Know Labs Provides Overview of FY2024 10-K Annual Report

Rhea-AI Summary

Know Labs (NYSE American: KNW) released its FY2024 10-K annual report, addressing shareholder concerns about its going concern audit opinion. The company reported a $16 million net loss, including $5 million in non-cash charges. Key achievements include: development of 2nd generation KnowU™ CGM, completion of companion mobile app, filing of 68 new patents (total 332 active patents), and clinical studies showing 93% accuracy in glycemic level determination. The company reduced monthly cash burn by 42% to $700,000 and initiated strategic projects including a Smart Steering Wheel initiative. Management expressed confidence in accessing capital through their effective S-3 shelf offering to continue operations.

Positive

• Significant reduction in cash burn by 42% from $1.2M to $700K monthly
• Clinical studies demonstrated 93% accuracy in glycemic level determination
• Expanded patent portfolio with 68 new filings, reaching 332 active patents
• Completed 2nd generation KnowU™ CGM development in 8 months
• Established strategic initiatives including Smart Steering Wheel project with automotive industry potential

Negative

• Reported $16M net loss for FY2024
• Received going concern audit opinion due to insufficient funds for next 12 months
• Cash used in operations was $12.8M
• May need to raise additional capital through S-3 shelf offering, potentially diluting shareholders

Insights

Financial Analyst

The FY2024 results reveal significant financial challenges with a $16 million net loss and a going concern warning, though $5 million was non-cash charges. The $12.8 million operational cash burn, while substantial for a $23.2 million market cap company, funded important R&D developments. The 42% reduction in monthly cash burn to $700,000 is positive, but still requires approximately $8.4 million annually.

The effective S-3 shelf offering provides a funding pathway, but will likely lead to dilution. While technological progress is evident, the company's financial sustainability depends on either securing strategic partnerships or raising additional capital. The automotive sector initiative could provide new revenue streams, but timelines remain uncertain.

Medical Research Analyst

The development of the 2nd generation KnowU™ CGM in 8 months, coupled with 93% accuracy in clinical studies and an impressive 11% MARD, demonstrates significant technical progress. The extensive patent portfolio of 332 assets positions Know Labs strongly in the non-invasive glucose monitoring space.

The expansion into automotive applications through steering wheel integration represents an innovative pivot, leveraging their core technology for driver health monitoring. However, the path to FDA approval for the CGM device remains unclear and competition in this space is intense. The NDAs with major companies suggest industry interest but don't guarantee commercial success.

The Company Responds to Shareholder Concerns and Reiterates Progress and Future Plans

SEATTLE--(BUSINESS WIRE)-- Know Labs, Inc. (NYSE American: KNW), a leading developer of non-invasive diagnostics technology released this morning an overview of its Form 10-K annual report for its fiscal year ending September 30, 2024, and provided reassurance regarding its progress over the past year, its plans and the state of its financial stability in light of its auditor required going concern opinion.

Know Labs (the “Company”) issued a press release on November 15, 2024, regarding the receipt of an audit opinion with a going concern explanation from its independent registered public accounting firm. The filing of that press release is a requirement of the NYSE American Exchange, pursuant to its Company Guide Section 610(b), which requires public announcement of the receipt of an audit opinion containing a going concern paragraph. This announcement does not represent any change or amendment to the Company’s financial statements or to its annual report on Form 10-K for the year ended September 30, 2024. The going concern explanation states that the Company did not have enough funds on its year-end balance sheet on September 30, 2024, for operations during the next twelve months. Know Labs has received audit opinions with a going concern explanation in previous quarter-end and annual filings.

Management feels confident in its ability to access capital and continue operations as they execute the Company’s plans and strategic initiatives. The Company emphasized that it has available a previously filed and effective S-3 shelf offering which provides ready access to capital and allows the Company to raise that capital without a new filing with the SEC.

Regarding the 10-K filing, the Company reported a net loss of $16 million for FY2024, however $5 million of that was non-cash charge to earnings due to GAAP mandated derivative accounting for options and warrants.

For FY2024, cash used in operations was $12.8 million -- of that $6.1 million was spent in R&D, resulting in:

• Development and completion of the 2^nd generation KnowU™ wearable continuous glucose monitor (CGM) in a record 8 months (a product program which typically takes much longer).
• Development and completion of companion mobile app with a world class tier one app developer for major medical device companies.
• Filing and prosecution of 68 new patent filings, resulting in a total of 332 active patent assets – establishing Know Labs as the global leader in non-invasive glucose monitoring IP.
• Publication in leading peer-reviewed publications of 3 clinical studies demonstrating 93% accuracy in determining glycemic levels.
• March 2024 presentation at ATTD, the world’s largest diabetes tech conference, in Florence, Italy of an 11% MARD in a mixed cohort (N=130 hypo/normal/hyperglycemic).
• Establishment of a Skunkworks project in May 2024 to monetize our patent portfolio through strategic joint venture and patent licensing.
• Announcement in October 2024 of Know Labs’ Smart Steering Wheel project and engagement of the Stanbridge Group, a leading automotive consulting company, to establish strategic joint ventures with leading automakers and OEMs in the automotive supply chain to engage in R&D around implanting Know Labs’ sensor in steering wheels and other places in automobiles. There is growing interest among automotive OEMs in medical IOT sensors to monitor driver health & wellness, and physiology.
• We are under NDA with several major companies to develop strategic joint-venture partnerships around clinical collaboration, technology, and product development.
• Significant -42% reduction in cash burn from $1.2 million per month to $700,000 per month, as Gen 2 hardware and mobile app are complete, and new patent filings have leveled off with Know Labs commanding an industry leading IP position.
• Added a new Chief Science Officer and a new interim Chief Technology Officer with significant research, development and strategic experience.

For more information on Know Labs, visit www.knowlabs.co and for an easy to follow overview of the Company, its technology and strategic direction please take a look at the latest presentation which can be found at this link.

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 is designed to able to integrate into a variety of wearable, mobile or bench-top form factors. The Company believes that 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 Company’s first expected application of the technology will be in a product marketed as a non-invasive glucose monitor. The device is designed to 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, 2024, 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/20241118576461/en/

Know Labs, Inc. Contact:

Jordyn Hujar

jordyn@knowlabs.co

Ph. (206) 629-6414

Source: Know Labs, Inc.

FAQ

What was Know Labs (KNW) net loss for fiscal year 2024?

Know Labs reported a net loss of $16 million for FY2024, with $5 million being non-cash charges due to GAAP mandated derivative accounting for options and warrants.

How much did Know Labs (KNW) reduce its monthly cash burn in FY2024?

Know Labs achieved a 42% reduction in monthly cash burn, decreasing from $1.2 million to $700,000 per month.

What accuracy rate did Know Labs (KNW) achieve in its glycemic level clinical studies?

Know Labs' clinical studies demonstrated 93% accuracy in determining glycemic levels, with an 11% MARD in a mixed cohort study presented at ATTD conference.

How many active patents does Know Labs (KNW) currently hold?

Know Labs holds 332 active patent assets, following the filing of 68 new patents in FY2024, positioning them as a global leader in non-invasive glucose monitoring IP.