KNOW LABS Posts Zero Revenue, Widens Losses Amid Equity Plan Boost

TL;DR

KNOW LABS is burning cash with zero revenue, and investors should brace for significant dilution as they keep issuing more stock to stay afloat.

AI Summary

KNOW LABS, INC. reported no revenue for the three and nine months ended June 30, 2025, and June 30, 2024, indicating a continued pre-revenue stage. The company incurred net losses of $17,858 for the three months ended June 30, 2025, a decrease from $10,161 for the same period in 2024. For the nine months ended June 30, 2025, the net loss was $16,916, compared to $10,161 for the nine months ended June 30, 2024. Key business changes include the amendment of the 2021 Equity Incentive Plan on July 1, 2025, increasing the shares reserved for issuance by 5,000,000 to a total of 7,500,000 shares. Additionally, the company amended its Articles of Incorporation on July 31, 2025, to increase authorized common stock from 20,000,000 to 30,000,000 shares. A significant risk is the company's reliance on future financing, as evidenced by a $233,644 promissory note issued in July 2025. The strategic outlook remains focused on equity and debt financing to support operations and product development, with no immediate revenue generation. The company also issued 2,702,444 shares of common stock upon conversion of Series C Preferred Stock during the nine months ended June 30, 2025.

Why It Matters

KNOW LABS' continued lack of revenue and reliance on dilutive financing, like the recent increase in authorized common stock to 30,000,000 shares, signals high risk for investors. The company's strategic focus on increasing its equity incentive plan to 7,500,000 shares suggests a long runway before commercialization, potentially impacting employee morale if milestones aren't met. For customers, the absence of revenue means no products are yet on the market, leaving them without access to the company's promised innovations. In a competitive landscape, this prolonged pre-revenue phase could allow rivals to gain market share, making future entry more challenging for KNOW LABS.

Risk Assessment

Risk Level: high — The company reported no revenue for the three and nine months ended June 30, 2025, and incurred net losses of $17,858 and $16,916, respectively, indicating a complete lack of operational income. Furthermore, the increase in authorized common stock from 20,000,000 to 30,000,000 shares and the increase in shares reserved for the equity incentive plan to 7,500,000 shares point to significant future dilution for existing shareholders.

Analyst Insight

Investors should avoid USBC given its pre-revenue status, widening losses, and clear intent for substantial shareholder dilution through increased authorized shares and equity incentive plans. Monitor for concrete product development milestones and revenue generation before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

$233,644

net Income

-$17,858

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $0 — Revenue (No revenue for three and nine months ended June 30, 2025, indicating pre-revenue stage.)
• $17,858 — Net Loss (Q3 2025) (Increased from $10,161 in Q3 2024, showing widening losses.)
• $16,916 — Net Loss (YTD Q3 2025) (Increased from $10,161 in YTD Q3 2024, indicating higher cumulative losses.)
• 30,000,000 — Authorized Common Stock (Increased from 20,000,000, signaling potential for significant future dilution.)
• 7,500,000 — Equity Incentive Plan Shares (Increased from 2,500,000, indicating more shares available for employee compensation and potential dilution.)
• $233,644 — Promissory Note (Issued in July 2025, highlighting reliance on debt financing.)
• 2,702,444 — Shares Issued (From Series C Preferred Stock conversion, contributing to share count increase.)

Key Players & Entities

• KNOW LABS, INC. (company) — filer of the 10-Q
• $17,858 (dollar_amount) — net loss for the three months ended June 30, 2025
• $10,161 (dollar_amount) — net loss for the three months ended June 30, 2024
• $16,916 (dollar_amount) — net loss for the nine months ended June 30, 2025
• 5,000,000 (dollar_amount) — increase in shares reserved for 2021 Equity Incentive Plan
• 7,500,000 (dollar_amount) — total shares reserved for 2021 Equity Incentive Plan
• 20,000,000 (dollar_amount) — previous authorized common stock
• 30,000,000 (dollar_amount) — new authorized common stock
• $233,644 (dollar_amount) — promissory note issued in July 2025
• 2,702,444 (dollar_amount) — shares of common stock issued from Series C Preferred Stock conversion

