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Know Labs 2020 Q2 10Q
According to this, it looks like Particle did a capital raise for between 700K & 800K in July. Nice to see that things are moving along there!
I've only been in the stock for 2-2.5 years, but it is true that their timetable has been set back numerous times. Things do not proceed as quickly as they would like it seems. It's a hidden gem? Yes, if they are able to bring it to market, that is true. But all we can do now is place our bets and wait to see if we are correct. Increased volume is encouraging. Hopefully it will continue.
Yes, they are behind schedule - AGAIN, but NO, their original plan was NOT to have FDA approval this quarter. Others can chime in here, but they wanted to have the Frankenstein model by July and 3 months later the actual prototype. THEN they would pursue the validation trials and THEN apply for FDA approval with revenue beginning late Q4 or more probably Q1. It looks like they will not make that time table since the Frankenstein model is already a month or so late. I guess the best thing to do is sell if you are worried. We all hope this happens ASAP and they don't do us stockholders any favor by keeping us informed. Perhaps their Q2 report will have some information in it. Not sure when they have to file that.
Nothing to worry about. Perhaps it is dropping in anticipation of an upcoming capital raise, but all is good here. We just have to wait another 6-8 weeks.
I wouldn't expect any news on the FDA approval until close to the end of September. If they are lucky, they will receive EAU before October.
It is true that they do not do a very good job at keeping their shareholders up to date. Is it because they have nothing good to report? I hope they are not having trouble miniaturizing this thing. Today, the stock took a real hit. Let's hope we hear something soon! The longer this takes, the more money we eat through as well so that is concerning too. We'll be fine IF/WHEN they get this thing going, but until then, it's a bit unnerving.
Eventually they will. The press release simply said that an agreement was established whereby Mayo Clinic would do the testing. But nothing was said about when - unfortunately. So we keep on waiting.
That was the disappointing thing about the announcement. They gave no details whatsoever so that makes me think that it will not happen for a while. For sure, they would want to use the final product for the trial and they haven't even come out with their "Frankenstein" model yet. So, who knows how long it will be yet? Perhaps they were a bit optimistic in the April video because they were doing a fund raise and were trying to raise interest in the stock - in other words, maybe they were painting too rosy a picture. Now it looks like they missed their second deadline. First one was last yr/early this year and now this goal for a working model by mid to late July. So that is concerning. In the mean time, they burn cash and raise funds and dilute the company. Are they having trouble miniaturizing the components? How are things progressing? No one knows.
A somewhat applicable article about wearables.
https://www.biomedwire.com/wearable-tech-could-play-a-strong-role-in-health-if-these-issues-are-addressed/
At the end of the article, they mention Lexagene as benefitting from this, but I can't figure out why.
Positive thing is that the wearable market is increasing in size. That's about it.
That's why it will be an event driven event. The share price is bound to respond when the product receives validation and they move towards FDA approval. At that point, they will probably qualify for Nasdaq listing. We are getting there! Very encouraging.
"IMOP This is HUGE news. They wouldn’t start this relationship with Mayo if UBAND wasn’t nearly ready and more importantly WORKS!!!"
Agreed! Huge news and very exciting. Agreed that they would not pursue 3rd party validation if it did not work. So we're definitely getting there!
However, I do not think the final product is almost finished and ready to be tested. They haven't even put out their Frankenstein model yet and previous guidance was another 3 months after that until the final product would be finished. He could have been giving it more time than necessary, but still, since the Frankenstein model is not yet done, I think we have a ways to go yet.
"what exactly is Mayo looking at?"
To me it is obvious. They are going to check the Uband's measurements of blood glucose levels against the standard of care - maybe Dexcom's instrument or against some other trustworthy measurement.
Once this is validated, I would think we should see a significant increase in share price. Perhaps they'll do an update video interview at that time. Certainly a press release for sure.
There is just nothing in there about timing. How long will this take?
In the interview from fall 2019 on Youtube, Ron mentioned that it shouldn't take more than a month or so to perform the validation tests. So I wouldn't think it will take too long. The question is only when they can get started. I would assume they would not want to validate the Frankenstein model so my guess is that the validation tests will not begin until the real thing is ready to go. But when will that be? This might just be a press release to keep us believing and interested. It still might be a while until the testing begins.
I hope they do not need to raise any more money between now and then!
It would have been nice to have a bit more of an update on things in the press release. Nothing about where things stand right now. The agreement with The Mayo Clinic though is really impressive, so congrats to Phil et al on that! Let's hope we get an update in the near future.
News out! They have an agreement with the Mayo Clinic to validate the Uband.
Great to hear. Wish there were more details as to timing, but anyway, they have the agreement and it's with a renowned institution!
https://www.businesswire.com/news/home/20200721005190/en/Labs-Enters-Research-Agreement-Mayo-Clinic
Well, we are waiting somewhat patiently, somewhat impatiently. I have to say that I wish Phil would NOT have given guidance that this would be ready in 3 months if he could not keep to his schedule. He should have been a bit more conservative.
