Business Context and Reporting Period
This Form 8-K Current Report, filed on August 13, 2024, covers events occurring between August 7 and August 9, 2024, for Know Labs, Inc. (KNW). The filing details the entry into a material definitive agreement for a registered public offering of units consisting of common stock and warrants.
Key Financial Metrics and Transaction Details
- Offering Structure: Sale of 13,250,000 units at $0.26 per unit. Each unit includes one share of common stock and one warrant to purchase one share at $0.26.
- Gross Proceeds: Approximately $3.445 million from the base offering. Total proceeds could reach approximately $3.961 million if the over-allotment option is fully exercised.
- Over-Allotment: A 30-day option for up to 1,987,500 additional units was granted. On August 8, 2024, underwriters partially exercised this option to purchase 1,987,500 warrants only.
- Underwriting Compensation: Underwriters purchased units at a 7.0% discount to the public offering price. Additionally, the company granted underwriters options to purchase 7.0% of the units issued at the public offering price ($0.26), exercisable 180 days after August 7, 2024, and expiring August 7, 2029.
- Closing Date: The offering closed on August 9, 2024.
Material Changes and Agreements
The primary material change is the execution of the Underwriting Agreement with Boustead Securities, LLC and The Benchmark Company, LLC. Key contractual terms include:
- Lock-Up Period: The Company is restricted from selling or disposing of common stock for three months post-closing. Directors and executive officers are restricted for six months.
- Right of First Refusal: Underwriters have a 12-month right of first refusal to act as lead investment bankers for future equity, equity-linked, or debt offerings (excluding commercial bank debt).
- Warrant Agency: Equiniti Trust Company, LLC was appointed as the warrant agent via an agreement dated August 9, 2024.
Outlook, Risks, and Management Commentary
The filing does not provide specific forward-looking financial guidance, revenue projections, or management commentary regarding operational outlook. The document focuses strictly on the mechanics of the capital raise. Risks are limited to standard indemnification clauses where the Company agrees to indemnify underwriters for liabilities arising from the Offering under the Securities Act of 1933.
Investor Verification Checklist
- Verify the final net proceeds after deducting the 7.0% underwriting discount and other offering expenses.
- Confirm the exact number of shares issued upon the partial exercise of the over-allotment option (warrants only were purchased).
- Review the full Underwriting Agreement (Exhibit 1.1) for specific termination provisions and conditions to closing.
- Monitor the Company's compliance with the 3-month lock-up period for the Company and 6-month period for insiders.
- Check subsequent filings for the exercise of the remaining over-allotment option for shares (if any) within the 30-day window.