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

20 Dec 2022
www.biospace.com
Financial Statement
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, , and a replay will be available for six months. Participant Dial-In: 877-514-3621 / +1 215-268-9856 Webcast: 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 . 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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