Know Labs(KNW) - 2024 Q4 - Annual Report

Financial Performance - The company reported a net loss of $16,582,000 for the year ended September 30, 2024, compared to a net loss of $15,289,000 for the year ended September 30, 2023, reflecting an 8.5% increase in losses[300]. - The accumulated deficit as of September 30, 2024, was $138,736,000, with net losses of $16,582,000 and $15,289,000 for the years ended September 30, 2024, and 2023, respectively[303]. - Net cash used in operating activities for the year ended September 30, 2024, was $12,829,000, compared to $10,354,000 for 2023, reflecting a net loss of $16,582,000[312]. Expenses - Research and development expenses decreased by $1,613,000 to $6,114,000 for the year ended September 30, 2024, a reduction of 20.9% compared to $7,727,000 in 2023[296]. - Selling, general and administrative expenses increased by $2,538,000 to $9,109,000 for the year ended September 30, 2024, representing a 38.6% increase from $6,571,000 in 2023[297]. - Non-cash expenses for the year ended September 30, 2024, included stock-based compensation of $2,958,000 and depreciation and amortization of $81,000[312]. Cash Flow and Financing - The company completed a registered securities offering on August 9, 2024, raising net proceeds of approximately $3.468 million[291]. - A second registered securities offering on August 16, 2024, generated net proceeds of approximately $1.515 million[292]. - Net cash provided by financing activities for the year ended September 30, 2024, was $7,983,000, an increase from $5,865,000 in 2023, driven by proceeds from debt and common stock offerings[315]. - The company raised $5,473,000 from a common stock offering on September 29, 2023, selling 28,000,000 shares at $0.25 per share[316]. Cash Position - As of September 30, 2024, the company had cash and cash equivalents of $3,111,000 and a net working capital deficit of approximately $2,053,000[303]. - The balance of the money market account as of September 30, 2024, was $2,942,000, down from $7,836,000 in 2023[324]. - As of September 30, 2024, the company had contractual cash obligations totaling $6,490,067, including convertible notes payable of $6,095,066[317]. Operational Changes - The company launched the Generation 2 working prototype device during the year ended September 30, 2024, as part of its technology development efforts[296]. - The company reduced its headcount by nine during the year ended September 30, 2024, to manage operating expenses more effectively[296]. Internal Controls - Management concluded that internal controls over financial reporting were effective as of September 30, 2024[331]. - Management assessed the effectiveness of internal control over financial reporting as of September 30, 2024, concluding it was effective[331]. - No changes in internal controls over financial reporting were identified during the year ended September 30, 2024, that materially affected the internal control[334]. - Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and compliance with GAAP[330]. - The internal control system is subject to inherent limitations and may not prevent or detect all misstatements[333]. - The design of the control system must consider resource constraints and the cost-benefit relationship of controls[333]. - Management's evaluation used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission[331]. - Internal controls include policies and procedures for maintaining accurate records of transactions and asset disposition[330]. - The company does not include an attestation report from its registered public accounting firm regarding internal control over financial reporting[332]. - Reasonable assurance is provided that transactions are recorded to permit the preparation of financial statements in accordance with GAAP[330]. - There were no material changes in internal controls that could affect financial reporting during the evaluation period[334].