KNOW LABS Seeks 9,900% Stock Increase, Private Placement Approval
Ticker: USBC · Form: DEF 14A · Filed: Jun 30, 2025 · CIK: 1074828
| Field | Detail |
|---|---|
| Company | Know Labs, Inc. (USBC) |
| Form Type | DEF 14A |
| Filed Date | Jun 30, 2025 |
| Risk Level | high |
| Sentiment | bearish |
Sentiment: bearish
Topics: Stock Dilution, Corporate Governance, Equity Incentive Plan, Private Placement, Change of Control, Shareholder Meeting, Capital Structure
Related Tickers: USBC
TL;DR
**KNOW LABS is gearing up for massive dilution and a potential change of control, so buckle up for volatility or bail out now.**
AI Summary
KNOW LABS, INC. (USBC) is seeking stockholder approval for a significant increase in authorized common stock from 7,500,000 to 750,000,000 shares, a 9,900% increase, to facilitate future capital raises and strategic transactions. The company also proposes to approve the issuance of common stock representing over 19.99% of outstanding shares to Goldeneye 1995 LLC via a private placement, which could result in a change of control, as per NYSE American Rules 713(a)(ii) and 713(b). Furthermore, KNOW LABS aims to amend its 2021 Equity Incentive Plan to increase shares authorized for issuance by 48,950,000 shares, indicating a focus on executive and employee compensation. These proposals, to be voted on at a virtual Special Meeting on July 24, 2025, are critical for the company's financial flexibility and potential dilution. The company's business address is 619 Western Avenue, Suite 610, Seattle, WA 98104, and its phone number is 206-903-1351.
Why It Matters
This DEF 14A filing is crucial for KNOW LABS investors as it signals massive potential dilution and a significant shift in capital structure. The proposed 9,900% increase in authorized common stock from 7.5 million to 750 million shares, alongside a private placement that could trigger a change of control with Goldeneye 1995 LLC, suggests the company is preparing for substantial future financing or strategic partnerships. For employees, the 48,950,000 share increase in the 2021 Equity Incentive Plan could mean more equity compensation, potentially aligning interests but also contributing to dilution. Competitively, this move could enable KNOW LABS to fund R&D or acquisitions, impacting its position in the measuring and controlling devices sector.
Risk Assessment
Risk Level: high — The risk level is high due to the proposed 9,900% increase in authorized common stock from 7,500,000 to 750,000,000 shares, which could lead to severe dilution for existing shareholders. Additionally, the private placement with Goldeneye 1995 LLC involves issuing shares representing more than 19.99% of common stock outstanding and could result in a change of control, introducing uncertainty regarding future management and strategic direction.
Analyst Insight
Investors should carefully evaluate the potential for significant dilution and the implications of a change of control. Consider voting against the Authorized Common Stock Increase Proposal and the Private Placement Proposal if you are concerned about your ownership stake being severely diluted or if you prefer current management.
Key Numbers
- 750,000,000 — Proposed Authorized Common Stock (Represents a 9,900% increase from 7,500,000 shares)
- 48,950,000 — Additional Shares for 2021 Equity Incentive Plan (Significantly expands potential equity compensation)
- 19.99% — Threshold for Private Placement Approval (Issuance to Goldeneye 1995 LLC exceeds this, requiring stockholder vote)
- 2025-06-30 — Filing Date (Date the DEF 14A was filed)
- 2025-07-24 — Special Meeting Date (Date stockholders will vote on proposals)
Key Players & Entities
- KNOW LABS, INC. (company) — Registrant seeking stockholder approval
- Goldeneye 1995 LLC (company) — Party in a private placement that could lead to a change of control
- NYSE American (regulator) — Exchange whose rules (713(a)(ii) and 713(b)) govern the private placement
- 7,500,000 (dollar_amount) — Current number of authorized shares of common stock
- 750,000,000 (dollar_amount) — Proposed new number of authorized shares of common stock
- 19.99% (dollar_amount) — Threshold for common stock issuance requiring stockholder approval under NYSE American rules
- 48,950,000 (dollar_amount) — Additional shares proposed for the 2021 Equity Incentive Plan
- June 6, 2025 (date) — Date of the Securities Purchase Agreement with Goldeneye 1995 LLC
- July 24, 2025 (date) — Date of the virtual Special Meeting of stockholders
- 619 Western Avenue, Suite 610, Seattle, WA 98104 (address) — Business address of KNOW LABS, INC.
FAQ
What is KNOW LABS, INC. proposing to change regarding its common stock?
KNOW LABS, INC. is proposing to amend its Articles of Incorporation to increase the number of authorized shares of common stock from 7,500,000 to 750,000,000 shares, representing a 9,900% increase.
What is the purpose of the private placement mentioned in the KNOW LABS filing?
The private placement involves the issuance of common stock representing more than 19.99% of common stock outstanding as of June 6, 2025, to Goldeneye 1995 LLC, and is subject to stockholder approval due to NYSE American Rules 713(a)(ii) and 713(b).
When is the Special Meeting for KNOW LABS stockholders?
The Special Meeting of KNOW LABS stockholders will be held virtually at 1:30 P.M., Pacific Time, on Thursday, July 24, 2025, at www.virtualshareholdermeeting.com/KNW2025SM.
What are the implications of the proposed increase in the 2021 Equity Incentive Plan for KNOW LABS?
