Nevada
|
90-0273142
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
|
3920
|
|
(Primary Standard Industrial Classification Number)
|
500
Union Street, Suite 810, Seattle, Washington
USA
|
98101
|
(Address of principal executive offices)
|
(Zip Code)
|
|
206-903-1351
|
|
|
(Registrant's telephone number, including area
code)
|
|
|
N/A
|
|
|
(Former name, address, and fiscal year, if changed since last
report)
|
|
Large
accelerated filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
filer (Do not check if a smaller reporting company)
|
☐
|
Smaller
reporting company
|
☒
|
Emerging
growth company
|
☐
|
|
|
Title of Each Class of Securities to be
Registered
|
Amount to be
Registered (1)
|
Proposed Maximum
Offering
Price Per Unit (2)
|
Proposed Maximum
Aggregate
Offering Price
|
Amount of
Registration Fee
|
|
|
|
|
|
Common
Stock, $0.001 par value per share, underlying the Principal of 8%
Unsubordinated Convertible Notes (3)
|
5,639,500
|
$1.75
|
$9,869,125
|
$1,281.01
|
|
|
|
|
|
Common
Stock, $0.001 par value per share, underlying the Interest of 8%
Unsubordinated Convertible Notes (3)
|
451,160
|
1.75
|
789,530
|
102.48
|
|
|
|
|
|
Common
Stock, $0.001 par value per share, issuable upon exercise of
Investor Warrants (3)
|
2,819,750
|
1.75
|
4,934,563
|
640.51
|
|
|
|
|
|
Common
Stock, $0.001 par value per share, issuable upon exercise of
Placement Agent Private Placement Offering Warrants
(4)
|
615,675
|
1.75
|
1,077,431
|
139.85
|
Total
|
9,526,085
|
$1.75
|
$16,670,649
|
$2,163.85
|
|
|
Page
|
|
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|
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|
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Executive and Director Compensation |
|
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Index
to Financial Statements
|
|
F-1
|
Securities
offered:
|
|
9,526,085
shares of common stock, which
includes:
(i) up to 5,639,750 shares of
common stock underlying the principal, and up to 451,160
shares underlying the interest
accrued, of registrants 8% Unsubordinated Convertible Notes (the
“Notes”), which have a conversion price that is the
lesser of $1.00 per share or a twenty five percent (25%) discount
to the price per share paid by investors a future Qualified
Financing (the “Shares”)
(ii) up to 2,819,750 shares
(the "Investor Warrant Shares") of common stock issuable upon the
exercise of outstanding investor's warrants (the "Investor
Warrants") at an exercise price of $1.20 that were previously
issued to the Selling Shareholders in connection with the Notes
Offering that closed in a series of closings between October
17, 2019 and June 24, 2020.
(iii)
615,675 shares of our common
stock issuable upon the exercise of outstanding placement agent
warrants (the “Placement Agent Warrants”) at an
exercise price of $1.20 per share that were previously issued to
Boustead Securities, LLC and its assigns (collectively
“Placement Agent”) pursuant to an engagement agreement
dated November 6, 2018 (the “Boustead Offering Engagement
Agreement”) which provides that the Placement Agent shall
receive that certain number of warrants to purchase the common
stock of the Company equal to the number of warrants issued under
the 8% Unsubordinated Convertible Note Offering (the
“Offering”).
Our
Common Stock is described in further detail in the section of the
prospectus titled “DESCRIPTION OF
SECURITIES”
|
Common
stock outstanding before the offering (1):
|
|
23,876,245
shares
|
Common
stock to be outstanding after this offering (2):
|
|
33,402,330
shares
|
Use of
Proceeds:
|
|
We will not receive any of the proceeds from the sale of shares of
common stock by the Selling Stockholders. Upon exercise of the
Investor Warrants, however, we will receive up to $1.20 per share
or such lower price as may result from the anti-dilution protection
features of such warrants. Any proceeds received from the exercise
of such warrants will be used for general working capital and other
corporate purposes.
|
Terms
of Warrants:
|
|
The
Investor Warrants and Placement Agent Warrants entitles the holder
thereof to purchase one common share at an exercise price or $1.20
per full share, for a five year period after the date of issuance
(between October 2024-June 2025). The price per Warrant Share shall
be subject to adjustment for stock splits, combinations, and
similar recapitalization events and anti-dilution protection
features.
|
Risk
Factors:
|
|
An investment in our common stock involves a high degree of risk.
You should carefully consider the risk factors set forth under the
"Risk Factors" section hereunder and the other information
contained in this prospectus before making an investment decision
regarding our common stock. Our common stock should not be
purchased by investors who cannot afford the loss of their entire
investment.
|
OTCQB
Symbol:
|
|
Our
common stock is currently quoted on the OTCQB (the
“OTCQB”) under the symbol
“KNWN”.
|
Reverse
Split:
|
|
On June
17, 2015, we effected a 1-for-150 reverse stock split of our common
stock. All warrant, option, share and per share information in this
prospectus gives retroactive effect to the 1-for-150 split with all
numbers rounded up to the nearest whole share.
