Know Labs, Inc. (NYSE American: KNW), an emerging developer of
non-invasive medical diagnostic technology, today reported
financial results for the third quarter ended June 30, 2023.
Financial Highlights:
- Know Labs reported a net loss of $3.59 million dollars in the
third quarter of 2023, compared to a net loss of $3.03 million
dollars in the year-ago period, which translates to Earnings Per
Share of a loss of $0.07, unchanged from the year ago period of a
loss of $0.07 before preferred stock dividends.
- Recorded a non-cash charge to earnings of $4.96 million related
to the fair market value of dividends on the Company’s Series C and
D preferred stock, that were either paid or accrued in shares of
common stock in the quarter.
- Research and development expense for the third quarter was
$1.87 million dollars as compared to $1.27 million dollars in 2022.
The increase in R&D expense was related to increases in
engineering, third-party technical services, and expenditures
related to the development of our Generation 1 device, which we
completed and announced on June 7th, as we continue to execute our
path to FDA clinical trials and commercialization.
- Selling, general and administrative expenses for the third
quarter was $1.35 million, which was sequentially lower by $890,000
than the $2.24 million dollars in the second quarter, as well as
lower than the year ago period of $1.58 million, as we continue our
initiatives to reduce our cash burn.
- As of June 30, 2023, we had cash and cash equivalents of $3.93
million dollars, as compared to $12.59 million at the end of
September 30, 2022. Net cash used in operations for the nine-month
period ending June 30, 2023 was $8.97 million dollars compared with
$3.69 million in the prior year.
- During the quarter that ended June 30, 2023, the Company made
adjustments to its fixed expenses and the impact of those
adjustments has significantly reduced our monthly burn rate. Given
the significant reduction in fixed expenses, the Company believes
that it has enough available cash and flexibility with its
operating expenses to operate until at least December 2023. As we
have stated in our Third Quarter 10-Q, during 2023, we expect to
raise additional funds through the issuance of preferred stock,
convertible debentures, and equity.
- Shareholder equity for the third quarter 2023 was $0.72 million
versus $9.9 million as of September 30, 2022.
Income Statement:
Three Months Ended, Nine Months Ended, June 30, 2023 June 30, 2022
June 30, 2023 June 30, 2022 REVENUE- DIGITAL ASSET SALES $
-
$
-
$
-
$
4,360,087
OPERATING EXPENSES- RESEARCH AND DEVELOPMENT EXPENSES
1,879,519
1,272,537
6,186,039
3,406,996
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
1,359,782
1,588,823
5,507,511
4,253,997
SELLING AND TRANSACTIONAL COSTS FOR DIGITAL ASSETS
-
164,093
-
3,436,955
Total operating expenses
3,239,301
3,025,453
11,693,550
11,097,948
OPERATING LOSS
(3,239,301
)
(3,025,453
)
(11,693,550
)
(6,737,861
)
OTHER (EXPENSE): Interest income (expense), net
23,511
(239,760
)
(275,301
)
(8,024,709
)
Other (expense) income
(384,137
)
261,927
(384,137
)
261,927
Total other (expense), net
(360,626
)
22,167
(659,438
)
(7,762,782
)
LOSS BEFORE INCOME TAXES
(3,599,927
)
(3,003,286
)
(12,352,988
)
(14,500,643
)
Income tax expense
-
-
-
-
NET LOSS
(3,599,927
)
(3,003,286
)
(12,352,988
)
(14,500,643
)
Common stock dividends on Series D Preferred Stock
(1,627,230
)
-
(1,627,230
)
-
Deemed dividends on Series C and D Preferred Stock
(3,337,494
)
-
(3,337,494
)
-
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $
(8,564,651
)
$
(3,003,286
)
$
(17,317,712
)
$
(14,500,643
)
Basic and diluted loss per share $
(0.18
)
$
(0.07
)
$
(0.36
)
$
(0.37
)
Weighted average shares of common stock outstanding- basic
and diluted
48,928,911
43,760,904
48,604,274
39,032,860
Balance Sheet:
June 30, 2023 September 30, 2022 (1)
ASSETS Unaudited
CURRENT ASSETS: Cash and cash equivalents $
3,928,865
$
12,593,692
Total current assets
3,928,865
12,593,692
PROPERTY AND EQUIPMENT, NET
300,097
862,977
OTHER ASSETS Other assets
15,766
13,767
Operating lease right of use asset
191,769
