Know Labs, Inc. Reports Fourth Quarter and Fiscal Year 2022 Results

Know Labs, Inc. Reports Fourth Quarter and Fiscal Year 2022 Results




Know Labs, Inc. Reports Fourth Quarter and Fiscal Year 2022 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 quarter and fiscal year ended September 30, 2022.

Financial Highlights:

  • Consolidated revenues were $4.360 million for the fiscal year ended September 30, 2022.
  • Research and development expense was $5.386 million for the fiscal year ended September 30, 2022 as compared to $3.970 million in 2021. The increase in R&D was related to staff increases in engineering, third party technical services, and expenditures related to the development of the Company’s Bio-RFID technology, as the Company continues to execute its path to FDA clinical trials and commercialization.
  • Non-GAAP net loss as adjusted for the fiscal year was $7.929 million, a slight increase of $270,000 compared to the prior year. 2022 GAAP EPS was a loss of $0.50 per share as compared to a loss of $0.86 per share during 2021.
  • Current assets for the fiscal year stood at $12.594 million versus current liabilities of $3.810 million, for a current ratio of 3.61 in 2022 versus a current ratio of 1.17 in 2021.
  • As of September 30, 2022, cash and cash equivalents equaled $12.594 million, as compared with $12.258 million in 2021. Net cash used in operations for the 2022 fiscal year was $6.920 million, as compared to $6.851 million in 2021. We believe our cash on hand will be sufficient to fund our operations through December 31, 2023.
  • Shareholder equity was $9.862 million as of September 30, 2022, compared to $1.242 million in 2021.

Income Statement:

KNOW LABS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
Years Ended,
September 30, 2022 September 30, 2021
 
REVENUE- DIGITAL ASSET SALES

$

4,360,087

 

$

 

OPERATING EXPENSES-
RESEARCH AND DEVELOPMENT EXPENSES

5,385,586

 

3,969,972

 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

8,118,137

 

6,476,176

 

SELLING AND TRANSACTIONAL COSTS FOR DIGITAL ASSETS

3,430,438

 

 

Total operating expenses

16,934,161

 

10,446,148

 

OPERATING LOSS

(12,574,074

)

(10,446,148

)

 
OTHER INCOME (EXPENSE):
Interest expense

(8,018,798

)

(14,914,065

)

Other income

521,628

 

 

Total other (expense), net

(7,497,170

)

(14,914,065

)

 
LOSS BEFORE INCOME TAXES

(20,071,244

)

(25,360,213

)

 
Income tax expense

 

 

 
NET LOSS

$

(20,071,244

)

$

(25,360,213

)

 
Basic and diluted loss per share

$

(0.50

)

$

(0.86

)

 
Weighted average shares of common stock outstanding- basic and diluted

40,370,473

 

29,370,596

 

Balance Sheet:

KNOW LABS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
September 30, 2022 September 30, 2021
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents

$

12,593,692

 

$

12,258,218

 

Total current assets

12,593,692

 

12,258,218

 

 
PROPERTY AND EQUIPMENT, NET

862,977

 

328,504

 

 
OTHER ASSETS
Other assets

13,767

 

13,767

 

Operating lease right of use asset

287,930

 

289,002

 

 
TOTAL ASSETS

$

13,758,366

 

$

12,889,491

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
CURRENT LIABILITIES:
Accounts payable – trade

$

526,968

 

$

419,093

 

Accrued expenses

462,940

 

893,137

 

Accrued expenses – related parties

348,264

 

421,599

 

Convertible notes payable, net

2,255,066

 

9,191,155

 

Current portion of operating lease right of use liability

215,397

 

112,371

 

Total current liabilities

3,808,635

 

11,037,355

 

 
NON-CURRENT LIABILITIES:
Notes payable- PPP loans

 

431,803

 

Operating lease right of use liability, net of current portion

87,118

 

178,170

 

Total non-current liabilities

87,118

 

609,973

 

 
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 9/30/2022 and 9/30/2021, 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 9/30/2022 and 9/30/2021, respectively