|
|
Six Months
Ended,
March
31,
|
Years Ended
September 30,
|
||||
|
2020
|
2019
|
2018
|
2017
|
2016
|
2015
|
|
|
|
|
|
|
|
STATEMENT OF
OPERATIONS DATA:
|
|
|
|
|
|
|
Net
revenue
|
$122
|
$1,805
|
$4,303
|
$4,874
|
$6,024
|
$6,291
|
Cost of goods
sold
|
70
|
1,378
|
3,482
|
3,966
|
5,036
|
5,274
|
Gross
profit
|
52
|
427
|
821
|
908
|
988
|
1,017
|
Research and
development expenses
|
938
|
1,258
|
570
|
79
|
326
|
363
|
General and
administrative expenses
|
2,543
|
4,182
|
2,509
|
3,088
|
3,355
|
2,984
|
Impairment of
goodwill
|
-
|
-
|
-
|
984
|
-
|
-
|
Operating
loss
|
(3,429)
|
(5,013)
|
(2,258)
|
(3,243)
|
(2,693)
|
(2,330)
|
Other income
(expense)
|
(2,917)
|
(2,599)
|
(1,000)
|
(658)
|
947
|
(271)
|
Net
loss
|
(6,346)
|
(7,612)
|
(3,258)
|
(3,901)
|
(1,746)
|
(2,601)
|
Income taxes
current benefit
|
-
|
-
|
-
|
-
|
-
|
30
|
Net
loss
|
$(6,346)
|
$(7,612)
|
$(3,258)
|
$(3,901)
|
$(1,746)
|
$(2,631)
|
Net loss per
share
|
$(0.33)
|
$(0.42)
|
$(0.38)
|
$(1.01)
|
$(1.22)
|
$(2.33)
|
Weighted average
number of shares
|
19,412,240
|
18,053,848
|
8,630,891
|
3,844,840
|
1,428,763
|
1,131,622
|
Period Ended
|
High
|
Low
|
Year Ending September 30, 2020
|
|
|
Through
June 28, 2020
|
$2.65
|
$0.81
|
March
31, 2020
|
$2.90
|
$0.90
|
December
31, 2019
|
$1.95
|
$0.92
|
|
|
|
Year Ending September 30, 2019
|
|
|
September
30, 2019
|
$1.70
|
$1.20
|
June
30, 2019
|
$2.00
|
$1.26
|
March
31, 2019
|
$2.97
|
$0.90
|
December
31, 2018
|
$4.44
|
$0.85
|
|
|
|
Year Ending September 30, 2018
|
|
|
September
30, 2018
|
$5.71
|
$0.62
|
June
30, 2018
|
$0.65
|
$0.24
|
March
31, 2018
|
$0.36
|
$0.21
|
December
31, 2017
|
$0.44
|
$0.20
|
|
|
|
Year Ending September 30, 2017
|
|
|
September
30, 2017
|
$0.25
|
$0.11
|
June
30, 2017
|
$0.70
|
$0.23
|
March
31, 2017
|
$0.99
|
$0.54
|
December
31, 2016
|
$1.44
|
$0.66
|
|
|
|
Assumed
public offering price per share
|
|
$1.750
|
Pro
forma net tangible book value per share as of March 31,
2020
|
$(0.135)
|
|
Increase
in net tangible book value per share attributable to this
offering
|
$0.165
|
|
Pro
forma as adjusted net tangible book value per share after this
offering
|
|
$0.030
|
Amount
of dilution in net tangible book value per share to new investors
in this offering
|
|
$1.720
|
Contractual Cash
Obligations (1)
|
Total
|
Less Than 1
Year
|
1-3
Years
|
3-5
Years
|
Greater Than 5
Years
|
Operating
leases
|
$209,957
|
$133,996
|
$75,961
|
$-
|
$-
|
Convertible notes
payable
|
3,402,606
|
3,402,606
|
-
|
-
|
-
|
|
$3,612,563
|
$3,536,602
|
$75,961
|
$-
|
$-
|
Contractual Cash
Obligations (1)
|
Total
|
Less Than 1
Year
|
1-3
Years
|
3-5
Years
|
Greater Than 5
Years
|
Operating
leases
|
$270,008
|
$133,996
|
$136,012
|
$-
|
$-
|
Convertible notes
payable
|
6,497,581
|
6,497,581
|
-
|
-
|
-
|
Capital
expenditures
|
-
|
-
|
-
|
-
|
-
|
|
$6,767,589
|
$6,631,577
|
$136,012
|
$-
|
$-
|
Name
|
|
Age
|
|
Director/
Executive Officer
|
Directors-
|
|
|
|
|
Ronald
P. Erickson
|
|
76
|
|
Chairman
and Interim Chief Financial Officer (1)
|
Phillip
A. Bosua
|
|
46
|
|
Chief
Executive Officer and Director
|
Jon
Pepper
|
|
69
|
|
Director
(2)
|
Ichiro
Takesako
|
|
61
|
|
Director
|
William
A. Owens
|
|
80
|
|
Director
(3)
|
June 2008:
|
appointed as General Manager of Sales and Marketing Department of
Micro Technology Division
|
April 2009:
|
appointed as General Manager of Overseas Business Department of
Micro Technology Division, in charge of M&A activity of
certain business segment and assets of Aviza Technology,
Inc.
|
July 2010:
|
appointed as Executive Director of SPP Process Technology Systems,
100% owned subsidiary of Sumitomo Precision Products then,
stationed in Newport, Wales
|
August 2011:
|
appointed as General Manager, Corporate Strategic Planning
Group
|
January 2013:
|
appointed as Chief Executive Officer of M2M Technologies, Inc., a
company invested by Sumitomo Precision products
|
April 2013:
|
appointed as General Manager of Business Development Department, in
parallel of CEO of M2M Technologies, Inc.
|
April 2014:
|
relieved from General Manager of Business Development Department
and is responsible for M2M Technologies Inc. as its
CEO
|
Audit
|
|
Compensation
|
|
Nominations and Corporate Governance
|
Jon
Pepper (Chairman)
|
|
William
A. Owens (Chairman)
|
|
Ron
Erickson (Chairman)
|
William
A. Owens
|
|
Jon
Pepper
|
|
Phillip
A. Bosua
|
Ichiro
Takesako
|
|
Ichiro
Takesako
|
|
William
A. Owens
|
|
|
|
|
Jon
Pepper
|
Name
|
Principal
Position
|
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(3)
|
Option
Awards
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Salary-
|
|
|
|
|
|
|
|
|
Ronald P. Erickson
(1)
|
Chairman of the
Board and Interim Chief Financial Officer
|
9/30/2019
|
$188,750
|
$-
|
$102,000
|
$-
|
$-
|
$290,750
|
|
|
9/30/2018
|
$180,000
|
$-
|
$21,000
|
$-
|
$-
|
$201,000
|
|
|
|
|
|
|
|
||
Phillip A. Bosua
(2)
|
Chief Executive
Officer
|
9/30/2019
|
$233,750
|
$-
|
$-
|
$-
|
$-
|
$233,750
|
|
|
9/30/2018
|
$106,095
|
$-
|
$177,000
|
$1,280,000
|
$167,500
|
$1,730,595
|
Executive
Payments
Upon
Separation
|
For
Cause
Termination
on
9/30/2019
|
Early
or
Normal
Retirement
on
9/30/2019
|
Not For
Good
Cause
Termination
on
9/30/2019
|
Change
in
Control
Termination
on
9/30/2019
|
Disability
or
Death
on
9/30/2019
|
Compensation:
|
|
|
|
|
|
Base salary
(1)
|
$-
|
$-
|
$195,000
|
$195,000
|
$-
|
|
|
|
|
|
|
Performance-based
incentive compensation (2)
|
$-
|
$-
|
$17,000
|
$17,000
|
$-
|
Stock
options
|
$-
|
$-
|
$-
|
$-
|
$-
|
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
Health and welfare
benefits (3)
|
$-
|
$-
|
$36,000
|
$36,000
|
$-
|
Accrued vacation
pay
|
$-
|
$-
|
$51,000
|
$51,000
|
$-
|
|
|
|
|
|
|
Total
|
$-
|
$-
|
$299,000
|
$299,000
|
$-
|
Executive
Payments
Upon
Separation
|
For
Cause
Termination
on
9/30/2019
|
Early
or
Normal
Retirement
on
9/30/2019
|
Not For
Good
Cause
Termination
on
9/30/2019
|
Change
in
Control
Termination
on
9/30/2019
|
Disability
or
Death
on
9/30/2019
|
Compensation:
|
|
|
|
|
|
Base salary
(1)
|
$-
|
$-
|
$240,000
|
$240,000
|
$-
|
|
|
|
|
|
|
Performance-based
incentive compensation (2)
|
$-
|
$-
|
$-
|
$-
|
$-
|
Stock
options
|
$-
|
$-
|
$440,000
|
$440,000
|
$-
|
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
Health and welfare
benefits (3)
|
$-
|
$-
|
$21,600
|
$21,600
|
$-
|
Accrued vacation
pay
|
$-
|
$-
|
$-
|
$-
|
$-
|
|
|
|
|
|
|
Total
|
$-
|
$-
|
$701,600
|
$701,600
|
$-
|
Name
|
Stock
Awards
|
Option
Awards
(3)
|
Other
Compensation
|
Total
|
Jon Pepper
(1)
|
$-
|
$137,346
|
$-
|
$137,346
|
Ichiro Takesako
(2)
|
-
|
137,346
|
-
|
137,346
|
William A.
