, princ ipa lly o n ta x ma tte rs. 20

EXPERIENCED MANAGEMENT TEAM

T

• dd De nkin, Pre side nt & Chie f Ope rating Offic e r

Ove r the la st e ig hte e n mo nths, T

• dd De nkin ha s tra nsfo rme d Dig ipa th, I

nc . fro m a pure dig ita l pa tho lo g y so lutio n pro vide r into a firm tha t ho lds a le a d e rship po sitio n in the me dic a l c a nna b is te sting ma rke t. He is a lso the Pre side nt a nd Ho st o f T he Na tio na l Ma rijua na Ne ws, o ne o f Dig ipa th’ s who lly o wne d sub sidia rie s, whic h a irs we e kly o n T NMNe ws.c o m. I n 2009, Mr. De nkin ide ntifie d the tre nd in g ro w-yo ur-o wn hydro po nic syste ms a nd c o -fo und e d a se lf-c o nta ine d hydro po nic syste m le a de r, Pho to tro n Ho lding s (PHOT ), he lping ta ke the c o mpa ny pub lic a nd se rving a s its pre side nt. F ro m 2000 to 2008, Mr. De nkin re c o g nize d the po we r o f stre a ming me dia o ve r the inte rne t a nd he lpe d la unc h Dig ita l F X I nte rna tio na l (DXN), ta ke tha t c o mpa ny pub lic , a nd g ro w it to a $300 millio n ma rke t c a p. He is a 30-ye a r ma rke ting ve te ra n fro m the T V a nd film industry, wo rking a t to p c o mpa nie s like Dic k Cla rk Pro duc tio ns, Nic ke lo de o n Ne two rk, Disne y/ MGM Studio s, a nd T ime Wa rne r. Mr. De nkin ha s b e e n a ke y c o ntrib uto r to sho ws fo r ABC, NBC, CBS, E SPN, a nd MT

• V. He

ha s a lso pro duc e d , dire c te d , a nd e dite d tho usa nd s o f c o mme rc ia ls, music vide o s, info me rc ia ls, a nd sho rt films. 21

EXPERIENCED MANAGEMENT TEAM

Cindy Or se r , Ph.D., Chie f Sc ie nc e Offic e r

As Chie f Sc ie nc e Offic e r a t Dig ipa th L a b s, Cindy Orse r, Ph.D., ha s de ve lo pe d a n industry-le a ding me dic a l c a nna b is te sting fa c ility in L a s Ve g a s, NV. T he la b se rve s a s a mo de l the c o mpa ny pla ns to re plic a te in o the r sta te s whe re c a nna b is is a llo we d b y sta te la w. Dr. Orse r is ro utine ly c a lle d upo n to d e live r e xpe rt te stimo ny

• n

c a nna b is te sting , whic h he lps la wma ke rs a nd la w e nfo rc e me nt und e rsta nd the impo rta nc e o f c a nna b is te sting a nd the imple me nta tio n o f rig o ro us sta nda rd s. I n mid-2015, she a ddre sse d the Co nfe re nc e o f We ste rn Atto rne ys Ge ne ra l (CWAG) o n the se sa lie nt po ints. With e ig hte e n pa te nts a nd fo rty-o ne pub lishe d pa pe rs, Dr. Orse r dra ws fro m

• ve r 25 ye a rs o f e xpe rie nc e inno va ting in a c a de mia a nd priva te industry. He r a c hie ve me nts ha ve

c e nte re d o n visio na ry, stra te g ic pla nning a s we ll a s e xe c uting , fundra ising , b udg e ting , sta ffing , ma na g ing pe rso nne l, ide ntifying o utside c o lla b o ra to rs, a nd dire c ting sub c o ntra c to rs. She ha s a lso se rve d a s the lia iso n b e twe e n he r c o mpa ny, Big Sky Bio syste ms I nc ., a nd fe de ra l re g ula to ry c o mplia nc e a g e nc ie s suc h a s the F DA, CDC, a nd ARC. 22

EXPERIENCED MANAGEMENT TEAM

T

• dd Pe te r

son, CPA, Chie f F

inanc ial Offic e r T

• dd Pe te rso n, CPA, ha s b e e n the c hie f fina nc ia l o ffic e r o f Dig ipa th sinc e June 19, 2015. Mr.