It is concerning! Another delay would definitely do some serious damage to their credibility and that will not be easily repaired.
I hope the 3 month timeline was not simply given in order to get people to invest in their company. We'll see.
I'm still here and waiting and trying to stay positive. I guess things just take time.
I would give them until the end of July for the 3 months they projected. He did make it sound like 3 months should be doable, so we'll see. At least there was a nice rise in the share price today. Maybe someone knows something? I don't know. We just continue to wait.
I hope that's it. I guess it could just be buying in anticipation of the catalyst - the Frankenstein model. Either way, this is good news.
Haven't heard a peep out of them for a while now. It would be nice to hear some kind of an update one of these days.
There was a 21K+ buy at $1.84, the high of the day, but two sells of the same size at lower prices. Not sure why people are selling like that. Just hoping there is no bad news on the horizon!
People have to sell for any number of reasons. Let's just hope this was not because of another delay or some other negative thing. It's a bit disconcerting to see it fall this low again.
Same story will continue until we get substantive progress, but that's OK. Nice to have another buying opportunity. One of these days, hopefully in the near future, we will leave the 1's behind for good. It will take the release of some news that reveals the real value of the company.
Right now, I think there are 2 main risks that we face. 1) Delays. Delays due to complications in the miniaturization of the product, the virus, or other unforeseen issues. We know - or at least based on what they have told us - we "know" that they have technology that works quite accurately. So it is just a matter of getting that technology into the right form/machine to make use of it. Hopefully we will see the finished product yet this year and sales beginning next year, but you can't count your chickens before they are hatched.
If there are more delays, there could be more dilution. In light of the recent fund raise, I think the fully diluted share number is around 66 million, but that could still grow from here before we get income.
Q: Does anyone know how they plan to fund pre-sales production?
2) Competition. This would not be a game breaker for them, but it could potentially take a bite out of their share of the pie to a certain extent. So, profit potential might have to be adjusted down a bit in that case - especially if they are not first to market.
We've come a long way, but it has definitely taken them a long time to miniaturize this and get the final working prototype completed. In their video from last fall they thought that by early this year that would happen. It didn't and the share price fell significantly. So it has clearly taken them longer than they initially anticipated. Now they are giving guidance for a working prototype to be completed hopefully sometime in Q4. If they do not make this goal, I will become a bit worried!
When the working prototype comes out, I may pick up some more shares because things will be significantly de-risked.
I'll feel better once we have proof of concept.
I like it that they seem to be moving on the Particle side of the business as well. That should eventually provide some nice additional income to KNOW Labs.
I imagine that would be a few years away, but who knows? If Particle does a capital raise, I guess the company would then no longer be considered a 100% wholly owned subsidiary. Am I right?
Does anyone know if they plan to fund Particle and then list it as a tradable stock in the future? Could they still list it if it is a wholly owned subsidiary of $KNWN? I'm not very up on this stuff.
So here is what that said:
"On June 1, 2020, the Board of Directors of Know Labs Inc. (the “Company”) approved and ratified entry into an intercompany Patent License Agreement (the “Agreement”) dated May 21, 2020 with its wholly owned subsidiary, Particle, Inc., a Nevada corporation (“Particle”). Pursuant to the Agreement, Particle shall receive an exclusive non-transferrable license to use certain patents and trademarks of the Company, in exchange the Company shall receive: (i) a one-time fee of $250,000 upon a successful financing of Particle, and (ii) a quarterly royalty payment equal to the greater of 5% of the Gross Sales, net of returns, from Particle, Inc. or $5,000."
Do you know how they plan to fund Particle?
It says "upon a successful financing of Particle, ..."
Does that mean that the parent company will fund it or that Particle itself will do a fund raise? Am a bit confused.
Maybe some newsletter writer somewhere pushed the shares. Anyone on Biopub? Perhaps they gave a recent upgrade or bullish assessment of the stock. Who knows?
I'm guessing that had a lot to do with the Biopub video. That seems to have garnered a lot of views on Youtube and probably attracted a number of investors. Now, all they need to do is to deliver. Let's hope this time that they are able to generally keep to their timeline - which they reluctantly revealed in the video knowing there is always a chance of further delays. Once we get the Frankenstein model out, I think the excitement will continue to build here.
Gotta be pretty happy with this price action. Seems like all of a sudden there is a growing interest in this stock. I wonder if someone knows something. Hopefully in a month or two, we might see the Frankenstein working model that they are currently working on.
$5.7 million raised! I wonder how far that will take them. Would be nice if there were no more raises until income, but cost of ramping up production must also be factored in.
Does anyone know what the manufacturing capability of Racer is?
It's nice to see it starting to move a bit here!
Is the European approval of CarpX coming up soon?
In the Q&A time he received a question about Solys diagnostic's CGM device. I guess we said it before, but they are targeting in hospital use for patients first so even if they beat us to market, they will not compete directly with us - at least initially. Hopefully we will still be the first to market with a wearable.
