Home Business Wire Know Labs, Inc. Reports Second Quarter FY2023 Results

Know Labs, Inc. Reports Second Quarter FY2023 Results

SEATTLE–(BUSINESS WIRE)–Know Labs, Inc. (NYSE American: KNW), an emerging developer of non-invasive medical diagnostic technology, today reported financial results for the second quarter ended March 31, 2023.

Financial Highlights:

  • Know Labs reported a net loss of $4.93 million dollars in the second quarter of 2023, compared to a net loss of $6.14 million dollars in the year-ago period, which translates to Earnings Per Share of a loss of $0.10, an improvement over the year ago period of a loss of $0.16.
  • Research and development expense for the second quarter was $2.56 million dollars as compared to $1.25 million dollars in 2022. The increase in R&D expense was related to staff increases in engineering, third party technical services and expenditures related to the development of our Bio-RFID technology and Generation 1 device, as we continue to execute our path to FDA clinical trials and commercialization.
  • Selling, general and administrative expense for the quarter was $2.24 million dollars versus $1.49 million in 2022, which increased versus the prior year primarily to due to key additions to the executive team and increases in third party services.
  • As of March 31, 2023, we had cash and cash equivalents of $6.27 million dollars, as compared to $12.59 million at the end of September 30, 2022. Net cash used in operations for the six months ended March 31, 2023 was $6.34 million dollars compared with $1.02 million in the prior year. During the quarter ended March 31, 2023, the Company made adjustments to its staffing and the impact of those adjustments will significantly reduce 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 February 2024.
  • Shareholder equity for the second quarter 2023 was $3.4 million versus $9.9 million as of September 30, 2022.

Income Statement:

Three Months Ended, Six Months Ended,
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
         
REVENUE- DIGITAL ASSET SALES

$

 

$

8,687

 

$

 

$

4,360,087

 

OPERATING EXPENSES-

 

 

 

 

 

 

 

 
RESEARCH AND DEVELOPMENT EXPENSES

 

2,563,469

 

 

1,248,707

 

 

4,306,520

 

 

2,134,459

 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

 

2,242,658

 

 

1,448,227

 

 

4,147,729

 

 

2,665,174

 

SELLING AND TRANSACTIONAL COSTS FOR DIGITAL ASSETS

 

 

 

154,502

 

 

 

 

3,272,862

 

Total operating expenses

 

4,806,127

 

 

2,851,436

 

 

8,454,249

 

 

8,072,495

 

OPERATING LOSS

 

(4,806,127

)

 

(2,842,749

)

 

(8,454,249

)

 

(3,712,408

)

 

 

 

 

 

 

 

 
OTHER (EXPENSE):

 

 

 

 

 

 

 

 
Interest expense, net

 

(124,075

)

 

(3,297,989

)

 

(298,812

)

 

(7,784,949

)

Total other (expense), net

 

(124,075

)

 

(3,297,989

)

 

(298,812

)

 

(7,784,949

)

 

 

 

 

 

 

 

 
LOSS BEFORE INCOME TAXES

 

(4,930,202

)

 

(6,140,738

)

 

(8,753,061

)

 

(11,497,357

)

 

 

 

 

 

 

 

 
Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
NET LOSS

$

(4,930,202

)

$

(6,140,738

)

$

(8,753,061

)

$

(11,497,357

)

 

 

 

 

 

 

 

 
Basic and diluted loss per share

$

(0.10

)

$

(0.16

)

$

(0.18

)

$

(0.31

)

 

 

 

 

 

 

 

 
Weighted average shares of common stock outstanding- basic and diluted

 

48,207,937

 

 

37,872,406

 

 

48,197,581

 

 

36,655,905

 

 

Balance Sheet:

March 31, 2023 September 30, 2022 (1)
ASSETS Unaudited   
     
CURRENT ASSETS:    
Cash and cash equivalents

$

6,226,029

 

$

12,593,692

 

Total current assets

 

6,226,029

 

 

12,593,692

 

 

 

 

 
PROPERTY AND EQUIPMENT, NET

 

699,740

 

 

862,977

 

 

 

 

 
OTHER ASSETS

 