Owens
|
-
|
-
|
-
|
-
|
|
|
|
|
|
Total
|
$-
|
$274,692
|
$-
|
$274,692
|
|
Shares
Beneficially Owned
|
|
|
Amount
|
Percentage
|
Directors and
Officers-
|
|
|
Ronald P. Erickson
(1)
|
8,089,015
|
26.5%
|
Phillip A. Bosua
(2)
|
3,505,000
|
14.5%
|
Jon Pepper
(3)
|
278,000
|
1.2%
|
Ichiro Takesako
(4)
|
190,000
|
*
|
William A. Owens
(5)
|
690,000
|
2.9%
|
Total Directors and
Officers (5 in total)
|
12,752,015
|
53.4%
|
|
Shares
Beneficially Owned
|
|
|
Amount
|
Percentage
|
Greater Than 5%
Ownership
|
|
|
|
|
|
Clayton A. Struve
(1)
|
21,558,075
|
49.5%
|
|
Blocker at
4.99%
|
|
|
|
|
Ronald P. Erickson
(2)
|
8,089,015
|
26.5%
|
|
|
|
Phillip
A. Bosua (3)
|
3,505,000
|
14.5%
|
|
|
|
Dale Broadrick
(4)
|
2,226,036
|
8.9%
|
|
|
|
|
Years
Ended,
|
|
|
September
30,
2019
|
September
30,
2018
|
|
|
|
REVENUE
|
$1,804,960
|
$4,303,296
|
COST OF
SALES
|
1,378,413
|
3,481,673
|
GROSS
PROFIT
|
426,547
|
821,623
|
RESEARCH AND
DEVELOPMENT EXPENSES
|
1,257,872
|
570,514
|
SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES
|
4,181,687
|
2,508,846
|
OPERATING
LOSS
|
(5,013,012)
|
(2,257,737)
|
|
|
|
OTHER INCOME
(EXPENSE):
|
|
|
Interest
expense
|
(2,945,312)
|
(1,195,329)
|
Other
income
|
(9,561)
|
25,160
|
Gain on debt
settlements
|
355,569
|
170,309
|
Total other income
(expense), net
|
(2,599,304)
|
(999,860)
|
|
|
|
LOSS BEFORE INCOME
TAXES
|
(7,612,316)
|
(3,257,597)
|
|
|
|
Income taxes -
current provision
|
-
|
-
|
|
|
|
NET
LOSS
|
$(7,612,316)
|
$(3,257,597)
|
|
|
|
Basic and diluted
loss per share
|
$(0.42)
|
$(0.38)
|
|
|
|
Weighted average
shares of common stock outstanding- basic and diluted
|
18,053,848
|
8,630,891
|
|
|
|
Series
B
|
|
|
|
|
|
|
|
|
|
|
|
Series A
Convertible
|
Redeemable
Convertible
|
Series C
Convertible
|
Series D
Convertible
|
|
|
Additional
|
|
Total
|
||||
|
Preferred
Stock
|
Preferred
Stock
|
Preferred
Stock
|
Preferred
Stock
|
Common
Stock
|
Paid
in
|
Accumulated
|
Stockholders'
|
|||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Amount
|
Amount
|
Capital
|
Deficit
|
(Deficit)
|
Balance as of September 30,
2017
|
23,334
|
$23
|
-
|
$-
|
1,785,715
|
$1,790
|
1,016,004
|
$1,015
|
4,655,486
|
$4,655
|
$27,565,453
|
$(31,533,727)
|
$(3,960,791)
|
Stock compensation expense -
employee options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
50,899
|
-
|
50,899
|
Issuance of common stock for
services
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,279,676
|
1,280
|
439,039
|
-
|
440,319
|
Issuance of Series D Convertible
Preferred Stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
817,802
|
-
|
817,802
|
Issuance of common stock for
conversion of liabilities
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,435,000
|
2,435
|
709,515
|
-
|
711,950
|
Issuance of common stock for
cash
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
7,000,000
|
7,000
|
1,743,000
|
-
|
1,750,000
|
Stock based compensation-
warrants
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
239,680
|
-
|
239,680
|
Issuance of common stock for
technology
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,000,000
|
2,000
|
518,000
|
-
|
520,000
|
Issuance of common stock for warrant
exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
158,026
|
158
|
79,989
|
-
|
80,147
|
Conversion of Series A Convertible
Preferred Stock
|
(3,334)
|
(12)
|
|
|
|
|
|
|
3,334
|
3
|
9
|
-
|
-
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,257,597)
|
(3,257,597)
|
Balance as of September 30,
2018
|
20,000
|
11
|
-
|
-
|
1,785,715
|
1,790
|
1,016,004
|
1,015
|
17,531,522
|
17,531
|
32,163,386
|
(34,791,324)
|
(2,607,591)
|
Stock compensation expense -
employee options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,141,674
|
-
|
1,141,674
|
Issuance of common stock for
services
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
245,000
|
245
|
348,655
|
-
|
348,900
|
Conversion of Series A Preferred
Stock
|
(20,000)
|
(11)
|
-
|
-
|
-
|
-
|
-
|
-
|
80,000
|
80
|
(69)
|
-
|
-
|
Beneficial conversion feature (Note
10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,857,960
|
-
|
2,857,960
|
Issuance of warrants to debt holders
(Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,384,530
|
|
1,384,530
|
Issuance of warrants for services
related to debt offering (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,072,095
|
|
1,072,095
|
Stock based compensation- warrant
issuances
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
117,458
|
-
|
117,458
|
Issuance of common stock for warrant
exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
509,656
|
510
|
(510)
|
-
|
(0)
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,612,316)
|
(7,612,316)
|
Balance as of September 30,
2019
|
-
|
$-
|
-
|
$-
|
1,785,715
|
$1,790
|
1,016,004
|
$1,015
|
$18,366,178
|
$18,366
|
$39,085,179
|
$(42,403,640)
|
$(3,297,290)
|
|
Years
