Know Labs, Inc. (NYSE American: KNW), a leading developer of
non-invasive medical diagnostic technology, today reported
financial results for the third quarter of the fiscal year 2024
ended June 30, 2024.
Financial Highlights:
- In Q3 FY 2024, Know Labs reported a net loss of $4.10 million
dollars, compared to a net loss of $3.60 million dollars in Q3 FY
2023, an increase in net loss of 13.9%. This translates to earnings
per share of a loss of $0.05, better than the prior year earnings
per share loss of $0.07, before preferred stock dividends.
- Recorded a non-cash charge to earnings of $1.58 million dollars
principally related to stock-based compensation of $1.0 million
dollars, amortization of operating lease right-of-use asset of
$276,000, and interest expense for the extension of notes and
warrants of $240,000.
- Research and development expense for Q3 FY 2024 was $1.35
million dollars as compared to $1.88 million dollars in Q3 FY 2023,
a decrease of 28.2% year over year. The decrease was due primarily
to the completion of hardware and software product development
milestones and continued use of consultants to reduce the cost of
product development.
- Selling, general and administrative expenses for Q3 FY 2024 was
$2.49 million dollars, which was higher by $1.13 million dollars
than the $1.36 million dollars in the year ago period. The increase
was due primarily to salary expenses for several key hires, legal
expenses related to financing activities and intellectual property
assets, and an increase in stock-based compensation.
- As of June 30, 2024, Know Labs had cash and cash equivalents of
$2.13 million dollars, as compared to $8.02 million dollars at the
end of September 30, 2023. Net cash used in operations for the
first nine months of FY 2024 was $9.57 million dollars compared
with $8.98 million dollars in the same nine-month period of FY
2023.
- The Company is undertaking initiatives to significantly reduce
fixed expenses and monthly burn rate. Subsequent to the end of Q3
FY 2024, on August 9, 2024, Know Labs closed a firm commitment
underwritten public offering of $3.45 million dollars; which with
the cash on hand, the Company believes that it has enough available
cash and flexibility with its operating expenses to operate until
at least December 31, 2024.
- As noted in the Q3 FY 2024 10-Q, the Company plans to seek
additional funding under the effective S-3 shelf registration
statement to ensure operations well into 2025.
- Shareholder equity for Q3 FY 2024 was a negative $4.60 million
dollars versus $3.74 million dollars in FY 2023, ending September
30, 2023. The Company is actively taking steps to address its
negative shareholder equity through the conversion of convertible
debt to equity.
As previously disclosed in its annual report on Form 10-K for
the fiscal year ended September 30, 2023, which was filed with the
Securities and Exchange Commission on December 19, 2023, the audit
opinion contained a going concern qualification from the Company's
independent registered public accounting firm. This announcement is
being made solely to comply with the New York Stock Exchange's
Company Guide Sections 401(h) and 610(b), which require separate
disclosure of receipt of an audit opinion that contains a going
concern qualification. This announcement does not represent any
change or amendment to the Company's 2023 audited financial
statements or to its 2023 annual report on Form 10-K.
Conference Call:
Know Labs will host an audio webcast to discuss its results and
provide a business update today, August 14, 2024, at 4:30 pm ET
(1:30 pm PT). The live webcast will be available on the Investors
page of the Company’s website, https://ir.knowlabs.co/, and a
replay will be available for six months.
Participant Dial-In: 877-514-3621 / +1 215-268-9856
Webcast:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=bN3zHkNr
A copy of the form 10-Q filed with the SEC can also be
downloaded from the Company’s website.
