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Know Labs, Inc. reports second quarter FY 2024 results

Know Labs, Inc. reported financial results for the second quarter of the fiscal year 2024 ended March 31, 2024.

Financial highlights:

  • In Q2 FY 2024, Know Labs reported an operating loss of $4.73 million dollars, compared to an operating loss of $4.81 million dollars in Q2 FY 2023, a reduction in operating loss of 1.7%. This translates to Earnings Per Share of a loss of $0.07, better than the prior year quarter Earnings Per Share Loss of $0.10, an improvement of 30%, before preferred stock dividends.
  • Recorded a non-cash charge to earnings of $976,000 principally related to stock-based compensation of $617,000 and issuance of common stock for services of $251,000.
  • Research and development expense for Q2 FY 2024 was $2.18 million dollars as compared to $2.56 million dollars in Q2 FY 2023, a decrease of 15.1% year over year. The decrease in R&D expense was related to decreased personnel and the use of external consultants to reduce the cost of product development.
  • Selling, general and administrative expenses for Q2 FY 2024 was $2.55 million, which was higher by $308,000 than the $2.24 million dollars in the year ago period, an increase of 13.7%, reflecting key hires made in the quarter, as well as an increase in legal expenses related to IP and financing activities.
  • As of March 31, 2024, Know Labs had cash and cash equivalents of $4.71 million dollars, as compared to $8.02 million at the end of September 30, 2023. Net cash used in operations for the first six months of FY 2024 was $7.05 million dollars compared with $6.34 million in the six-month period of FY 2023.
  • During the year ended September 30, 2023, the Company made adjustments to its fixed expenses and the impact of those adjustments has significantly reduced the 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 October 31, 2024. As stated in its Q1 FY 2024 10-Q, the Company expects to raise additional funds through the issuance of equity, preferred stock, and convertible debentures. To that end, on March 20, 2024, the Company entered into an At the Market Offering Agreement with The Benchmark Company, LLC pursuant to which the Company may, from time to time, offer and sell shares of its common stock through or to The Benchmark Company, LLC as its sales agent or manager in an aggregate amount of up to $5,000,000. In addition, the Company has an $18 million S-3 shelf registration statement which was subsequently declared effective on January 11, 2024 to facilitate liquidity needs.
  • Shareholder equity for Q2 FY 2024 was a negative $1.75 million versus $3.74 million in FY 2023, ending September 30, 2023. The Company is actively taking steps to address its negative shareholder equity through the conversion of convertible debt to equity, as well as new equity issuance as previously mentioned.

As previously disclosed in its annual report on Form 10-K for the fiscal year ended September 30, 2023, which was filed with the Securities and Exchange Commission on December 19, 2023, the audit opinion contained a going concern qualification from the Company’s independent registered public accounting firm. This announcement is being made solely to comply with the New York Stock Exchange’s Company Guide Sections 401(h) and 610(b), which require separate disclosure of receipt of an audit opinion that contains a going concern qualification. This announcement does not represent any change or amendment to the Company’s 2023 audited financial statements or to its 2023 annual report on Form 10-K.
MB Bureau

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