Ended,
|
|
|
September
30,
2019
|
September
30,
2018
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
Net loss
|
$(7,612,316)
|
$(3,257,597)
|
Adjustments to reconcile net loss to
net cash (used in)
|
|
|
operating
activities
|
|
|
Depreciation and
amortization
|
259,347
|
132,615
|
Issuance of capital stock for
services and expenses
|
348,900
|
440,319
|
Stock based compensation-
warrants
|
117,458
|
239,680
|
Conversion of
interest
|
-
|
64,233
|
Stock based compensation- stock
option grants
|
1,141,674
|
50,899
|
Amortization of debt
discount
|
2,771,270
|
475,174
|
Conversion of accrued liabilities-
related parties to notes payable
|
-
|
491,802
|
Provision on loss on accounts
receivable
|
-
|
10,747
|
Issuance of common stock for
conversion of liabilities
|
-
|
199,935
|
Non cash gain on debt
settlements
|
(355,000)
|
(170,309)
|
Loss on sale of property and
equipment
|
32,777
|
-
|
Right of use,
net
|
2,610
|
-
|
Changes in operating assets and
liabilities:
|
|
|
Accounts
receivable
|
257,489
|
362,035
|
Prepaid expenses
|
13,705
|
7,547
|
Inventory
|
196,479
|
22,327
|
Other assets
|
(6,596)
|
(2,100)
|
Accounts payable - trade and accrued
expenses
|
(215,873)
|
(176,495)
|
Deferred revenue
|
(55,959)
|
(7,943)
|
NET CASH (USED IN) OPERATING
ACTIVITIES
|
(3,104,035)
|
(1,117,131)
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
Investment in research and
development equipment
|
(79,932)
|
(97,251)
|
NET CASH (USED IN) BY INVESTING
ACTIVITIES:
|
(79,932)
|
(97,251)
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
Repayments on line of
credit
|
(92,094)
|
(220,539)
|
Proceeds from convertible notes
payable
|
4,242,490
|
636,000
|
Proceeds from issuance of common/
preferred stock, net of costs
|
-
|
1,750,000
|
Issuance of common stock for warrant
exercise
|
-
|
80,147
|
Repayment of note
payable
|
-
|
(200,000)
|
NET CASH PROVIDED BY FINANCING
ACTIVITIES
|
4,150,396
|
2,045,608
|
|
|
|
NET INCREASE IN CASH AND CASH
EQUIVALENTS
|
966,429
|
831,226
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning
of period
|
934,407
|
103,181
|
|
|
|
CASH AND CASH EQUIVALENTS, end of
period
|
$1,900,836
|
$934,407
|
|
|
|
Supplemental disclosures of cash
flow information:
|
|
|
Interest paid
|
$22,521
|
$64,228
|
Taxes paid
|
$-
|
$-
|
|
|
|
Non-cash investing and financing
activities:
|
|
|
Beneficial conversion
feature
|
$2,857,960
|
$348,096
|
Related party accounts
converted to notes
|
$-
|
$1,184,066
|
Issuance of stock for
acquisition of technology
|
$-
|
$520,000
|
Penalty on notes
payable
|
$-
|
$75,000
|
Issuance of warrants to debt
holders
|
$1,384,530
|
$-
|
Issuance of warrants for services
related to debt offering
|
$1,072,095
|
$-
|
Cashless warant
exercise
|
$127,414
|
$-
|
|
Estimated
|
September
30,
|
September
30,
|
|
Useful Lives
|
2019
|
2018
|
Machinery
and equipment
|
2-10
years
|
$412,238
|
$332,306
|
Leasehold
improvements
|
2-3
years
|
3,612
|
276,112
|
Furniture
and fixtures
|
2-3
years
|
58,051
|
58,051
|
Software
and websites
|
3-
7 years
|
35,830
|
35,830
|
Less:
accumulated depreciation
|
|
(379,259)
|
(532,966)
|
|
$130,472
|
$169,333
|
|
Estimated
|
September 30,
|
September 30,
|
|
Useful Lives
|
2019
|
2018
|
|
|
|
|
Technology
|
3
years
|
$520,000
|
$520,000
|
Less:
accumulated amortization
|
|
(245,554)
|
(72,222)
|
Intangible
assets, net
|
|
$274,446
|
$447,778
|
Year
|
$
|
2019
|
$-
|
2020
|
133,996
|
2021
|
111,492
|
2022
|
24,520
|
2023
|
-
|
|
270,008
|
Imputer
interest
|
(23,872)
|
Total lease
liability
|
$246,136
|
|
September
30,
2019
|
September
30,
2018
|
Convertible
Redeemable Note – Clayton A. Struve
|
$1,071,000
|
$1,071,000
|
Convertible
Redeemable Note – J3E2A2Z LP
|
1,184,066
|
1,184,066
|
2019 Convertible
Notes
|
4,242,490
|
-
|
|
6,497,556
|
2,255,066
|
|
|
|
less debt discount
– beneficial conversion feature
|
(1,273,667)
|
-
|
less debt discount
– warrants
|
(616,729)
|
-
|
less debt discount
– warrants issued for services related to debt
offering
|
(652,919)
|
-
|
|
$3,954,241
|
$2,255,066
|
|
September
30,
|
September
30,
|
|
2019
|
2018
|
|
|
|
Capital Source
Business Finance Group
|
$-
|
$145,186
|
Total
debt
|
-
|
145,186
|
Less current
portion of long term debt
|
-
|
(145,186)
|
Long term
debt
|
$-
|
$-
|
Dividend yield
|
0%
|
Expected life
|
5 years
|
Expected volatility
|
180%-182%
|
Risk free interest rate
|
2.06%-2.52%
|
|
Weighted
Average
|
||
|
Options
|
Exercise
Price
|
$
|
Outstanding as of
September 30, 2017
|
15,404
|
$14.68
|
$226,059
|
Granted
|
2,180,000
|
1.683
|
3,668,500
|
Exercised
|
-
|
-
|
-
|
Forfeitures
|
(12,736)
|
14.764
|
(188,040)
|
Outstanding as of
September 30, 2018
|
2,182,668
|
1.698
|
3,706,519
|
Granted
|
2,870,000
|
2.615
|
7,504,850
|
Exercised
|
-
|
-
|
-
|
Forfeitures
|
(520,000)
|
(3.906)
|
(2,031,000)
|
Outstanding as of
September 30, 2019
|
4,532,668