287,930
TOTAL ASSETS $
4,436,497
$
13,758,366
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable - trade $
526,688
$
526,968
Accrued expenses
416,191
462,940
Accrued expenses - related parties
320,427
348,264
Convertible notes payable, net
2,255,066
2,255,066
Current portion of operating lease right of use liability
202,712
215,397
Total current liabilities
3,721,084
3,808,635
NON-CURRENT LIABILITIES: Operating lease right of use
liability, net of current portion
-
87,118
Total non-current liabilities
-
87,118
COMMITMENTS AND CONTINGENCIES (Note 12)
-
-
STOCKHOLDERS' 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, 1,785,715 shares authorized, 1,785,715 shares issued and
outstanding at 6/30/2023 and 9/30/2022, respectively
1,790
1,790
Series D Convertible Preferred stock $0.001 par value, 1,016,014
shares authorized, 1,016,004 shares issued and outstanding at
6/30/2023 and 9/30/2022, respectively
1,015
1,015
Common stock - $0.001 par value, 200,000,000 shares authorized,
52,358,463 and 48,156,062 shares issued and outstanding at
6/30/2023 and 9/30/2022, respectively
52,358
48,158
Additional paid in capital
119,375,700
111,209,388
Accumulated deficit
(118,715,450
)
(101,397,738
)
Total stockholders' equity
715,413
9,862,613
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $
4,436,497
$
13,758,366
(1) Derived from audited consolidated balance sheet.
-
-
Cash Flow:
Nine Months Ended, June 30, 2023 June 30, 2022 CASH FLOWS
FROM OPERATING ACTIVITIES: Net loss $
(12,352,988
)
$
(14,500,643
)
Adjustments to reconcile net loss to net cash (used in) operating
activities Depreciation and amortization
259,541
218,683
Issuance of common stock for services
-
153,000
Issuance of common stock warrants for services
-
71,220
Loss on disposal of assets
384,137
-
Modification of notes and warrants - interest expense
349,721
244,260
Stock based compensation- stock option grants
2,464,045
1,555,875
Right of use, net
(3,642
)
(20,705
)
Gain on forgiveness of notes payable-PPP Loans
-
(252,700
)
Amortization of debt discount to interest expense
-
7,272,911
Changes in operating assets and liabilities: Other long-term assets
(1,999
)
-
Accounts receivable-related party
-
(46,146
)
Accounts payable - trade and accrued expenses
(74,866
)
1,612,959
NET CASH (USED IN) OPERATING ACTIVITIES
(8,976,051
)
(3,691,286
)
CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property
and equipment
(80,798
)
(843,557
)
NET CASH (USED IN) INVESTING ACTIVITIES:
(80,798
)
(843,557
)
CASH FLOWS FROM FINANCING ACTIVITIES: Settlement of notes
payable-PPP loans
-
(179,103
)
Proceeds from issuance of common stock for stock options exercise
4,687
13,687
Proceeds from issuance of common stock for warrant exercise
387,335
793,986
NET CASH PROVIDED BY FINANCING ACTIVITIES
392,022
628,570
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
(8,664,827
)
(3,906,273
)
CASH AND CASH EQUIVALENTS, beginning of period
12,593,692
12,258,218
CASH AND CASH EQUIVALENTS, end of period $
3,928,865
$
8,351,945
Conference Call:
Know Labs will host an audio webcast to discuss its results and
provide a business update today, August 14, 2023, at 4:30 pm ET
(1:30 pm PT). The live webcast will be available on the Investors
page of the Company’s website, www.knowlabs.co/investors, 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=QDtTlLZk
A copy of the form 10-Q filed with the SEC can also be
downloaded from the Company’s website.
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
technology uses spectroscopy to direct electromagnetic energy
through a substance or material to capture a unique molecular
signature. The Company refers to its technology as Bio-RFID™. The
Bio-RFID 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 our Bio-RFID 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, 2022, 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230814286015/en/
For Know Labs Media Inquiries Contact: Matter Health
Laura Bastardi Knowlabs@matternow.com Ph. (603) 494-6667 Know
Labs, Inc. Contact: Jordyn Hujar jordyn@knowlabs.co Ph. (206)
629-6414
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