Executive Summary

Q1 FY2024 (quarter ended December 31, 2023) delivered reduced net loss ($3.45M) and improved EPS (-$0.04 vs -$0.08 YoY), reflecting lower R&D and controlled OpEx even as SG&A rose modestly for key hires .
Cash balance fell to $4.82M from $8.02M at September 30, 2023; management reiterated runway “until at least June 30, 2024” and highlighted an $18M shelf registration effective January 11, 2024 as part of capital plans .
Strategic execution advanced across four work streams: hardware (Gen 2 miniaturization), clinical trials (up to 100 participants; focus on hypo/hyper ranges), algorithm development (targeting ≤10% MARD), and IP growth (264 patents issued/pending/in process as of Dec 31, 2023) .
Potential catalysts: presentation at ATTD (Florence, Mar 6–9) including Mayo Clinic-led ePosters; active exploration of rest-of-world revenue paths that may not require FDA clearance; ongoing JDA discussions with large partners under NDAs .
No Wall Street consensus estimates available from S&P Global for KNW; therefore no “beat/miss” framing this quarter (S&P Global consensus unavailable) [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

EPS improved 50% YoY (-$0.04 vs -$0.08) on lower R&D and disciplined OpEx; net loss contracted 9.8% YoY to $3.45M .
Advancing toward <10% MARD: management reaffirmed the algorithm development goal and described steps to broaden data diversity for generalizability; “Our goal is to achieve an algorithm with a mean absolute relative difference or MARD of 10% or less” .
IP leadership expanded: 264 patents issued/pending/in process as of Dec 31, 2023, supporting a defensible technology moat in noninvasive glucose monitoring .

What Went Wrong

Liquidity tightened: cash declined to $4.82M (from $8.02M at Sep 30) with net cash used in operations of $3.39M; equity fell to $1.23M (from $3.74M) .
Burn dynamics: core burn steady at ~~$700–$800K/month, with incremental Gen 2 development spend (~~$200–$300K/month); Q1 included a ~$1M one-time financing-related expense to auditors/counsel .
No revenue reported and continued going concern disclosure (previously noted by NYSE requirement) underscores reliance on external financing and strategic milestones to sustain operations .

Financial Results

Income Statement and Operating Metrics

Metric	Q3 2023	Q4 2023	Q1 2024
Net Loss ($USD Millions)	$3.59	N/A (not disclosed in available documents)	$3.45
EPS ($USD)	-$0.07	N/A (not disclosed)	-$0.04
R&D Expense ($USD Millions)	$1.87	N/A (not disclosed)	$1.49
SG&A Expense ($USD Millions)	$1.35	N/A (not disclosed)	$2.01
Operating Loss ($USD Millions)	N/A (not disclosed)	N/A (not disclosed)	$3.50
Non-cash Charge ($USD)	$4.96M (preferred dividends, Q3)	N/A	$0.79M (incl. $0.70M SBC)

Notes:

Q1 FY2024 “Net loss attributable to common shareholders” reflects deemed preferred dividends of $63,629 .
Company did not report revenue figures in the materials reviewed.

Balance Sheet and Liquidity

Metric	6/30/2023	9/30/2023	12/31/2023
Cash & Equivalents ($USD Millions)	$3.93	$8.02	$4.82
Shareholders’ Equity ($USD Millions)	$0.72	$3.74	$1.23
Total Assets ($USD Millions)	N/A	$8.27	$5.01
Convertible Notes Payable, net ($USD Millions)	N/A	N/A	$2.76
Net Cash Used in Operations (Quarter) ($USD Millions)	N/A	N/A	$3.39

Estimates vs Actuals (S&P Global Consensus)

S&P Global consensus for KNW was unavailable; thus, no beat/miss comparisons this quarter (S&P Global consensus unavailable) [GetEstimates error].

Metric	Q1 2024 Actual	Q1 2024 Consensus	Delta
EPS ($USD)	-$0.04	N/A	N/A
Revenue ($USD)	N/A (not reported)	N/A	N/A

KPIs and Operating Progress

KPI	Q3 2023	Q4 2023	Q1 2024	Trend
Algorithm Accuracy (MARD) Target	Working toward <10%	Reiterated <10% target	Goal ≤10%; generalizability focus	Improving
Patents (Issued/Pending/In Process)	169	>250	264	Increasing
Clinical Trial Scale	Planning broader cohorts; venous blood protocol	Up to 100 participants	Trial with up to 100 participants ongoing; aiming broader diversity and glycemic ranges	Expanding
Core Burn Rate	~$800K/month	~$700K/month	~$700–$800K core + $200–$300K incremental Gen 2; ~$1M one-time in Q1	Controlled core; investment in Gen 2
Hardware Progress	Gen 1 portable data collection device	Gen 2 prototype in development; >50% smaller	Gen 2 miniaturization continues	Advancing

