SCHEDULE: Know Labs Shareholder Exits 5% Stake

A significant shareholder, Clayton A. Struve, has reduced his beneficial ownership in Know Labs, Inc. below 5% following a private placement and debt conversion.

Summary

• Clayton A. Struve, a reporting person, has filed an Amendment No. 1 to Schedule 13G, serving as an "exit filing."
• Struve's beneficial ownership in Know Labs, Inc. has decreased to 3.1% of the common stock, totaling 11,899,716 shares.
• This reduction is a direct result of the closing of a private placement by Know Labs, Inc. with Goldeneye 1995 LLC on August 6, 2025.
• As part of the private placement, Struve converted all outstanding Series C and Series D Preferred Stock into 7,569,299 shares of common stock.
• Accrued and unpaid dividends were also converted into an additional 764,141 shares of common stock.
• Outstanding debts and accrued but unpaid interest owed by Know Labs to Struve were converted, and partially repaid in cash, into 3,295,379 shares of common stock.
• Several notes and debentures held by Struve were extinguished in full, including a 10% Convertible Redeemable Note (September 30, 2016) and Senior Secured Convertible Redeemable Debentures (August 14, 2017; December 12, 2017; February 28, 2018).
• The total outstanding common stock of Know Labs, Inc. was 384,234,130 shares as of August 7, 2025.

Sentiment

Score: 7

Explanation: The extinguishment of significant debt and preferred stock through conversion to common equity is a positive step for Know Labs, Inc.'s balance sheet and capital structure. While the reporting person's stake is diluted, this is a consequence of a capital raise event, which generally strengthens the company.

Positives

• Know Labs, Inc. successfully completed a private placement, indicating capital infusion or restructuring.
• Significant outstanding debts and accrued interest owed to Clayton A. Struve were extinguished through conversion to common stock and partial cash repayment, improving the company's balance sheet by reducing liabilities.
• Several specific convertible notes and debentures were fully extinguished, simplifying the company's debt structure.

Risks

• The filing does not explicitly mention specific risks. However, private placements often involve dilution for existing shareholders not participating, which can be a risk to per-share value.

Future Outlook

The filing does not provide forward-looking statements or guidance, focusing solely on the change in beneficial ownership and the underlying transactions.

Industry Context

This filing reflects a capital restructuring event for Know Labs, Inc., involving a private placement and conversion of debt and preferred equity into common stock. Such transactions are common for companies seeking to strengthen their balance sheet, reduce debt obligations, or raise capital, particularly in growth-oriented or technology sectors where non-dilutive financing may be limited.

Comparison to Industry Standards

• Not applicable. This filing is a disclosure of a change in beneficial ownership and related transactions for a specific company, not a performance report that can be directly compared to industry benchmarks or competitors' results.

Related Party Transactions

• The conversion of Clayton A. Struve's preferred stock and debt into common stock, and partial cash repayment, occurred in connection with the private placement. Given Struve's prior significant ownership and debt holdings, these transactions could be considered related party dealings, although the filing does not explicitly label them as such.

Stakeholder Impact

• Shareholders: Existing shareholders not participating in the private placement likely experienced dilution due to the issuance of new common stock. The conversion of debt to equity reduces financial leverage, which can be positive for equity holders in the long term.
• Creditors: The extinguishment of specific notes and debentures held by Clayton A. Struve reduces the company's overall debt burden.

Next Steps

• The filing does not explicitly mention future actions or milestones beyond the completion of the private placement.

Key Dates

Recommendation

The filing indicates a capital restructuring event where debt and preferred equity are converted into common stock, which is generally positive for the company's balance sheet by reducing liabilities. However, the dilution for existing shareholders from the private placement needs to be considered. Without further financial details on the private placement's terms or the company's operational performance, a 'hold' recommendation is prudent, awaiting more comprehensive financial disclosures to assess the full impact of these capital structure changes.

Keywords

Know Labs, KNLB, SEC filing, Schedule 13G, beneficial ownership, private placement, debt conversion, equity financing, common stock, preferred stock, warrants, shareholder, investment, corporate finance