Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Completion of the Generation 1 prototype device for non-invasive glucose monitoring and subsequent miniaturization to the KnowU, which is 85% smaller and capable of 24-hour wearable data collection.
- Successful clinical trials with significant data collection and presentation at major conferences, achieving a mean absolute relative difference (MARD) as low as 10.8%.
- Expansion of intellectual property portfolio with over 330 patents issued, pending, and in process, and the creation of the Know Labs Skunkworks for IP monetization.
- Strategic collaborations and increased exposure through participation in various industry advisory boards and conferences, enhancing the company's visibility and potential for partnerships.
- Improvement in earnings per share loss from $0.07 to $0.05 year-over-year, indicating better financial management despite increased net loss.
Negative Points
- Net loss increased by 13.9% year-over-year, from $3.6 million in Q3 fiscal 2023 to $4.1 million in Q3 fiscal 2024.
- Significant decrease in cash and cash equivalents from $8.02 million at the end of September 30, 2023, to $2.13 million at June 30, 2024.
- Increase in selling, general, and administrative expenses by $1.1 million year-over-year, primarily due to higher salaries, legal expenses, and stock-based compensation.
- Shareholder equity turned negative, from $3.74 million in fiscal year 2023 to negative $4.6 million in Q3 fiscal year 2024.
- Dependence on additional funding to ensure operations into 2025, highlighting ongoing financial challenges and the need for further capital raises.
Q & A Highlights
Q: Can you provide an update on the development and testing of the KnowU device?
A: Ronald Erickson, CEO: The KnowU is a wearable, non-invasive continuous glucose monitoring device that is 85% smaller than our Generation 1 prototype. We have been using it to accelerate data collection and determine its performance in various conditions. We are preparing for further miniaturization and adjustments based on clinical trials and human factors testing.
Q: What were the key findings from your recent clinical trials?
A: Ronald Erickson, CEO: We achieved a mean absolute relative difference (MARD) of 11.8% in our internal trial with over 30 participants. Results were presented at several conferences, including the American Diabetes Association and the American Association of Clinical Endocrinology, with MARDs ranging from 10.8% to 11.1%. These trials used venous blood as a comparative reference, the gold standard expected by the FDA.
Q: How is Know Labs leveraging its intellectual property?
A: Ronald Erickson, CEO: We have over 330 patents issued, pending, and in process. We are also focusing on trade secrets, having codified over 600. Additionally, we created the Know Labs Skunkworks to pursue IP monetization and a global patent licensing program, aiming to drive revenue from non-core fields of use.
Q: Can you elaborate on the financial performance for Q3 fiscal 2024?
A: Peter Conley, CFO: We reported a net loss of $4.1 million, an increase of 13.9% year-over-year. However, our earnings per share loss improved by 29% to $0.05. Research and development expenses decreased by 28.2%, while selling, general, and administrative expenses increased due to key hires and legal expenses.
Q: What are the company's plans for future funding?
A: Peter Conley, CFO: We recently closed a public offering of $3.445 million and believe we have enough cash to operate until at least December 31, 2024. We plan to seek additional funding under our effective S-3 shelf registration to ensure operations well into 2025.
Q: How is Know Labs planning to commercialize the KnowU device?
A: Ronald Erickson, CEO: We are focused on obtaining FDA approval for the KnowU. We are also exploring strategic collaborations with major players and leveraging our intellectual property assets to achieve faster monetization.
Q: What steps is the company taking to maximize shareholder value?
A: Ronald Erickson, CEO: We expanded our medical and scientific advisory board and board of directors. We joined industry advisory boards and presented at multiple investor and sector-focused conferences. We are also focusing on strategic collaborations and IP monetization.
Q: What are the goals for algorithm development in 2024?
A: Ronald Erickson, CEO: We aim to build personalized models for each user following a calibration period, leading to an accurate glucose value estimate. We are also working on a generalized algorithm and testing new approaches like device calibration.
Q: How is the company addressing its shareholder equity?
A: Peter Conley, CFO: We are actively taking steps to address shareholder equity, including the conversion of debt to equity. Our recent public offering and planned additional funding will also help improve our financial position.
Q: What are the next steps for clinical testing?
A: Ronald Erickson, CEO: We plan to enroll a more diversified population, including people with Type 1 diabetes, to collect data in very low and high glycemic ranges. This will help us meet FDA requirements and improve our algorithm's accuracy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
