KNW.Know Labs, INC
DEF 14A: Know Labs, Inc. Announces 2024 Annual Meeting of Stockholders
Sentiment:
Proxy Statement
Know Labs, Inc. will hold its 2024 Annual Meeting of Stockholders virtually on September 26, 2024, to vote on director elections, auditor ratification, share issuance authorization, and executive compensation.
Capital raiseThe company entered into a securities purchase agreement with Lind Global Fund II, LP, pursuant to which it may issue senior convertible notes up to $14,400,000.The company issued an initial note with an outstanding principal amount of $4,800,000 in exchange for a purchase price of $4,000,000, convertible into shares of common stock at an initial conversion price of $1.00 per share.The company also issued an initial warrant to purchase up to 6,000,000 shares of common stock at an initial exercise price of $0.80 per share.The company received net proceeds of $3,805,699 in exchange for the issuance of the $4,800,000 initial notes and an initial warrant to purchase 6,000,000 shares of our common stock.
Summary
- Know Labs, Inc. is holding its 2024 Annual Meeting of Stockholders on September 26, 2024, at 1:30 p.m. Pacific time, as a virtual meeting.
- Stockholders of record as of July 30, 2024, are entitled to vote.
- The meeting will address the election of seven directors, ratification of BPM, LLP as the independent accounting firm, authorization for issuing shares related to the Lind Global Fund II LP agreement, and an advisory vote on executive compensation.
- The Board recommends voting 'FOR' all director nominees, ratifying the auditor, approving the share issuance, and approving executive compensation.
- As of July 30, 2024, there were 86,368,897 shares of common stock outstanding and 8,108,356 shares issuable upon conversion of preferred stock.
- The proxy materials are available online at www.virtualshareholdermeeting.com/KNW2024.
Sentiment
Score: 6
Explanation: The document is neutral in tone, primarily providing factual information about the annual meeting and proposals. The inclusion of related party transactions and past instances of late filings slightly lowers the sentiment.
Positives
- The company is providing greater access to the meeting by hosting it virtually.
- Stockholders can submit questions during the live Q&A session.
- The Board is actively engaged in risk oversight and corporate governance.
- The company has a code of ethics applicable to all directors, officers, and employees.
Negatives
- Phillip A. Bosua resigned as CEO on January 23, 2023, and received a $400,000 severance payment.
- The company incurred interest expense of $194,019 related to the extension of warrants with Clayton Struve.
- The company has related party transactions with directors and officers.
- The company has had instances of late filings of Form 4 by some directors.
Risks
- Failure to obtain stockholder approval for the share issuance to Lind Global Fund II, LP could limit the company's access to additional funding.
- Events of default under the Lind Global Fund II, LP agreement could result in accelerated payment obligations.
- The company's obligations under the Lind Global Fund II, LP notes are secured by a first-priority security interest in all of its assets.
- The company's market capitalization falling below $15 million for 10 consecutive days is an event of default under the Lind Global Fund II, LP agreement.
Future Outlook
The company anticipates using the net proceeds from the Lind Global Fund II, LP agreement for working capital and general corporate purposes.
Management Comments
- Ronald P. Erickson, Chairman and CEO, invites stockholders to attend the virtual meeting.
- The Company believes that a virtual stockholder meeting provides greater access to those who may want to attend and therefore has chosen this over an in-person meeting.
Industry Context
The document does not provide specific industry context beyond the general technology sector.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer | Phillip A. Bosua | Ronald P. Erickson | January 23, 2023 | Resignation |
Related Party Transactions
- The company has related party transactions with directors and officers, including convertible promissory notes, stock option grants, and warrant extensions.
- Ronald P. Erickson was paid deferred compensation of $165,000 during the year ended September 30, 2022.
- An entity affiliated with and controlled by Mr. Erickson, J3E2A2Z LP, was paid interest of $173,855 during the year ended September 30, 2023.
- As of the year ended September 30, 2023, we have paid ipCapital Group approximately $713,000 in professional fees.
Stakeholder Impact
- Stockholders have the opportunity to vote on key company decisions.
- Executive compensation and company performance are linked, impacting executive officers.
- The outcome of the vote on share issuance could affect the company's financial flexibility and access to capital.
Next Steps
- Stockholders are encouraged to vote on the proposals before the Annual Meeting.
- The company will hold the virtual Annual Meeting on September 26, 2024.
- The company will continue to seek stockholder approval for the share issuance to Lind Global Fund II, LP if the proposal is not approved at the Annual Meeting.
Key Dates
| Date | Description |
|---|---|
| August 14, 2017 | Issue date of Clayton A. Struve Warrant |
| December 12, 2017 | Issue date of Clayton A. Struve Warrant |
| February 28, 2018 | Issue date of Clayton A. Struve Warrant |
| July 30, 2018 | Stock option grant to Philip A. Bosua for 1,000,000 shares |
| November 4, 2019 | Stock option grant to Ronald P. Erickson for 1,200,000 shares |
| December 15, 2020 | Stock option grants to Ronald P. Erickson and Phillip A. Bosua |
| August 12, 2021 | Board approved and adopted the 2021 Plan |
| October 15, 2021 | Stockholders approved the 2021 Plan |
| December 16, 2021 | Stock option grant to Ronald P. Erickson for 1,000,000 shares |
| January 5, 2022 | Issued 30,000 shares each to three directors for services rendered during 2021 |
| May 20, 2022 | Peter J. Conley appointed as CFO and SVP Intellectual Property |
| September 16, 2022 | Common stock began trading on NYSE American under the symbol KNW |
| December 7, 2022 | Extension of Warrant Agreement with Clayton Struve |
| December 14, 2022 | Stock option grant to Ronald P. Erickson for 1,000,000 shares |
| January 23, 2023 | Phillip A. Bosua resigned as CEO; Ronald P. Erickson appointed CEO |
| February 15, 2023 | Issued stock option grants to two directors for a total of 50,000 shares |
| June 27, 2023 | Settled all cash dividends with respect to the Series D preferred stock accrued and accumulated through December 31, 2022 in exchange for the issuance to Mr. Struve of 1,402,784 shares of our common stock |
| February 27, 2024 | Entered into a securities purchase agreement with Lind Global Fund II, LP |
| July 30, 2024 | Record date for stockholders eligible to vote at the Annual Meeting |
| August 12, 2024 | Date of the proxy statement |
| August 13, 2024 | Mailing of the Notice, Proxy Statement and related materials to our stockholders |
| September 25, 2024 | Internet and telephone voting facilities for stockholders of record will close at 11:59 p.m., Eastern time |
| September 26, 2024 | Date of the 2024 Annual Meeting of Stockholders |
Keywords
Annual Meeting, Proxy Statement, Stockholders, Board of Directors, Executive Compensation, Director Election, Auditor Ratification, Share Issuance, Lind Global Fund II LP, Corporate Governance
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