Know Labs, Inc. (NYSE:KNW) Q4 2023 Earnings Call Transcript

Know Labs, Inc. (NYSE:KNW) Q4 2023 Earnings Call Transcript December 19, 2023

Know Labs, Inc. misses on earnings expectations. Reported EPS is $-0.04 EPS, expectations were $-0.01. KNW isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings. Welcome to the Know Labs Fourth Quarter Fiscal Year 2023 Earnings Conference Call. Please note, this conference call is being recorded. I will now turn the conference over to Jordyn Hujar, Know Labs’ Chief of Staff. You may begin.

Jordyn Hujar: Thank you. Thank you, everyone, for joining us for today’s conference call to review Know Labs fourth quarter and year end 2023 financial results and operating highlights. If you have not seen today’s financial results, press release and 10-K filings, please visit the Investors page on the company’s website at www.knowlabs.co. Before turning the call over to Ron Erickson, Know Labs’ Chairman and Chief Executive Officer, I would like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. Any statements that are not historical facts are forward-looking statements. We encourage you to review the company’s SEC filings, including, without limitation, the company’s Forms 10-K and 10-Qs, which identify specific risk factors that may cause actual results or events to differ materially from those described in these forward-looking statements.

These factors may include, without limitation, risks inherent in the development and/or commercialization of potential diagnostic products, uncertainty in the results of clinical trials or regulatory approvals, the need to obtain third-party reimbursement for patients’ use of any diagnostic products the company commercializes, our need and ability to obtain future capital and maintenance of IP rights, risks inherent in strategic transactions such as failure to realize anticipated benefits, legal, regulatory or political changes in the applicable jurisdictions, accounting and quality controls, greater than estimated allocations of resources to develop and commercialize technologies or failure to maintain any laboratory accreditation or FDA certification.

Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Know Labs expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise may be required under applicable law. Today’s call will be supported by a slide presentation, which will be shared through the webcast portal and can be downloaded from the Investors page on the company’s website. A Q&A session will follow this call. Your questions can be submitted through the webcast portal, which can be accessed through our website. We will not be taking questions over the phone during today’s call. With that, I’ll turn the call over to Ron Erickson, Know Labs’ CEO. Ron?

Ron Erickson: Thanks Jordyn. Welcome everyone to our conference call to review the financial results and operating highlights of our fourth quarter and year-end for fiscal year 2023. Joining me today is Pete Conley, our Chief Financial Officer and Senior Vice President of Intellectual Property who will discuss our financial results. I will walk you through our progress today against the work streams we’ve articulated in our previous earnings calls and preview our goals for fiscal year 2024. Being transparent is critical for us. We have established and worked to maintain communication channels with our investors and followers. You can follow our press releases, which are distributed every time a material event occurs. I ask that you click on any of the links in those releases.

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Q&A Session

I’ve spoken with any number of you with questions and asked, did you click on the link? And if you have questions, I encourage you to reach out to us via our email at ask@knowlabs.co and subscribe to our newsletter on our website. You should also visit our website, www.knowlabs. co as we continually update our research and validation webpage. This section of our website provides access to information on our progress and data from our clinical trials. I’d like to start today’s discussion by reviewing some of the major events and achievements in our fiscal year 2023. A lot has happened this year, starting with significant leadership changes and an acceleration of our development progress and operational execution. On January 26, I was named Chief Executive Officer by the company’s Board of Directors while continuing as Chairman of the Board.

We added new members to the executive team and redistributed core responsibilities. We disclosed new and existing strategic partners in data science, engineering, product design, and regulatory affairs to support the Know Labs team. We also announced the expansion of our Board of Directors and Medical Advisory Board. We appointed three new directors to the Board of Directors with deep sector and intellectual property expertise and added four new members to the Know Labs who bring medical, R&D, and marketplace expertise to our already stellar advisory board. We are fortunate to be able to attract these respected individuals whose areas of expertise are directly related to the work we have underway. Their insights will help us build upon the existing knowledge and skills of our team as we refine our technology, expand our IP asset base, work on strategic collaboration opportunities, and prepare for submission and hope for FDA clearance of our non-invasive blood glucose monitoring device.

So we welcome John Cronin, Larry Ellingson, and Tim Londergan to our Board of Directors. And we welcome Jeff Hitchcock, Kareem Kulkarni, Dr. Meng Tan, and Dr. Satish Garg to our Medical Advisory Board. Earlier in the year, we announced a separate Scientific Advisory Board. It has been fully engaged during this past year and continues to provide insightful counsel to the team on protocol designs, manuscript review, and hardware, to name a few. Throughout fiscal year 2023, we aligned our resources toward our core objective. Early in the year, we reduced our full-time headcount from 19 to 11. At the same time, we expanded our team with external partners into areas where we needed additional resources or where we perceived we had gaps, such as machine learning, software and data management, and clinical research operations.

We now have 12 full-time employees. These changes have proved to be very effective as we’ve achieved a long list of meaningful milestones throughout the balance of the fiscal year. In terms of product development, we revealed this past June our Generation 1 device. The Gen 1 device is an important stage in the development of our proprietary sensing technology. It is a portable research lab designed to be a powerful data collection device. This device has allowed our team to scale data collection to include testing outside of our laboratory and perform sensor characterization. We are often asked if this is the device we will take to the FDA when we submit our technology for approval. This is Generation 1 and was built for remote data collection and research purposes.

We are well underway with the development of our Generation 2 device prototype, which will be a wearable, continuous glucose monitoring device. This device will operate similar to current CGMs being sold in the market, but it will monitor blood glucose noninvasively. We expect our Generation 2 device to be the form factor we will present to the FDA for clinical trials and clearance. We will reveal the Generation 2 device in the next few months. In terms of clinical testing and data collection, our research and development team collected nearly 500 three-hour glucose data sets this fiscal year, resulting in almost 3 billion data points. We have also kicked off an internal trial with up to 100 participants focused on a population with diabetes and pre-diabetes.

This trial has allowed the R&D team to increase data collection in the hyper and hypoglycemic ranges, achieving a MARD under 10% as a goal we must achieve before undertaking FDA clinical trials of our device. Our current and future studies are working toward that goal. Scientific validation is critical for the development of our technology. In this past fiscal year, we published five manuscripts and presented two posters at Medical Conferences. Throughout these publications and presentations, we’ve been able to demonstrate improvement of our technologies, accuracy, stability, and repeatability, going from a MARD of 20.6% to a MARD of 11. 3%, which positions us in an accuracy range similar to other FDA-cleared devices and much closer to our goal.

I’m pleased to announce that we will be presenting the results of our current clinical study at the Advanced Technologies and Treatments for Diabetes or ATTD Conference in Florence, Italy in 2024. If you’re not familiar with ATTD, it is the premier global conference for companies building new technologies for diabetes management. It provides a world-class setting for clinicians and scientists to present, discuss and exchange insights on those rapidly evolving areas of diabetes technology management and treatments. In addition to the presentation of our new study, we will have a presence at the Technology Fair displaying our work and prototype devices. On the Intellectual Property front, we grew our portfolio by nearly 140% in the past 12 months.