Here is the Q&A
Unidentified Analyst
Good afternoon, Lishan and thank you for your work and I feel guilty riding your coattails, you guys are amazing. I'm a long term investor. I heard this blade I was listening to the conference call. Did you guys mentioned the glucose monitor, the laser. Did you say you had a prototype device you're going to test this summer?
Lishan Aklog
Yes. Let me have fill in some of those details. I did touch on it, but again just try to keep it a bit brief. So this is -- so the device that the technology we license from our partners at Airware, the Dr Jacob Longs company. We've licensed that within a field of use to create inpatient hospital based glucose, continuous glucose monitoring without the need for doing blood tests, without finger sticks or without blood drop, just by a clamp on the skin that's similar to one of this oximetry devices, the ones that clip on your finger.
So where we are with that is we've been working on this R&D project taking the laser technology that he developed and putting it into a working prototype basically in a box that have the lasers configured consistent with the invention. That that's been completed. And we also have a prototype clip, tissue clamp that basically will be applied to the web of the hand.
So that device has been tested on the bench-top using these little tubes, these little covets of glucose at varying concentrations and the key is if you do the concentrations across the range that you would be looking at in the patient do you get a linear response. So when the glucose is higher you get more of a signal, if glucose is higher than that you get more of a signal and it follows a nice linear response. And we have been able to document that just over the last week or two.
The next step is and we were hoping to get this done this week but it's been delayed a couple of weeks but not too long. Is to actually take that box that working prototype and test it on human volunteers who basically start off fasting and then take some orange juice and see how their blood sugar goes up and all so in a rat model a diabetic rat model, animal model where we can get much higher glucose levels and confirm that that the non-invasive testing works.
They are very precise standards for accuracy that that all glucose monitoring devices are held to. It's about plus or minus 15%. So we're pretty optimistic that we'll get to that and once we cross that threshold then that the gun goes off and we can actually start a formal commercial development process where we manufacture a device that can be used in a hospital typically in an ICU setting and continuously monitor glucose. So that's where things are with that and I think that's we're very excited about.
Unidentified Analyst
While, they're huge.
Lishan Aklog
It’s a big opportunity, yes.
Unidentified Analyst
I mean, its huge, because I know so many people that hate to dip their finger pricked. My daughter hate needles. I mean, and then you could do this for at-home use. Is that what you look at that for?
Lishan Aklog
That would be the next step. So just to clear, the original -- the initial license is only for the hospital, but that's a big a big market. So in the ICU, particularly in cardiac ICU a 100% of the patients there are on an insulin drip. So they're getting their blood sugar checked literally hourly or every other hour. [So this does not compete with our product it would seem. Phil is not aiming for hospital usage I don't think.]
So there's a huge opportunity in that. But obviously the goal, the next step in this would be to take this technology for use in an inpatient setting and then license it, continue to expand the license so that we can replace home fingerstick devices, that sort of deck of card sized boxes that wouldn't require a finger stick, but it could measure your glucose just by clamping onto the skin.
Unidentified Analyst
How much does that work?
Lishan Aklog
I'll leave that up to you. It's a big market.
If you are talking about the 10Q, [Sorry, I called it a 10K) it's just a regular quarterly report. They currently have a capital raise going on Flashfunders.com, but I heard it is closing on Friday of this week. There is also a filing related to that listed there I think.
Probably all 10Ks put out by pre-revenue companies read like this, but if you take it literally, it's a bit scary.
Q1 10K is out. https://fintel.io/doc/sec-knwn-10q-know-labs-2020-may-15-18397
Not much of interest there except the continual theme that they are not making any money, foresee looses continuing for a while as they seek to monetize their technology, and therefore have concerns about whether they can continue as a company.
Hopefully a year from now, we will see some change in these 10Ks.
Anyone know how many shares there are out right now fully diluted? Seems to me like I saw a number around 57 million somewhere, but by the time we see income, I'm sure it will be a good bit more than that.
Also, has the company given any guidance as to possible sales numbers for the first year?
I definitely agree that overall it should steadily take market share away from Dexcom. I would like to think it would happen relatively quickly but things always seem to take time. And we still could easily see some competition in this area as well.
Does anyone see any potential problems with people who already use a wearable of some type being a bit reticent to wear a 2nd one? I think that some people would not want to do this. But it's a huge market out there so not a big deal, but just thinking out loud here.
Thanks for that perspective.
Going long here, but not really for a virus play. They are way behind on that, but might make some progress over time. But their gold and CBD extraction technology is worth lots of money for patient investors. Income from CBD companies will probably begin in a few months. This is a BIG deal!
"But what if KNWN starts to steal market share from DCOM, isn't dexcom going to try and snuff KNWN out? And wonder if DCOM is even aware of KNWN yet? They are not going to like some little unknown company taking intruding on their turf, the David Goliath scenario..."
I believe that Phil mentioned in the biopub video from last fall that they have some sort of a poison pill to try to discourage a buyout. I forget the details of that plan, but they are thinking about this.