|
$2.025
|
$9,180,369
|
|
|
Weighted
|
Weighted
|
|
Weighted
|
|
|
Average
|
Average
|
|
Average
|
Range of
|
Number
|
Remaining Life
|
Exercise Price
|
Number
|
Exercise Price
|
Exercise Prices
|
Outstanding
|
In Years
|
Outstanding
|
Exerciseable
|
Exerciseable
|
$0.250
|
530,000
|
0.50
|
$0.250
|
165,625
|
$0.25
|
1.28-1.50
|
1,860,000
|
3.83
|
1.35
|
360,000
|
1.28
|
|
60,000
|
4.56
|
1.85
|
12,083
|
1.84
|
|
2,080,000
|
4.08
|
3.08
|
20,000
|
4.20
|
|
2,668
|
0.50
|
14.25
|
1,334
|
13.50
|
|
4,532,668
|
3.70
|
$2.025
|
559,042
|
$1.122
|
|
2019
|
2018
|
U.S. operations
loss carry forward at statutory rate of 21%
|
$6,737,300
|
$6,142,138
|
Deferred tax assets
related to timing differences-accruals
|
192,897
|
-
|
Total
|
6,930,197
|
6,142,138
|
Less Valuation
Allowance
|
(6,930,197)
|
(6,142,138)
|
Net Deferred Tax
Assets
|
-
|
-
|
Change in Valuation
allowance
|
$(788,059)
|
$(337,853)
|
Federal Statutory
Rate
|
-21.0%
|
-21.0%
|
Increase in Income
Taxes Resulting from:
|
|
|
Change
in Valuation allowance
|
21.0%
|
21.0%
|
Effective Tax
Rate
|
0.0%
|
0.0%
|
|
|
|
Segment
|
|
|
|
Gross
|
Net
|
Segment
|
Segment
|
Revenue
|
Margin
|
Loss
|
Assets
|
Year
Ended September 30, 2019
|
|
|
|
|
Development
of the Bio-RFID™” and “ChromaID™”
technologies
|
$-
|
$-
|
$(7,534,739)
|
$2,882,194
|
TransTech
distribution business
|
1,804,960
|
426,547
|
(77,577)
|
57,439
|
Total
segments
|
$1,804,960
|
$426,547
|
$(7,612,316)
|
$2,939,633
|
|
|
|
|
|
Year
Ended September 30, 2018
|
|
|
|
|
Development
of the Bio-RFID™” and “ChromaID™”
technologies
|
$-
|
$-
|
$(3,294,707)
|
$1,311,134
|
TransTech
distribution business
|
4,303,296
|
821,623
|
37,110
|
791,814
|
Total
segments
|
$4,303,296
|
$821,623
|
$(3,257,597)
|
$2,102,948
|
|
Three Months
Ended,
|
Six
Months Ended,
|
||
|
March 31,
2020
|
March 31,
2019
|
March 31,
2020
|
March 31,
2019
|
|
|
|
|
|
REVENUE
|
$4,546
|
$593,712
|
$121,939
|
$1,195,921
|
COST OF
SALES
|
3,791
|
454,839
|
69,726
|
927,125
|
GROSS
PROFIT
|
755
|
138,873
|
52,213
|
268,796
|
RESEARCH AND
DEVELOPMENT EXPENSES
|
447,165
|
184,024
|
938,303
|
391,014
|
SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES
|
1,622,941
|
1,003,504
|
2,543,492
|
1,692,950
|
OPERATING
LOSS
|
(2,069,351)
|
(1,048,655)
|
(3,429,582)
|
(1,815,168)
|
|
|
|
|
|
OTHER INCOME
(EXPENSE):
|
|
|
|
|
Interest
expense
|
(1,301,674)
|
(400,201)
|
(2,981,164)
|
(409,327)
|
Other
income
|
40,512
|
6,618
|
65,220
|
13,054
|
Total other
(expense), net
|
(1,261,162)
|
(393,583)
|
(2,915,944)
|
(396,273)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES
|
(3,330,513)
|
(1,442,238)
|
(6,345,526)
|
(2,211,441)
|
|
|
|
|
|
Income taxes -
current provision
|
-
|
-
|
-
|
-
|
|
|
|
|
|
NET
LOSS
|
$(3,330,513)
|
$(1,442,238)
|
$(6,345,526)
|
$(2,211,441)
|
|
|
|
|
|
Basic and diluted
loss per share
|
$(0.16)
|
$(0.08)
|
$(0.33)
|
$(0.12)
|
|
|
|
|
|
Weighted average
shares of common stock outstanding- basic and diluted
|
20,424,329
|
18,094,492
|
19,412,240
|
17,829,909
|
|
Series A
Convertible
|
Series C
Convertible
|
Series D
Convertible
|
|
Additional
|
|
Total
|
||||
|
Preferred
Stock
|
Preferred
Stock
|
Preferred
Stock
|
Common
Stock
|
Paid
in
|
Accumulated
|
Stockholders'
|
||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
Balance as of October 1,
2018
|
20,000
|
$11
|
1,785,715
|
$1,790
|
1,016,004
|
$1,015
|
17,531,522
|
$17,531
|
$32,163,386
|
$(34,791,324)
|
$(2,607,591)
|
Stock compensation expense -
employee options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
171,499
|
-
|
171,499
|
Conversion of Series A Convertible
Preferred Stock
|
-
|
-
|
|
|
|
|
279,929
|
280
|
(280)
|
-
|
-
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(769,203)
|
(769,203)
|
Balance as of December 31,
2018
|
20,000
|
11
|
1,785,715
|
1,790
|
1,016,004
|
1,015
|
17,811,451
|
17,811
|
32,334,605
|
(35,560,527)
|
(3,205,295)
|
Stock compensation expense -
employee options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
91,648
|
-
|
91,648
|
Issuance of common stock for
services
|
-
|
-
|
-
|
-
|
-
|
-
|
245,000
|
245
|
348,655
|
-
|
348,900
|
Conversion of Series A Preferred
Stock
|
(20,000)
|
(11)
|
-
|
-
|
-
|
-
|
80,000
|
80
|
(69)
|
-
|
-
|
Beneficial conversion feature (Note
10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,570,049
|
-
|
1,570,049
|
Issuance of warrants to debt
holders (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,244,263
|
-
|
1,244,263
|
Issuance of warrants for services
related to debt offering (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
988,876
|
-
|
988,876
|
Stock based compensation-
warrants
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
30,325
|
-
|
30,325
|
Issuance of common stock for
warrant exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
56,518
|
56
|
(56)
|
-
|
-
