knwn_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT

For the transition period from _______ to ________

Commission File number 000-30262

KNOW LABS, INC.

(Exact name of registrant as specified in charter)

Nevada		90-0273142
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

619 Western Avenue, Suite 610 Seattle, Washington 98104		98104
(Address of principal executive offices)		(Zip Code)

	206-903-1351
	(Registrant's telephone number, including area code)

	619 Western Avenue, Suite 610, Seattle, Washington USA
	(Former name, address, and fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		KNW		NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock, $0.001 par value, issued and outstanding as of May 14, 2025: 7,500,000 shares.

DOCUMENTS INCORPORATED BY REFERENCE: None.

TABLE OF CONTENTS
		Page Number

PART I	FINANCIAL INFORMATION

ITEM 1	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets as of March 31, 2025 and September 30, 2024	3

	Consolidated Statements of Operations for the three and six months ended March 31, 2025 and 2024	4

	Consolidated Statements of Changes in Stockholders’ Deficit	5

	Consolidated Statements of Cash Flows for the six months ended March 31, 2025 and 2024	6

	Notes to the Financial Statements	7

ITEM 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	33

ITEM 4	Controls and Procedures	33

PART II	OTHER INFORMATION

ITEM 1A.	Risk Factors	34

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	35

ITEM 3	Defaults upon Senior Securities	35

ITEM 4	Other Information	35

ITEM 6	Exhibits	36

	SIGNATURES	37

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

KNOW LABS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Unaudited

	March 31, 2025			September 30, 2024 (1)
ASSETS	Unaudited

CURRENT ASSETS:
Cash and cash equivalents	$	443,913		$	3,110,755
Total current assets		443,913			3,110,755

PROPERTY AND EQUIPMENT, NET		49,751			66,796

OTHER ASSETS
Other assets		149,174			149,174
Operating lease right-of-use asset		281,347			337,703

TOTAL ASSETS	$	924,185		$	3,664,428

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES:
Accounts payable - trade	$	1,060,795		$	552,680
Accrued expenses		380,217			101,582
Accrued expenses - related parties		113,443			84,573
Current portion of convertible notes payable, net		3,086,550			2,855,058
Current portion of convertible notes payable - related parties		1,879,515			1,460,926
Current portion of operating lease right-of-use liability		112,941			108,560
Total current liabilities		6,633,461			5,163,379

NON-CURRENT LIABILITIES:
Operating lease liability, net of current portion		174,273			249,728
Non-current portion of convertible notes payable, net		-			407,522
Total liabilities		6,807,734			5,820,629

COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS’ DEFICIT
Preferred stock - $0.001 par value, 5,000,000 shares authorized, Series C and D shares issued and outstanding as follows:
Series C Convertible Preferred stock $0.001 par value, 30,000 shares authorized, 17,858 shares issued and outstanding at 3/31/2025 and 9/30/2024, respectively		1,790			1,790
Series D Convertible Preferred stock $0.001 par value, 20,000 shares authorized, 10,161 shares issued and outstanding at 3/31/2025 and 9/30/2024, respectively		1,015			1,015
Common stock - $0.001 par value, 7,500,000 shares authorized, 3,541,707 and 2,702,444 shares issued and outstanding at 3/31/2025 and 9/30/2024, respectively (2)		113,101			108,021
Additional paid in capital		141,037,185			136,468,855
Accumulated deficit		(147,036,640	)		(138,735,882	)
Total stockholders' deficit		(5,883,549	)		(2,156,201	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	924,185		$	3,664,428

	(1)	Derived from the audited consolidated balance sheet.
	(2)	Information pertaining to the number of shares outstanding gives retroactive effect to a 1 for 40 reverse stock split that became effective on February 19, 2025.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

KNOW LABS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

	Three Months Ended,						Six Months Ended,
	March 31, 2025			March 31, 2024			March 31, 2025			March 31, 2024
	Unaudited			Unaudited			Unaudited			Unaudited
OPERATING EXPENSES-
RESEARCH AND DEVELOPMENT EXPENSES	$	418,207		$	2,175,245		$	1,220,309		$	3,661,633
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		1,789,315			2,550,848			3,754,448			4,538,657
Total operating expenses		2,207,522			4,726,093			4,974,757			8,200,290
OPERATING LOSS		(2,207,522	)		(4,726,093	)		(4,974,757	)		(8,200,290	)

OTHER INCOME (EXPENSE), NET
Interest income		2,531			45,243			16,355			96,253
Interest expense		(1,374,045	)		(716,814	)		(2,557,844	)		(740,251	)
Loss on debt settlements		-			-			(728,298	)		-
Total other expense, net		(1,371,514	)		(671,571	)		(3,269,787	)		(643,998	)