 

 

 
Other assets

 

15,766

 

 

13,767

 

Operating lease right of use asset

 

198,318

 

 

287,930

 

 

 

 

 
TOTAL ASSETS

$

7,139,853

 

$

13,758,366

 

 

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 
CURRENT LIABILITIES:

 

 

 

 
Accounts payable – trade

$

516,204

 

$

526,968

 

Accrued expenses

 

434,321

 

 

462,940

 

Accrued expenses – related parties

 

322,714

 

 

348,264

 

Convertible notes payable, net

 

2,255,066

 

 

2,255,066

 

Current portion of operating lease right of use liability

 

206,101

 

 

215,397

 

Total current liabilities

 

3,734,406

 

 

3,808,635

 

 

 

 

 
NON-CURRENT LIABILITIES:

 

 

 

 
Operating lease right of use liability, net of current portion

 

4,144

 

 

87,118

 

Total non-current liabilities

 

4,144

 

 

87,118

 

 

 

 

 
COMMITMENTS AND CONTINGENCIES (Note 11)

 

 

 

 

 

 

 

 
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 3/31/2023 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 3/31/2023 and 9/30/2022, respectively

 

1,015

 

 

1,015

 

Common stock – $0.001 par value, 200,000,000 shares authorized, 48,207,937 and 48,156,062

 

 

 

 
shares issued and outstanding at 3/31/2023 and 9/30/2022, respectively

 

48,209

 

 

48,158

 

Additional paid in capital

 

113,501,088

 

 

111,209,388

 

Accumulated deficit

 

(110,150,799

)

 

(101,397,738

)

Total stockholders’ equity

 

3,401,303

 

 

9,862,613

 

 

 

 

 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

7,139,853

 

$

13,758,366

 

 

 

 

 
(1) Derived from audited consolidated balance sheet.

 

 

 

 

     

Cash Flow:

Six Months Ended,

 

March 31, 2023

 

March 31, 2022

     
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss

$

(8,753,061

)

 

$

(11,497,357

)

Adjustments to reconcile net loss to net cash (used in)

 

 

 

 

 

operating activities

 

 

 

 

 

Depreciation and amortization

 

205,094

 

 

 

118,068

 

Issuance of common stock for services

 

 

 

 

153,000

 

Issuance of common stock warrants for services

 

 

 

 

71,220

 

Stock based compensation- stock option grants

 

1,927,187

 

 

 

636,651

 

Right of use, net

 

(2,658

)

 

 

(11,203

)

Interest expense for extension of notes and warrants

 

349,721

 

 

 

 

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

 

 

 

 

(119,210

)

Accounts payable – trade and accrued expenses

 

(64,933

)

 

 

2,353,901

 

NET CASH (USED IN) OPERATING ACTIVITIES

 

(6,340,649

)

 

 

(1,022,019

)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Purchase of research and development equipment

 

(41,857

)

 

 

(826,956

)

NET CASH (USED IN) INVESTING ACTIVITIES:

 

(41,857

)

 

 

(826,956

)

 

 

 

 

 
CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 
Proceeds from issuance of common stock for stock options exercise

 

2,343

 

 

 

11,344

 

Proceeds from issuance of common stock for warrant exercise

 

12,500

 

 

 

766,486

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

14,843

 

 

 

777,830

 

 

 

 

 

 

NET (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(6,367,663

)

 

 

(1,071,145

)

 

 

 

 

 

CASH AND CASH EQUIVALENTS, beginning of period

 

12,593,692

 

 

 

12,258,218

 

 

 

 

 

 
CASH AND CASH EQUIVALENTS, end of period

$

6,226,029

 

 

$

11,187,073

 

 

 

 

 

 

Conference Call:

Know Labs will host an audio webcast to discuss its results and provide a business update today, May 15, 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=V4PBKLvm

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. It will provide the user with 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.

Contacts

For Know Labs Media Inquiries:
Matter Health

Laura Bastardi

Knowlabs@matternow.com
Ph. (603) 494-6667

Know Labs, Inc.:
Jordyn Hujar

jordyn@knowlabs.co
Ph. (206) 629-6414

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