Know Labs (KNW) insider report: 335K grant and 2M-share Series H conversion
Rhea-AI Filing Summary
Know Labs (KNW) Form 4 reports insider equity awards and a preferred share redemption tied to an entity affiliated with Director Ronald P. Erickson. On 08/06/2025 Mr. Erickson was granted 335,000 shares of common stock, with 50% vested immediately and the remainder vesting in eight quarterly installments (first two installments vest six months after the grant); restricted shares vest in full on a sale of substantially all sensor-related IP or on involuntary termination.
The filing also discloses redemption of 16,916 shares of Series H convertible preferred held by J3E2A2Z, resulting in a cash payment to that affiliate of $654,276.15 and the issuance of 2,000,000 common shares at a conversion price of $0.335. Following the transactions Mr. Erickson beneficially owns 472,202 shares directly and 2,000,000 indirectly; outstanding warrants total 97,367 underlying shares.
Positive
- 335,000-share award granted with 50% immediately vested and the remainder subject to defined quarterly vesting.
- Redemption terms disclosed: 16,916 Series H preferred redeemed for cash and issuance of common stock, with specifics on cash paid and shares issued.
- Filing executed and signed, providing timely disclosure of insider transactions.
Negative
- Issuance of 2,000,000 common shares to an affiliate (Series H conversion) increases outstanding common stock and is dilutive.
- Outstanding warrants totaling 97,367 underlying shares (21,375 + 25,992 + 50,000) may cause further dilution if exercised.
- Portion of the 335,000 award remains unvested, creating potential future overhang until vesting completes.
Insights
TL;DR: Director awarded 335,000 shares (50% immediately vested) and an affiliate received 2,000,000 shares via Series H redemption.
The Form 4 documents a sizable insider equity grant combined with a preferred redemption that produced 2,000,000 newly issued common shares to an affiliate of the reporting person. The grant structure (50% immediate vesting, remainder over eight quarters with acceleration on specified events) aligns executive incentives with retention and transactional outcomes. The 2,000,000-share issuance and existing warrants increase potential dilution; investors should note the explicit numbers disclosed.
TL;DR: Award contains standard vesting and change-of-control/involuntary-termination acceleration; affiliate conversion produced material share issuance.
The disclosure shows clear vesting triggers and acceleration provisions for restricted shares, which is standard governance practice for director remuneration tied to corporate milestones. Separately, the redemption of 16,916 Series H preferred producing 2,000,000 common shares and a cash payment of $654,276.15 to the affiliated entity is a material related-party capital effect disclosed in the filing. The filing is properly signed and dated, providing required transparency on the transactions and outstanding derivatives.
Insider Trade Summary
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Other | Series H Convertible Preferred Stock | 16,916 | $0.00 | -- |
| Grant/Award | Common Stock | 335,000 | $0.00 | -- |
| Other | Common Stock | 2,000,000 | $0.00 | -- |
| holding | Warrant to Purchase Common Stock | -- | -- | -- |
| holding | Warrant to Purchase Common Stock | -- | -- | -- |
| holding | Warrant to Purchase Common Stock | -- | -- | -- |
Footnotes (1)
- On August 6, 2025 (the "Grant Date"), the Reporting Person was awarded 335,000 shares of common stock of the Issuer, 50% of which is fully vested on the Grant Date and the remainder of which (the "restricted shares") will vest in 8 quarterly installments with the first two installments vesting six months after the Grant Date. The restricted shares vest in full in the event of a sale of all or substantially all of the Company's sensor related intellectual property or an involuntary termination of Mr. Erickson's employment. Includes unvested restricted shares. On the Grant Date, the Issuer redeemed 16,916 shares of Series H Convertible Preferred Stock held by J3E2A2Z (as defined below) for a combination of cash and common stock at a redemption price equal to the stated value of $70, plus all accrued and unpaid dividends in an amount of $140,210.15, resulting in (i) a cash payment to J3E2A2Z of $654,276.15 in the aggregate and (ii) the issuance to J3E2A2Z of 2,000,000 shares of common stock in the aggregate, at a conversion price of $0.335 per share. Held by J3E2A2Z Limited Partnership ("J3E2A2Z"), an entity affiliated with Ronald P. Erickson. Price subject to adjustment.