FAQ

Risk Factors

• Reliance on Future Financing [high — financial]: The company's operations and product development are heavily dependent on securing future financing. This is evidenced by the issuance of a $233,644 promissory note in July 2025, indicating a need for immediate debt capital to sustain operations.
• Potential for Shareholder Dilution [medium — financial]: Significant increases in authorized shares and shares reserved for equity incentives pose a risk of substantial dilution to existing shareholders. Authorized common stock increased from 20,000,000 to 30,000,000, and the equity incentive plan shares grew by 5,000,000 to 7,500,000.
• Pre-Revenue Stage Operations [high — operational]: The company has consistently reported zero revenue, indicating a lack of commercial product sales. This prolonged pre-revenue status necessitates continuous funding for research, development, and operational expenses.
• Increasing Net Losses [medium — financial]: Net losses have increased for both the three-month period ($17,858 in Q3 2025 vs. $10,161 in Q3 2024) and the nine-month period ($16,916 in YTD Q3 2025 vs. $10,161 in YTD Q3 2024), suggesting rising operational costs without corresponding revenue generation.

Industry Context

KNOW LABS operates in the measuring and controlling devices sector (SIC 3829). This industry is characterized by innovation in sensor technology and data analytics. Companies in this space often require significant R&D investment and face competition from established players and emerging startups. The trend towards IoT and AI integration in measurement devices presents both opportunities and challenges for companies like KNOW LABS.

Regulatory Implications

As a publicly traded company, KNOW LABS must comply with SEC regulations, including timely and accurate financial reporting via 10-Q filings. Amendments to corporate governance documents like the Articles of Incorporation and equity plans require adherence to state corporate laws and shareholder approval processes. Failure to comply can result in penalties and reputational damage.

What Investors Should Do

1. Monitor future financing activities closely.
2. Assess the impact of potential share dilution.
3. Evaluate the timeline for revenue generation.

Key Dates

• 2025-06-30: End of Nine Months Reporting Period — Marks the end of the period for which financial results (zero revenue, net loss of $16,916) are reported in this 10-Q.
• 2025-07-01: Amendment to 2021 Equity Incentive Plan — Increased shares reserved for issuance by 5,000,000 to 7,500,000, providing more equity for compensation and potential future dilution.
• 2025-07-01: Issuance of Promissory Note — A $233,644 promissory note was issued, highlighting the company's reliance on debt financing to support operations.
• 2025-07-31: Amendment to Articles of Incorporation — Increased authorized common stock from 20,000,000 to 30,000,000 shares, allowing for greater capital raising potential but also increasing dilution risk.
• 2025-04-01: Conversion of Series C Preferred Stock — 2,702,444 shares of common stock were issued upon conversion, increasing the total number of outstanding shares.

Glossary

Pre-revenue stage

A phase in a company's lifecycle where it has not yet generated any sales revenue from its products or services. (KNOW LABS, INC. is currently in this stage, meaning its financial performance is solely based on expenses and financing, not sales.)

Equity Incentive Plan

A plan that allows a company to grant stock options or other equity-based awards to employees, directors, or consultants as a form of compensation. (The amendment to KNOW LABS' plan increases the number of shares available for such awards, impacting potential future dilution.)

Authorized Common Stock

The maximum number of shares of common stock that a corporation is legally permitted to issue, as specified in its Articles of Incorporation. (KNOW LABS increased its authorized shares, enabling it to issue more stock for financing or other corporate purposes.)

Promissory Note

A written promise by one party (the maker) to pay a specific sum of money to another party (the payee), either on demand or at a specified future date. (The issuance of a promissory note signifies debt financing for KNOW LABS, indicating a reliance on borrowed funds.)

Series C Preferred Stock

A class of preferred stock that has specific rights and preferences, often issued in later funding rounds. It can be convertible into common stock. (The conversion of Series C Preferred Stock into common stock by KNOW LABS increased its share count.)

Year-Over-Year Comparison

Compared to the previous year's filings, KNOW LABS continues to operate without generating revenue. The net losses for the comparable periods (three and nine months ended June 30) have increased, indicating a worsening financial performance on an operational basis. Key changes include significant corporate actions to increase authorized shares and equity incentive pool sizes, signaling a strategic focus on future capital raising and potential dilution, alongside a reliance on debt financing through a new promissory note.

Filing Details

This Form 10-Q (Form 10-Q) was filed with the SEC on August 5, 2025 regarding KNOW LABS, INC. (USBC).

View full filing on EDGAR

View Full Filing

View this 10-Q filing on SEC EDGAR