Pe te rso n ha d pre vio usly, sinc e Aug ust 2008, b e e n the pre side nt o f K SNE 2 E nte rprise s, L L C, a n a c c o unting a nd c o nsulting firm lo c a te d in L a s Ve g a s, Ne va da tha t spe c ia lize s in pub lic ly tra de d mic ro -c a p c o mpa nie s. F ro m F e b rua ry 2007 to Aug ust 2008, he wa s the se nio r a c c o unting ma na g e r o f Ac c uity F ina nc ia l, a n a c c o unting firm lo c a te d in L a s Ve g a s, Ne va da tha t spe c ia lize s in pub lic ly tra de d mic ro -c a p c o mpa nie s. Mr. Pe te rso n wa s the a udit ma na g e r o f De Jo ya Griffith a nd Co mpa ny, a PCAOB-re g iste re d a ud it firm lo c a te d in L a s Ve g a s, Ne va da , pro viding a udit a nd a c c o unting se rvic e s prima rily to pub lic ly tra d e d mic ro -c a p c o mpa nie s fro m No ve mb e r 2004 to F e b rua ry 2007. He wa s the a udit ma na g e r o f Oc e l, He ime r & Asso c ia te s, L td ., a re g io na l a udit firm lo c a te d in Minne a po lis, Minne so ta fro m 1999 to 2004. Upo n g ra dua ting fro m the Unive rsity o f St. T ho ma s with a Ba c he lo r o f Arts de g re e in a c c o unting in 1997, Mr. Pe te rso n wo rke d a s a sta ff a c c o unta nt during 1998 fo r R.W. Ra msa y & Asso c ia te s, L td. 23

DIGIPATH, INC. (OTCQB:DIGP)

Jo se ph Bia nc o , CE O Pho ne : 702.209.2429 E

• ma il: jjb ia nc o @ dig ipa th.c o m

Sc o tt Gre ipe r Viridia n Ca pita l Adviso rs, L L C/ Pic kwic k Ca pita l Pa rtne rs, L L C Pho ne : 212.333.0202 E ma il: sg re ipe r@ viridia nc a .c o m

Br

• ke r
• De ale r

Se r vic e s Pr

• vide d T

hr

• ugh Pic kwic k Capital Par

tne r s, L L C, Me mbe r F INRA/ SIPC T his doc ume nt doe s not c onstitute an offe r

• f se c ur

itie s. Ple ase se e Disc laime r

• n page 25.

24

DISCLOSURE

T his o ve rvie w is fo r info rma tio na l purpo se s o nly a nd do e s no t c o nstitute a n o ffe r to se ll o r a so lic ita tio n o f a n o ffe r to b uy a ny units (“units”) in Dig ipa th. Any suc h o ffe r will b e ma de o nly pursua nt to Dig ipa th’ s Priva te Pla c e me nt Me mo ra ndum. T his o ve rvie w inc lude s pro je c tio ns, va lua tio ns, e stima te s a nd o the r fina nc ia l da ta . Any info rma tio n re g a rding pro je c te d o r e stima te d inve stme nt re turns a re e stima te s o nly a nd sho uld no t b e c o nside re d indic a tive o f the a c tua l re sults tha t ma y b e re a lize d o r pre dic tive o f the pe rfo rma nc e o f Dig ipa th. Prio r to inve sting , inve sto rs a re stro ng ly urg e d to re vie w c a re fully the Priva te Pla c e me nt Me mo ra ndum (inc luding the risk fa c to rs de sc rib e d the re in), the Dig ipa th Ope ra ting Ag re e me nt a nd the Sub sc riptio n Do c ume nts, to a sk suc h q ue stio ns o f Dig ipa th ma na g e me nt a s the y d e e m a ppro pria te , a nd to disc uss a ny pro spe c tive inve stme nt in Dig ipa th with the ir le g a l a nd ta x a dvise rs in o rde r to ma ke a n inde p e nde nt d e te rmina tio n o f the suita b ility a nd c o nse q ue nc e s

• f a n inve stme nt.

Inve stme nt in Dig ipa th is suita b le o nly fo r so phistic a te d inve sto rs who fully unde rsta nd, a nd a re willing to a ssume , the risks invo lve d in a n inve stme nt in Dig ipa th. No pe rso n ha s b e e n a utho rize d to g ive a ny info rma tio n o r to ma ke a ny re pre se nta tio n, wa rra nty, sta te me nt o r a ssura nc e no t c o nta ine d in the Priva te Pla c e me nt Me mo ra ndum a nd, if g ive n o r ma de , suc h o the r info rma tio n o r re pre se nta tio n, wa rra nty, sta te me nt o r a ssura nc e ma y no t b e re lie d upo n. T he o ffe ring o f units in Dig ipa th will b e ma d e in re lia nc e upo n a n e xe mp tio n fro m re g istra tio n unde r Re g ula tio n D pro mulg a te d unde r the Se c uritie s Ac t o f 1933, a s a me nd e d , fo r o ffe rs a nd sa le s o f units tha t do no t invo lve a pub lic o ffe ring . No pub lic o r o the r ma rke t will de ve lo p fo r the units, a nd the units a re no t g e ne ra lly o the rwise tra nsfe ra b le . E a c h purc ha se r o f units in Dig ipa th must b e a n “a c c re dite d inve sto r” a s de fine d in Rule 501 o f Re g ula tio n D. No pa rt o f this ma te ria l ma y b e (i) c o pie d, pho to c o pie d o r duplic a te d in a ny fo rm, b y a ny me a ns, o r (ii) re distrib ute d witho ut Dig ipa th’ s prio r writte n c o nse nt.

25