Seattle-based Know Labs, Inc. (NYSE American: KNW), a company specializing in measuring and controlling devices, has announced significant changes following a special meeting of stockholders. On Monday, the company's stockholders approved an amendment to increase the authorized shares of common stock from 200 million to 300 million. This change, filed with the Nevada Secretary of State and effective immediately, aims to provide the company with greater flexibility for future corporate needs.
Additionally, stockholders voted to amend the 2021 Equity Incentive Plan, expanding the number of shares available for issuance to 40 million, with provisions for automatic increases and the inclusion of shares from previous plans. This amendment, initially approved by the board on September 11, 2024, and detailed in the company's proxy statement on October 7, 2024, is designed to attract, retain, and motivate officers, employees, and directors through incentive compensation opportunities linked to the company's stock performance.
The approved changes were part of a broader set of proposals presented during the special meeting on Monday. The meeting saw a quorum with proxies representing 57.7% of total eligible shares. The amendments to the Articles of Incorporation and the 2021 Plan passed with a majority of votes for, while a third proposal regarding the adjournment of the meeting to solicit additional proxies was also approved.
The equity incentive plan amendment allows for various awards, including stock options and restricted awards, and is overseen by the Compensation Committee of the Board. The plan's expansion reflects Know Labs' commitment to aligning the interests of its employees and directors with those of its stockholders.
These corporate governance updates come as Know Labs continues to evolve in the industrial applications and services sector. The information regarding these recent changes is based on a press release statement and the company's SEC filing.
In other recent news, Know Labs, Inc. has reported a series of significant developments. The company disclosed a Q3 net loss of $4.1 million for fiscal year 2024, marking an improvement from the previous year. In a recent financing round, Know Labs successfully raised $1.655 million, with Boustead Securities, LLC and The Benchmark Company, LLC serving as advisors.
The company has also made changes in its leadership, with the appointment of John Cronin as Interim Chief Technology Officer and Dominic Klyve, Ph.D., as Chief Science Officer. Concurrently, the company announced the resignation of Timothy Londergan from its Board of Directors and the appointment of Ichiro Takesako to its Audit Committee.
Know Labs has extended the maturity date of its debt from September 30, 2024, to September 30, 2025, and increased the interest rate on these notes from 6% to 8%. The company has been notified of non-compliance with NYSE American continued listing standards due to reported losses over recent fiscal years and is required to submit a compliance plan.
On the product development front, Know Labs is making progress with its non-invasive glucose monitor, KnowU, which is currently in clinical trials and awaiting FDA clearance. These developments reflect Know Labs' ongoing efforts to manage its financial challenges while working towards enhancing shareholder value and corporate visibility.
InvestingPro Insights
Know Labs' recent corporate governance changes come at a critical time for the company, as reflected in the latest financial data and market performance. According to InvestingPro data, Know Labs has a market capitalization of $22.68 million, indicating its small-cap status. The company's stock has experienced significant volatility, with a 6-month price total return of -67.91% and a year-to-date return of -58.74%, underscoring the challenges it faces.
InvestingPro Tips highlight that Know Labs is quickly burning through cash and suffers from weak gross profit margins. These factors may have influenced the decision to increase authorized shares, potentially providing more financial flexibility. The company's operating income stands at -$14.37 million for the last twelve months as of Q3 2024, suggesting ongoing profitability challenges.
Investors should note that analysts do not anticipate the company will be profitable this year, an InvestingPro Tip that aligns with the negative earnings per share of -$0.22 reported for the same period. The expansion of the equity incentive plan could be seen as a strategic move to retain talent despite these financial headwinds.
For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Know Labs, providing deeper insights into the company's financial health and market position.
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