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,442,238)
|
(1,442,238)
|
Balance as of March 31,
2019
|
-
|
-
|
1,785,715
|
1,790
|
1,016,004
|
# 1,015
|
18,192,969
|
18,192
|
36,608,296
|
(37,002,765)
|
(373,472)
|
Balance as of October 1,
2019
|
-
|
-
|
1,785,715
|
1,790
|
1,016,004
|
1,015
|
18,366,178
|
18,366
|
39,085,179
|
(42,403,640)
|
(3,297,290)
|
Stock compensation expense -
employee options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
399,897
|
-
|
399,897
|
Stock option
exercise
|
-
|
-
|
-
|
-
|
-
|
-
|
73,191
|
73
|
(73)
|
-
|
-
|
Beneficial conversion feature (Note
10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
330,082
|
-
|
330,082
|
Issuance of warrants to debt
holders (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
168,270
|
-
|
168,270
|
Issuance of warrants for services
related to debt offering (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
160,427
|
-
|
160,427
|
Issuance of common stock for
exercise of warrants
|
-
|
-
|
-
|
-
|
-
|
-
|
28,688
|
29
|
(29)
|
-
|
-
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,015,013)
|
(3,015,013)
|
Balance as of December 31,
2019
|
-
|
-
|
1,785,715
|
1,790
|
1,016,004
|
1,015
|
18,468,057
|
18,468
|
40,143,753
|
(45,418,653)
|
(5,253,627)
|
Stock compensation expense -
employee options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
165,829
|
-
|
165,829
|
Conversion of debt offering and
accrued interest (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
4,114,800
|
4,115
|
4,110,685
|
-
|
4,114,800
|
Beneficial conversion feature (Note
10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
105,535
|
-
|
105,535
|
Issuance of warrants to debt
holders (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
21,214
|
-
|
21,214
|
Issuance of warrants for services
related to debt offering (Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
9,542
|
-
|
9,542
|
Issuance of common stock for
services
|
-
|
-
|
-
|
-
|
-
|
-
|
540,000
|
540
|
1,025,460
|
-
|
1,026,000
|
Issuance of common stock for
exercise of warrants
|
-
|
-
|
-
|
-
|
-
|
-
|
201,271
|
201
|
(201)
|
-
|
0
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,330,513)
|
(3,330,513)
|
Balance as of March 31,
2020
|
-
|
$-
|
1,785,715
|
$1,790
|
1,016,004
|
$1,015
|
$23,324,128
|
$23,324
|
$45,581,817
|
$(48,749,166)
|
$(3,141,220)
|
|
Six
Months Ended,
|
|
|
March 31,
2020
|
March 31,
2019
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
Net
loss
|
$(6,345,526)
|
$(2,211,441)
|
Adjustments to
reconcile net loss to net cash (used in) operating
activities
|
|
|
Depreciation and
amortization
|
120,745
|
133,019
|
Issuance of capital
stock for services and expenses
|
1,026,000
|
348,900
|
Stock based
compensation- warrants
|
-
|
30,325
|
Stock based
compensation- stock option grants
|
565,726
|
263,147
|
Amortization of
debt discount
|
2,792,398
|
361,534
|
Provision on loss
on accounts receivable
|
2,439
|
8,728
|
Right of use,
net
|
(1,236)
|
-
|
Loss on sale of
assets
|
4,358
|
-
|
Changes in
operating assets and liabilities:
|
|
|
Accounts
receivable
|
60,610
|
118,438
|
Prepaid
expenses
|
6,435
|
7,296
|
Inventory
|
7,103
|
102,593
|
Other
assets
|
-
|
(8,697)
|
Accounts payable -
trade and accrued expenses
|
72,618
|
(245,393)
|
Deferred
revenue
|
-
|
(55,959)
|
NET CASH
(USED IN) OPERATING ACTIVITIES
|
(1,688,330)
|
(1,147,510)
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
Investment in
research and development equipment
|
(27,739)
|
(74,556)
|
NET CASH (USED IN)
INVESTING ACTIVITIES:
|
(27,739)
|
(74,556)
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
Repayments on line
of credit
|
-
|
(92,094)
|
Proceeds from
convertible notes payable
|
715,000
|
3,809,976
|
Payments for
issuance costs from notes payable
|
(123,015)
|
(368,322)
|
NET CASH PROVIDED
BY FINANCING ACTIVITIES
|
591,985
|
3,349,560
|
|
|
|
NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS
|
(1,124,084)
|
2,127,494
|
|
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
1,900,836
|
934,407
|
|
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$776,752
|
$3,061,901
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
Interest
paid
|
$-
|
$7,750
|
Taxes
paid
|
$-
|
$-
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
Beneficial
conversion feature
|
$435,617
|
$1,570,049
|
Issuance of
warrants to debt holders
|
$189,484
|
$1,244,263
|
Issuance of
warrants for services related to debt offering
|
$169,969
|
$988,876
|
Cashless warant
exercise (fair value)
|
$57,490
|
$84,107
|
Cashless stock
options exercise (fair value)
|
$18,298
|
$-
|
Conversion of debt
offering
|
$3,800,424
|
$-
|
Conversion of
accrued interest
|
$314,376
|
$-
|
Level 1
– Quoted prices in active markets for identical assets and
liabilities;
|
Level 2
– Inputs other than level one inputs that are either directly
or indirectly observable; and.