1,015

 

1,015

 

Common stock – $0.001 par value, 200,000,000 shares authorized, 48,156,062 and 35,166,551
shares issued and outstanding at 9/30/2022 and 9/30/2021, respectively

48,158

 

35,168

 

Additional paid in capital

111,209,388

 

82,530,684

 

Accumulated deficit

(101,397,738

)

(81,326,494

)

Total stockholders’ equity

9,862,613

 

1,242,163

 

 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

13,758,366

 

$

12,889,491

 

Cash Flow:

KNOWLABS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Years Ended,
September 30, 2022 September 30, 2021
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss

$

(20,071,244

)

$

(25,360,213

)

Adjustments to reconcile net loss to net cash (used in) operating activities
 
Depreciation and amortization

320,995

 

200,807

 

Issuance of common stock for services

183,000

 

202,820

 

Issuance of common stock warrants for services

451,487

 

2,547,436

 

Gain on debt settlement

(268,872

)

 

Stock based compensation- stock option grants

4,421,634

 

1,028,522

 

Right of use, net

13,046

 

(1,493

)

Gain on forgiveness of notes payable – PPP loans

(252,700

)

 

Amortization of debt discount to interest expense

7,272,911

 

13,722,672

 

Changes in operating assets and liabilities:
Other long-term assets

 

11,413

 

Accounts payable – trade and accrued expenses

1,009,935

 

797,337

 

NET CASH (USED IN) OPERATING ACTIVITIES

(6,919,808

)

(6,850,699

)

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of research and development equipment

(855,468

)

(299,525

)

NET CASH (USED IN) INVESTING ACTIVITIES:

(855,468

)

(299,525

)

 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock for NYSE uplisting

8,280,000

 

 

Payments for stock issuance costs for NYSE uplisting

(855,321

)

Proceeds from convertible notes payable

 

14,209,000

 

Payments for issuance costs from notes payable

 

(727,117

)

Proceeds from Simple Agreements for Future Equity

 

340,000

 

Repayments on Simple Agreements for Future Equity

 

(253,800

)

Proceeds from note payable – PPP

 

205,633

 

Repayments of notes payable- PPP

(179,103

)

 

Proceeds from issuance of common stock for stock options exercise

26,687

 

23,344

 

Proceeds from issuance of common stock for warrant exercise

838,487

 

1,313,203

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

8,110,750

 

15,110,263

 

 
NET INCREASE IN CASH AND CASH EQUIVALENTS

335,474

 

7,960,039

 

 
CASH AND CASH EQUIVALENTS, beginning of period

12,258,218

 

4,298,179

 

 
CASH AND CASH EQUIVALENTS, end of period

$

12,593,692

 

$

12,258,218

 

 
Supplemental disclosures of cash flow information:
Interest paid

$

 

$

18,800

 

Taxes paid

$

 

$

 

 
Non-cash investing and financing activities:
Beneficial conversion feature

$

 

$

9,769,683

 

Issuance of warrants to debt holders

$

 

$

4,439,317

 

Issuance of warrants for services related to debt offering

$

 

$

1,667,281

 

Cashless warrant exercise (fair value)

$

 

$

515,975

 

Conversion of debt

$

14,209,000

 

$

5,638,275

 

Conversion of accrued interest

$

1,136,720

 

$

460,185

 

Issuance of shares and warrants for conversion of Simple Agreements for Future Equity

$

 

$

1,427,141

 

Conference Call:

Know Labs will host an audio webcast to discuss its results and provide a business update today, December 20, 2022, at 4:30pm 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=QSXwrYND

A copy of the form 10-K filed with the SEC can also be downloaded from the Company’s website. All holders, including stockholders and bondholders, can request and receive a hard copy of the complete audited financial statements free of charge. Requests must be submitted to ask@knowlabs.co.

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 Contact:
Linhart PR

Mallory West

mwest@linhartpr.com
Ph. (317) 439-3173

Know Labs, Inc. Contact:
Jordyn Hujar

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