Income Statement:
Three Months Ended, Nine Months Ended, June 30, 2024 June 30, 2023
June 30, 2024 June 30, 2023 OPERATING EXPENSES- RESEARCH AND
DEVELOPMENT EXPENSES
$
1,348,985
$
1,879,519
$
5,010,618
$
6,186,039
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
2,486,846
1,359,782
7,025,503
5,507,511
Total operating expenses
3,835,831
3,239,301
12,036,121
11,693,550
OPERATING LOSS
(3,835,831)
(3,239,301)
(12,036,121)
(11,693,550)
OTHER INCOME (EXPENSE), NET Interest income
30,619
23,511
126,872
114,325
Interest expense
(298,248)
-
(1,038,499)
(389,626)
Other (expense)
-
(384,137)
-
(384,137)
Total other expense, net
(267,629)
(360,626)
(911,627)
(659,438)
LOSS BEFORE INCOME TAXES
(4,103,460)
(3,599,927)
(12,947,748)
(12,352,988)
Income tax expense
-
-
-
-
NET LOSS
(4,103,460)
(3,599,927)
(12,947,748)
(12,352,988)
Deemed dividends on Series C and D Preferred Stock
(100,045)
(3,337,494)
(262,283)
(3,337,494)
Common stock dividends on Series D Preferred Stock
-
(1,627,230)
-
(1,627,230)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
(4,203,505)
$
(8,564,651)
$
(13,210,031)
$
(17,317,712)
Basic and diluted loss per share
$
(0.05)
$
(0.18)
$
(0.16)
$
(0.36)
Weighted average shares of common stock outstanding- basic
and diluted
83,038,866
48,928,911
82,314,925
48,604,274
Balance Sheet:
June 30, 2024 September 30, 2023 (1)
ASSETS (Unaudited)
CURRENT ASSETS: Cash and cash equivalents
$
2,129,954
$
8,023,716
Total current assets
2,129,954
8,023,716
PROPERTY AND EQUIPMENT, NET
88,668
81,325
OTHER ASSETS Other assets
159,244
15,766
Operating lease right-of-use asset
364,342
145,090
TOTAL ASSETS
$
2,742,208
$
8,265,897
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
CURRENT LIABILITIES: Accounts payable - trade
$
1,255,888
$
1,292,861
Accrued expenses
116,666
94,062
Accrued expenses - related parties
99,692
218,334
Current portion of convertible notes payable, net
4,539,818
2,761,931
Current portion of operating lease right-of-use liability
105,653
154,797
Total current liabilities
6,117,717
4,521,985
NON-CURRENT LIABILITIES: Operating lease liability, net of
current portion
280,714
-
Non-current portion of convertible notes payable, net
945,258
-
Total liabilities
7,343,689
4,521,985
COMMITMENTS AND CONTINGENCIES (Note 11) STOCKHOLDERS’
(DEFICIT) EQUITY Preferred stock - $0.001 par value,
5,000,000 shares authorized, Series C and D shares issued and
outstanding as follows: Series C Convertible Preferred stock
$0.001 par value, 30,000 shares authorized, 17,858 shares issued
and outstanding at 6/30/2024 and 9/30/2023, respectively
1,790
1,790
Series D Convertible Preferred stock $0.001 par value, 20,000
shares authorized, 10,161 shares issued and outstanding at
6/30/2024 and 9/30/2023, respectively
1,015
1,015
Common stock - $0.001 par value, 200,000,000 shares authorized,
86,368,897 and 80,358,463 shares issued and outstanding at
6/30/2024 and 9/30/2023, respectively
86,369
80,358
Additional paid in capital
130,360,164
125,501,537
Accumulated deficit
(135,050,819)
(121,840,788)
Total stockholders' (deficit) equity
(4,601,481)
3,743,912
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
$
2,742,208
$
8,265,897
Cash Flow:
Nine Months Ended, June 30, 2024 June 30, 2023 CASH FLOWS FROM
OPERATING ACTIVITIES: Net loss
$
(12,947,748)
$
(12,352,988)
Adjustments to reconcile net loss to net cash (used in) operating
activities Depreciation and amortization
59,009
259,541
Stock based compensation - stock option grants
2,331,516
2,464,045
Issuance of common stock for services
277,010
-
Loss on disposal of assets
-
384,137
Amortization of operating lease right-of-use asset
162,647
96,161
Amortization of debt issuance costs
375,859
-
Interest expense for extension of notes and warrants
594,761
349,721
Changes in operating assets and liabilities: Other long-term assets
(143,478)
(1,999)
Operating lease right-of-use liability
(150,329)
(99,803)
Accounts payable - trade and accrued expenses
(133,011)
(74,866)
NET CASH (USED IN) OPERATING ACTIVITIES
(9,573,764)
(8,976,051)
CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of research
and development equipment
(66,352)
(80,798)
NET CASH (USED IN) INVESTING ACTIVITIES:
(66,352)
(80,798)
CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt
offering
3,805,699
-
Proceeds from issuance of common stock offering, net
203,105
-
Payments for debt offering
(262,450)
-
Proceeds from issuance of common stock for stock options exercise
-
4,687
Proceeds from issuance of common stock for warrant exercise
-
387,335
NET CASH PROVIDED BY FINANCING ACTIVITIES
3,746,354
392,022
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
(5,893,762)
(8,664,827)
CASH AND CASH EQUIVALENTS, beginning of period
8,023,716
12,593,692
CASH AND CASH EQUIVALENTS, end of period
$
2,129,954
$
3,928,865
Supplemental disclosure of non-cash financing activity:
Deemed dividends on Series C and D Preferred Stock
$
262,283
$
3,337,494
Common stock dividends on Series D Preferred Stock
$
-
$
1,627,230
Warrants issued for debt offering
$
1,536,743
$
-
Common stock issued for debt payment
$
240,000
$
-
About Know Labs, Inc.
Know Labs, Inc. is a public company whose shares trade on the
NYSE American Exchange under the stock symbol “KNW.” The Company’s
platform technology uses spectroscopy to direct electromagnetic
energy through a substance or material to capture a unique
molecular signature. The technology can be integrated into a
variety of wearable, mobile or bench-top form factors. This
patented and patent-pending technology makes it possible to
effectively identify and monitor analytes that could only
previously be performed by invasive and/or expensive and
time-consuming lab-based tests. The first application of the
technology will be in a product marketed as a non-invasive glucose
monitor. The device will provide the user with accessible and
affordable real-time information on blood glucose levels. This
product will require U.S. Food and Drug Administration clearance
prior to its introduction to the market.
Safe Harbor Statement
This release contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements appear in a number of places in this
release and include all statements that are not statements of
historical fact regarding the intent, belief or current
expectations of Know Labs, Inc., its directors or its officers with
respect to, among other things: (i) financing plans; (ii) trends
affecting its financial condition or results of operations; (iii)
growth strategy and operating strategy; and (iv) performance of
products. You can identify these statements by the use of the words
“may,” “will,” “could,” “should,” “would,” “plans,” “expects,”
“anticipates,” “continue,” “estimate,” “project,” “intend,”
“likely,” “forecast,” “probable,” “potential,” and similar
expressions and variations thereof are intended to identify
forward-looking statements. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, many of which are beyond Know
Labs, Inc.’s ability to control, and actual results may differ
materially from those projected in the forward-looking statements
as a result of various factors. These risks and uncertainties also
include such additional risk factors as are discussed in the
Company’s filings with the U.S. Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
September 30, 2023, Forms 10-Q and 8-K, and in other filings we
make with the Securities and Exchange Commission from time to time.
These documents are available on the SEC Filings section of the
Investor Relations section of our website at www.knowlabs.co. The
Company cautions readers not to place undue reliance upon any such
forward-looking statements, which speak only as of the date made.
The Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on
which such statement is made.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240814552248/en/
For Know Labs Media Inquiries Contact: Matter Health Abby
Mayo Knowlabs@matternow.com Ph. (617) 272-0592 Know Labs, Inc.
Contact: Jess English jess@knowlabs.co Ph. (206) 629-6414
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