LOSS BEFORE INCOME TAXES		(3,579,036	)		(5,397,664	)		(8,244,544	)		(8,844,288	)

Income tax expense		-			-			-			-

NET LOSS		(3,579,036	)		(5,397,664	)		(8,244,544	)		(8,844,288	)

Deemed dividends on Series C and D Preferred Stock		(23,662	)		(98,609	)		(56,214	)		(162,238	)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(3,602,698	)	$	(5,496,273	)	$	(8,300,758	)	$	(9,006,526	)

Basic and diluted loss per share	$	(1.24	)	$	(2.69	)	$	(2.95	)	$	(4.42	)

Weighted average shares of common stock outstanding- basic and diluted (1)		2,909,985			2,044,153			2,809,757			2,035,706

(1)

Information pertaining to the number of shares outstanding and per share data gives retroactive effect to a 1 for 40 reverse stock split that became effective on February 19, 2025.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

KNOW LABS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY

Unaudited

																			Total
	Series C Convertible Preferred Stock				Series D Convertible Preferred Stock				Common Stock				Additional Paid in			Accumulated			Stockholders' Equity/
	Shares		$		Shares		$		Shares (1)		$		Capital			Deficit			(Deficit)
Balance as of October 1, 2023		17,858	$	1,790		10,161	$	1,015		2,008,961	$	80,358	$	125,501,537		$	(121,840,788	)	$	3,743,912.0
Stock compensation expense - employee options		-		-		-		-		-		-		699,246			-			699,246
Issuance of common stock for services		-		-		-		-		2,625		105		26,145			-			26,250
Deemed dividends on Series C and D Preferred Stock		-		-		-		-		-		-		63,629			(63,629	)		-
Isssuance of common stock for common stock offering		-		-		-		-		22,077		884		202,221			-			203,105
Net loss		-		-		-		-		-		-		-			(3,446,624	)		(3,446,624	)
Balance as of December 31, 2023		17,858		1,790		10,161		1,015		2,033,663		81,347		126,492,778			(125,351,041	)		1,225,889
Stock compensation expense - employee options		-		-		-		-		-		-		616,317			-			616,317
Issuance of common stock for services		-		-		-		-		8,712		347		170,413			-			170,760
Issuance of common stock for exercise of warrants		-		-		-		-		17,871		715		(715	)		-			-
Deemed dividends on Series C and D Preferred Stock		-		-		-		-		-		-		98,609			(98,609	)		-
Expenses for extension of notes and warrants		-		-		-		-		-		-		594,761			-			594,761
Issuance of shares and warrants in connection with debt offering		-		-		-		-		2,558		103		1,035,860			-			1,035,963
Net loss		-		-		-		-		-		-		-			(5,397,664	)		(5,397,664	)
Balance as of March 31, 2024		17,858		1,790		10,161		1,015		2,062,804		82,512		129,008,023			(130,847,314	)		(1,753,974	)

Balance as of October 1, 2024		17,858		1,790		10,161		1,015		2,702,444		108,021		136,468,855			(138,735,882	)		(2,156,201	)
Stock compensation expense - employee options		-		-		-		-		-		-		550,703			-			550,703
Deemed dividends on Series C and D Preferred Stock		-		-		-		-		-		-		32,552			(32,552	)		-
Isssuance of common stock for common stock offering		-		-		-		-		31,250		1,250		298,750			-			300,000
Issuance of common stock for debt payment		-		-		-		-		45,455		1,818		238,182			-			240,000
Repricing of convertible notes payable and warrants		-		-		-		-		-		-		1,302,607			-			1,302,607
Extension of warrants		-		-		-		-		-		-		513,499			-			513,499
Net loss		-		-		-		-		-		-		-			(4,665,508	)		(4,665,508	)
Balance as of December 31, 2024		17,858		1,790		10,161		1,015		2,779,149		111,089		139,405,148			(143,433,942	)		(3,914,900	)
Stock compensation expense - employee options		-		-		-		-		-		-		593,681			-			593,681
Deemed dividends on Series C and D Preferred Stock		-		-		-		-		-		-		23,662			(23,662	)		-
Isssuance of common stock for At The Market common stock offering		-		-		-		-		379,451		1,628		509,077			-			510,705
Issuance of common stock for debt payment		-		-		-		-		383,118		384		505,617			-			506,001
Impact of reverse stock split due to rounding		-		-		-		-

SEC Form 10-Q filed by Know Labs Inc.