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Runway	Through at least 6/30/2024	Indicated in FY2023 filing/Dec call remarks	Reaffirmed runway “until at least June 30, 2024”	Maintained
Capital Plan	N/A	Expect to raise funds via equity/preferred/convertible debentures	$18M shelf filed 12/22/2023; effective 1/11/2024	Formalized
Revenue Outlook	2024	N/A	Exploring rest-of-world revenue path not requiring FDA; uncertain timing	New exploration (non-U.S.)
Product Milestones	Early 2024	Reveal Gen 2 “next few months”	ATTD presence; potential device updates shown in Italy	Event-timed updates

No explicit quantitative guidance on revenue, margins, OpEx, OI&E, tax rate, or dividends was provided in the documents reviewed.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
AI/Algorithm Accuracy	Progress to 11.3% MARD; target <10%	Goal <10%; data scale needed for generalizability	Target ≤10%; broadening data diversity; considering calibration	Improving accuracy
Hardware/Gen 2	Gen 1 revealed; Gen 2 planned	Gen 2 wearable CGM; >50% smaller; reveal in “next few months”	Gen 1 characterization; miniaturizing to next iteration; updates at ATTD	Approaching reveal
Clinical Trials	Venous blood protocol; diversify cohorts	Up to 100 participants; scale data; broader ranges	Ongoing internal trial with up to 100 participants; focus on hypo/hyper ranges	Scaling
Regulatory Path	Early engagement; need generalizable accuracy	Must achieve repeatable standard before FDA trials	Highlights FDA accuracy requirements; algorithm generalizability	Prereq work continues
IP Portfolio	169 patents issued/pending	>250 portfolio; leadership documented	264 issued/pending/in process; defensible moat	Expanding
Funding/Runway	Burn reduced to ~$800K/month; financing plans	~$700K/month; runway to at least 6/30/24; plan to raise funds	Reaffirmed runway; shelf effective; burn breakdown and one-time legal/audit cost	Stable runway; capital optionality
Market/Revenue Path	N/A	N/A	Exploring rest-of-world revenue without FDA; potential non-medical field-of-use licensing	New avenues

Management Commentary

“Our goal is to achieve an algorithm with a mean absolute relative difference or MARD of 10% or less. We'll also need to meet FDA's requirements for accuracy in varying glycemic ranges” — Ron Erickson .
“Core burn rate has remained relatively flat at between $700,000 and $800,000 a month… incremental spend on top of the core burn has been running about $200 to $300K a month… Q1 [had] a one-time expense… close to $1 million to auditors and counsel” — Pete Conley .
“We are actively and aggressively exploring [a rest-of-world] path to see if… we can generate revenue without having to go through the FDA” — Pete Conley .
“As of December 31, 2023, we had cash and cash equivalents of $4.82 million… we filed an $18 million S‑3 shelf… declared effective on January 11, 2024” — Press Release .
“As of December 31, 2023, we have 264 patents issued, pending and in process… [building] a defensible intellectual property moat” — Ron Erickson .

Q&A Highlights

Burn and spending mix: Core OpEx ~$700–$800K/month; Gen 2 acceleration adds ~$200–$300K/month; Q1 included ~$1M one-time legal/audit costs tied to financing .
JDA status: Multiple joint development agreements in progress under NDAs with large potential partners; scope and timing undisclosed .
2024 revenue possibilities: Actively exploring non-U.S. markets for spot-check use cases and field-of-use licensing outside medical diagnostics; timing uncertain, not counted upon .
ATTD rationale: Global KOL engagement and showcasing clinical updates; Mayo Clinic collaborator presenting ePosters; potential material announcements .

Estimates Context

Wall Street consensus (S&P Global) for KNW EPS and revenue was unavailable; as a result, there is no beat/miss assessment this quarter. Estimates comparisons are omitted (S&P Global consensus unavailable) [GetEstimates error].
Given pre-revenue status and limited coverage, future estimates may remain sparse; investors should anchor near-term narrative to product milestones and financing updates rather than headline “beats/misses” .

Key Takeaways for Investors

Liquidity is the near-term focus: runway “until at least June 30, 2024” and a now-effective $18M shelf add financing optionality; monitor potential raises and dilution .
Execution milestones: anticipate Gen 2 device updates and clinical data presentations at ATTD in March; these are key sentiment catalysts .
Technical progress: algorithm targeting ≤10% MARD with broader hypoglycemic/hyperglycemic data collection to satisfy FDA accuracy requirements; generalizability remains the gating factor .
Strategic optionality: exploration of rest-of-world revenue paths (spot-check use, screening) and non-medical field-of-use licensing could provide interim monetization ahead of U.S. FDA clearance .
IP moat strengthening: 264 patents as of Dec 31 underscores defensibility in noninvasive glucose monitoring versus incumbents and new entrants .
Burn discipline vs. acceleration: core burn stable; incremental spend directed to Gen 2; one-time Q1 costs related to financing; watch cash cadence into mid-2024 .
Risk lens: no revenue reported; prior going concern disclosure noted by NYSE rule; outcomes hinge on clinical validity, regulatory trajectory, partnership execution, and capital access .

KNOW LABS, INC. (KNW)·Q1 2024 Earnings Summary