Know Labs(KNW) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For FY 2023, the company reported a net loss of $15.29 million, a reduction of 23.8% compared to a net loss of $20.07 million in FY 2022, translating to an earnings per share loss of $0.41, an improvement from the previous year's loss of $0.50 [64][66] - Research and development expenses increased by 43.5% year-over-year, totaling $7.73 million in FY 2023 compared to $5.39 million in FY 2022, driven by engineering services and development costs for the Generation 1 device [34] - Selling, general, and administrative expenses decreased by 19.1% to $6.57 million in FY 2023 from $8.12 million in FY 2022, reflecting cost-reduction initiatives [66] Business Line Data and Key Metrics Changes - The company achieved a significant improvement in technology accuracy, reducing the Mean Absolute Relative Difference (MARD) from 20.6% to 11.3%, positioning it closer to FDA-cleared devices [12][21] - The Generation 1 device was revealed in June 2023, designed for remote data collection and research purposes, while the Generation 2 device is expected to be more than 50% smaller and presented to the FDA for clinical trials [11][47] Market Data and Key Metrics Changes - The company reported a portfolio growth rate that is at least four times higher than the average patent market growth rate for noninvasive blood glucose monitoring, with over 250 patents issued, pending, or in process [13][109] - The company is currently conducting trials with up to 100 participants and plans to scale testing to 500-1,000 participants to enhance data diversity and generalizability [28][90] Company Strategy and Development Direction - The company aims to develop the first FDA-cleared, truly noninvasive glucose monitoring device, with a broader vision to transform medical diagnostics through non-invasive means [63] - Strategic partnerships are being pursued with biopharma, medical device manufacturers, and consumer electronics partners to accelerate product development and commercialization [94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in having enough cash to operate until at least June 30, 2024, while planning to raise additional funds through equity and convertible debentures [73] - The company acknowledged the challenges in capital markets but emphasized the importance of aligning resources to critical functions such as clinical and product development [110] Other Important Information - The company plans to present results from its current clinical study at the Advanced Technologies and Treatments for Diabetes (ATTD) Conference in Florence, Italy, in 2024 [44] - The company has reduced its monthly burn rate from $1.2 million to approximately $700,000, indicating improved financial management [14] Q&A Session Summary Question: What progress has been made with the Gen 1 prototype device? - The Gen 1 device has allowed for expanded testing outside the lab, facilitating data collection and testing [38] Question: What is the path to FDA clinical trials, including key milestones and timing? - Management indicated that they are working with urgency towards FDA submission and will share timelines as confidence in them increases [40] Question: What sort of joint development agreements can be expected in the future? - Management noted that these agreements can take time and they cannot speculate on the duration or form of these agreements [68]