KNOW LABS is seeking to increase the number of shares of Common Stock authorized for issuance under the 2021 Plan by 48,950,000 shares, which could be used for executive and employee compensation but also contributes to potential dilution.
Could the private placement with Goldeneye 1995 LLC lead to a change of control at KNOW LABS?
Yes, the Private Placement Proposal specifically asks stockholders to approve the change of control resulting from the issuance of shares to Goldeneye 1995 LLC, in accordance with NYSE American Rules.
What is the business address and phone number for KNOW LABS, INC.?
The business address for KNOW LABS, INC. is 619 Western Avenue, Suite 610, Seattle, WA 98104, and their business phone number is 206-903-1351.
Why does KNOW LABS need stockholder approval for the private placement?
KNOW LABS needs stockholder approval for the private placement because it involves issuing shares representing more than 19.99% of common stock outstanding and could result in a change of control, both of which trigger requirements under NYSE American Rules 713(a)(ii) and 713(b).
What was KNOW LABS, INC. formerly known as?
KNOW LABS, INC. was formerly known as VISUALANT INC, Visualant, INC, and STARBERRYS CORP, with the most recent name change from VISUALANT INC occurring on February 20, 2007.
What is the primary risk for current stockholders if the Authorized Common Stock Increase Proposal passes for KNOW LABS?
The primary risk for current stockholders if the Authorized Common Stock Increase Proposal passes is significant dilution of their ownership stake, as the number of authorized shares would increase from 7,500,000 to 750,000,000, allowing for a substantial increase in outstanding shares.
How can KNOW LABS stockholders attend and vote at the Special Meeting?
KNOW LABS stockholders can attend the virtual Special Meeting at www.virtualshareholdermeeting.com/KNW2025SM by entering the control number from their proxy card. They can vote during the meeting by following instructions on the website.
Risk Factors
- Significant Increase in Authorized Shares [high — financial]: The company is proposing a 9,900% increase in authorized common stock from 7,500,000 to 750,000,000 shares. This is to facilitate future capital raises and strategic transactions, but it carries a substantial risk of dilution for existing shareholders.
- Private Placement and Potential Change of Control [high — financial]: Approval is sought for a private placement of common stock to Goldeneye 1995 LLC, representing over 19.99% of outstanding shares. This transaction could result in a change of control, impacting existing governance and strategic direction.
- Expansion of Equity Incentive Plan [medium — financial]: The company plans to amend its 2021 Equity Incentive Plan to add 48,950,000 shares. This significant increase in shares available for equity compensation could lead to further dilution if not managed carefully.
Industry Context
Know Labs, Inc. operates in the measuring and controlling devices sector, specifically focusing on technology related to sensing and data acquisition. This industry is characterized by rapid technological advancements, significant R&D investment, and a competitive landscape with both established players and emerging innovators. Companies in this space often rely on intellectual property and strategic partnerships to gain market share.
Regulatory Implications
The proposed increase in authorized shares and the private placement exceeding 19.99% of outstanding stock trigger specific NYSE American listing rules requiring stockholder approval. Failure to obtain approval could prevent the company from executing its planned capital raises and strategic transactions, impacting its financial flexibility and growth prospects.
What Investors Should Do
- Review the full DEF 14A filing carefully.
- Evaluate the potential for dilution.
- Consider the implications of a potential change of control.
- Vote your shares at the Special Meeting on July 24, 2025.
Key Dates
- 2025-06-30: Filing of DEF 14A — This document provides detailed information about the proposals to be voted on at the special meeting and is a key disclosure for investors.
- 2025-07-24: Special Meeting of Stockholders — Stockholders will vote on critical proposals including a massive increase in authorized shares, a private placement, and an amendment to the equity incentive plan.
- 2025-06-06: Securities Purchase Agreement with Goldeneye 1995 LLC — This agreement outlines the terms of the private placement that requires stockholder approval due to its size and potential change of control implications.
Glossary
- DEF 14A
- A Definitive Proxy Statement filed with the SEC by a company seeking shareholder approval for certain corporate actions. (This is the document containing the proposals that shareholders will vote on at the special meeting.)
- 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. (The company is seeking to dramatically increase this number, which is a core proposal at the special meeting.)
- Private Placement
- The sale of securities directly to a small group of institutional or accredited investors, rather than through a public offering. (A significant private placement is proposed, requiring shareholder approval due to its size and potential impact on control.)
- Change of Control
- A transaction or event that results in a change in the majority ownership or effective control of a company. (The proposed private placement may trigger a change of control, necessitating shareholder approval under NYSE American rules.)
- 2021 Equity Incentive Plan
- A plan established by the company to grant stock options, restricted stock, or other equity awards to employees and executives. (The company proposes to increase the number of shares available under this plan, impacting future equity compensation and potential dilution.)
Year-Over-Year Comparison
This filing is a proxy statement for a special meeting, not an annual report, and therefore direct year-over-year financial metric comparisons are not applicable. The focus is on proposed corporate actions rather than reporting past financial performance. The key information relates to future strategic financial maneuvers, including a substantial increase in authorized shares and a significant private placement, which are critical for the company's forward-looking plans.
Filing Details
This Form DEF 14A (Form DEF 14A) was filed with the SEC on June 30, 2025 regarding KNOW LABS, INC. (USBC).