Level 3
–
Inputs to the valuation methodology are unobservable and
significant to the fair value measurement.
|
|
Estimated
|
March 31,
|
September 30,
|
|
Useful Lives
|
2020
|
2019
|
Machinery
and equipment
|
2-10
years
|
$310,797
|
$412,238
|
Leasehold
improvements
|
2-3
years
|
3,612
|
3,612
|
Furniture
and fixtures
|
2-3
years
|
26,855
|
58,051
|
Software
and websites
|
3-
7 years
|
-
|
35,830
|
Less:
accumulated depreciation
|
|
(221,490)
|
(379,259)
|
|
$119,774
|
$130,472
|
|
Estimated
|
March 31,
|
September 30,
|
|
Useful Lives
|
2020
|
2019
|
|
|
|
|
Technology
|
3
years
|
$520,000
|
$520,000
|
Less:
accumulated amortization
|
|
(332,220)
|
(245,554)
|
Intangible
assets, net
|
|
$187,780
|
$274,446
|
Year
|
$
|
2021
|
$133,996
|
2022
|
12,086
|
2023
|
0
|
2024
|
-
|
|
146,082
|
Imputed
interest
|
(14,608)
|
Total lease
liability
|
$131,474
|
|
March 31,
2020
|
September 30,
2019
|
Convertible
note- Clayton A. Struve
|
$1,071,000
|
$1,071,000
|
Convertible
note- Ronald P. Ericksin
|
1,184,066
|
1,184,066
|
2019
Debt offering
|
4,242,490
|
4,242,515
|
2020
Debt offering
|
715,000
|
-
|
less
conversions
|
(3,809,975)
|
-
|
less
debt discount - beneficial conversion feature
|
(316,894)
|
(1,273,692)
|
less
debt discount - warrants
|
(169,635)
|
(616,719)
|
less
debt discount - warrants issued for services related to debt
offering
|
(176,722)
|
(652,919)
|
|
$2,739,330
|
$3,954,251
|
Assumptions
|
|
Dividend
yield
|
0%
|
Expected
life
|
5
years
|
Expected
volatility
|
176%-177%
|
Risk
free interest rate
|
1.51%-1.71%
|
|
Options
|
Weighted
Average
Exercise
Price
|
$
|
Outstanding as of
September 30, 2017
|
15,404
|
$14.68
|
$226,059
|
Granted
|
2,180,000
|
1.683
|
3,668,500
|
Exercised
|
-
|
-
|
-
|
Forfeitures
|
(12,736)
|
14.764
|
(188,040)
|
Outstanding as of
September 30, 2018
|
2,182,668
|
1.698
|
3,706,519
|
Granted
|
2,870,000
|
2.615
|
7,504,850
|
Exercised
|
-
|
-
|
-
|
Forfeitures
|
(520,000)
|
(3.906)
|
(2,031,000)
|
Outstanding as of
September 30, 2019
|
4,532,668
|
2.025
|
9,180,369
|
Granted
|
3,020,000
|
1.125
|
3,397,600
|
Exercised
|
(73,191)
|
(0.250)
|
(18,298)
|
Forfeitures
|
(2,588,143)
|
(2.650)
|
(6,859,712)
|
Outstanding as of
March 31, 2020
|
4,891,334
|
$1.165
|
$5,699,959
|
|
|
Weighted
|
Weighted
|
|
Weighted
|
|
|
Average
|
Average
|
|
Average
|
Range of
|
Number
|
Remaining Life
|
Exercise Price
|
Number
|
Exercise Price
|
Exercise Prices
|
Outstanding
|
In Years
|
Outstanding
|
Exerciseable
|
Exerciseable
|
$0.25
|
230,000
|
3.21
|
$0.250
|
100,625
|
$0.250
|
1.10-1.25
|
2,940,000
|
4.60
|
1.37
|
233,854
|
1.096
|
1.28-1.50
|
1,610,000
|
4.60
|
1.31
|
498,438
|
1.296
|
1.79-2.25
|
110,000
|
4.39
|
1.01
|
40,000
|
1.153
|
13.50-15.00
|
1,334
|
0.19
|
13.50
|
1,334
|
13.500
|
|
4,891,334
|
4.19
|
$1.165
|
874,251
|
$1.212
|
|
|
|
Segment
|
|
|
|
Gross
|
Net
|
Segment
|
Segment
|
Revenue
|
Margin
|
Profit (Loss)
|
Assets
|
Three
Months Ended March 31, 2020
|
|
|
|
|
Development
of the Bio-RFID™” and “ChromaID™”
technologies
|
$-
|
$-
|
$(3,346)
|
$1,224
|
TransTech
distribution business
|
5
|
1
|
15
|
4
|
Total
segments
|
$5
|
$1
|
$(3,331)
|
$1,228
|
|
|
|
|
|
Three
Months Ended March 31, 2019
|
|
|
|
|
Development
of the Bio-RFID™” and “ChromaID™”
technologies
|
$-
|
$-
|
$(1,434)
|
$3,565
|
TransTech
distribution business
|
594
|
139
|
(8)
|
379
|
Total
segments
|
$594
|
$139
|
$(1,442)
|
$3,944
|
|
|
|
Segment
|
|
|
|
Gross
|
Net
|
Segment
|
Segment
|
Revenue
|
Margin
|
Profit (Loss)
|
Assets
|
Six
Months Ended March 31, 2020
|
|
|
|
|
Development
of the Bio-RFID™” and “ChromaID™”
technologies
|
$-
|
$-
|
$(6,418)
|
$1,224
|
TransTech
distribution business
|
122
|
52
|
72
|
4
|
Total
segments
|
$122
|
$52
|
$(6,346)
|
$1,228
|
|
|
|
|
|
Six
Months Ended March 31, 2019
|
|
|
|
|
Development
of the Bio-RFID™” and “ChromaID™”
technologies
|
$-
|
$-
|
$(2,171)
|
$3,565
|
TransTech
distribution business
|
1,196
|
269
|
(40)
|
379
|
Total
segments
|
$1,196
|
$269
|
$(2,211)
|
$3,944
|
Securities
and Exchange Commission registration fee
|
$2,008
|
Accountant's
fees and expenses
|
10,000
|
Legal
fees and expenses
|
15,000
|
Blue
Sky fees and expenses
|
5,000
|
Transfer
agent's fees and expenses
|
1,000
|
Miscellaneous
|
4,992
|
|
|
Total
expenses
|
$38,000
|
|
KNOW LABS, INC.
|
|
|
|
|
|
By:
|
/s/ Ronald P. Erickson
|
|
|
Ronald P. Erickson
Chairman of the Board
|
|
|
|
|
By:
|
/s/ Ronald P. Erickson
|
|
|
Interim Chief Financial Officer
|
SIGNATURES
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Phillip A. Bosua
|
|
Chief Executive Officer and Director
|
|
June 30, 2020
|
Phillip A. Bosua
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Ronald P. Erickson
|
|
Chairman of the Board and Interim Chief Financial
Officer
|
|
June 30, 2020
|
Ronald
P. Erickson
|
|
(Principal Financial/ Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Jon Pepper
|
|
Director
|
|
June 30, 2020
|
Jon Pepper
|
|
|
|
|
|
|
|
|
|
/s/ Ichiro Takesako
|
|
Director
|
|
June 30, 2020
|
Ichiro Takesako
|
|
|
|
|
/s/ William A. Owens
|
|
Director
|
|
June 30, 2020
|
William A. Owens
|
|
|
|
|
Exhibit
No.
|
Description
|
Restatement of the
Articles of Incorporation dated September 13, 2013 (incorporated by
reference to the Company’s Current Report on Form 8-K/A2,
filed September 17, 2013)
|
|
|
|
Amended and
Restated Bylaws (incorporated by reference to the Company’s
Form 8-K, filed August 17, 2012)
|
|
|
|
Certificate of
Amendment to the Restatement of the Articles of Incorporation dated
June 11, 2015 (incorporated by reference to the Company’s
Current Report on Form 8-K, filed June 17, 2015)
|
|
|
|
Certificate of
Designations, Preferences and Rights of Series C Convertible
Preferred Stock (incorporated by reference to the Company’s
Current Report on Form 8-K, filed August 11, 2016)
|
|
|
|
Form of Series C
Convertible Preferred Stock 2016 (incorporated by reference to the
Company’s Registration Statement on Form S-1, filed September
1, 2016)
|
|
|
|
Certificate of
Correction and Certificate of Designations, Preferences and Rights
of Series C Convertible Preferred Stock (incorporated by reference
to the Company’s Amended Current Report on Form 8-K/A, filed
January 9, 2017)
|
|
|
|
Certificate of
Designations, Preferences and Rights of Series D Convertible
Preferred Stock (incorporated by reference to the Company’s
Current Report on Form 8-K, filed on February 10,
2017)
|
|
|
|
Amended and
Restated Certificate of Designations, Preferences and Rights of
Series D Convertible Preferred Stock. (incorporated by reference to
the Company’s Current Report on Form 8-K, filed May 5,
2017)
|
|
|
|
Second Amended and
Restated Certificate of Designations, Preferences and Rights of
Series D Convertible Preferred Stock (incorporated by reference to
the Company’s Current Report on Form 8-K, filed July 19,
2018)
|
|
|
|
Articles of Merger
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed May 3, 2018)
|
|
|
|
Second Amended and
Restated Certificate of Designations, Preferences and Rights of
Series D Convertible Preferred Stock (incorporated by reference to
the Company’s Current Report on Form 8-K, filed July 20,
2018)
|
|
|
|
Certificate of
Designation of Series F Preferred Stock (incorporated by reference
to the Company’s Current Report on Form 8-K, filed August 3,
2018)
|
|
|
|
2011 Stock
Incentive Plan (incorporated by reference to the Company’s
Definitive Proxy Statement on Schedule 14A, filed January 11,
2013)
|
|
|
|
Opinion of Horwitz
+ Armstrong, A Professional Law Corporation (filed
herewith)
|
|
|
|
Form of Preferred
Stock and Warrant Purchase Agreement by and between Visualant,
Incorporated and Clayton A. Struve (incorporated by reference to
the Company’s Current Report on Form 8-K, filed May 5,
2017)
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Securities Purchase
Agreement dated August 14, 2017 by and between Visualant,
Incorporated and accredited investor (incorporated by reference to
the Company’s Current Report on Form 8-K, filed August 18,
2017)
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Senior Secured
Convertible Redeemable Debenture dated December 12, 2017 by and
between Visualant, Incorporated and accredited investor.
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed December 22, 2017)
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Senior Secured
Convertible Redeemable Debenture dated February 28, 2018 by and
between Visualant, Incorporated and accredited investor.
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed March 7, 2018)
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Note and Account
Payable Conversion Agreement dated January 31, 2018 by and between
Visualant, Incorporated and J3E2A2Z LP (incorporated by reference
to the Company’s Current Report on Form 8-K, filed March 21,
2018)
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Employment
Agreement dated April 10, 2018 by and between Visualant,
Incorporated and Phillip A. Bosua. (incorporated by reference to
the Company’s Annual Report on Form 10-K, filed December 21,
2018)
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Amended Employment
Agreement dated April 10, 2018 by and between Visualant,
Incorporated and Ronald P. Erickson. (incorporated by reference to
the Company’s Annual Report on Form 10-K, filed December 21,
2018)
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Agreement and Plan
of Merger, dated as of April 10, 2018, by and among Visualant,
Incorporated,
500 Union Corporation, and RAAI Lighting, Inc. (incorporated by
reference to the Company’s Annual Report on Form 10-K, filed
December 21, 2018)
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Certificate of
Merger, dated as of April 10, 2018, by 500 Union Corporation
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed April 17, 2018)
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Amendment 1 dated
November 16, 2018 to Senior Secured Convertible Redeemable Note
dated September 30, 2016 by and between Know Labs, Inc. and Clayton
A. Struve (incorporated by reference to the Company’s Current
Report on Form 8-K, filed November 16, 2018)
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Amendment 1 dated
November 16, 2018 to Senior Secured Convertible Redeemable Note
dated August 14, 2017 by and between Know Labs, Inc. and Clayton A.
Struve (incorporated by reference to the Company’s Current
Report on Form 8-K, filed November 16, 2018)
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Amendment 1 dated
November 16, 2018 to Senior Secured Convertible Redeemable Note
dated December 12, 2017 by and between Know Labs, Inc. and Clayton
A. Struve (incorporated by reference to the Company’s Current
Report on Form 8-K, filed November 16, 2018)
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Form of Securities
Purchase Agreement (incorporated by reference to the
Company’s Current Report on Form 8-K, filed March 6,
2019)
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Form of
Subscription Agreement (incorporated by reference to the
Company’s Current Report on Form 8-K, filed March 6,
2019)
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Amendment 2 dated
April 30, 2019 to Senior Secured Convertible Redeemable Note dated
September 30, 2016 by and between Know Labs, Inc. and Clayton A.
Struve. (incorporated by reference to the Company’s Current
Report on Form 8-K, filed May 22, 2019)
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Amendment 2 dated
April 30, 2019 to Senior Secured Convertible Redeemable Note dated
August 14, 2017 by and between Know Labs, Inc. and Clayton A.
Struve. (incorporated by reference to the Company’s Current
Report on Form 8-K, filed May 22, 2019)
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Amendment 2 dated
April 30, 2019 to Senior Secured Convertible Redeemable Note dated
December 12, 2017 by and between Know Labs, Inc. and Clayton A.
Struve. (incorporated by reference to the Company’s Current
Report on Form 8-K, filed May 22, 2019)
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Amendment 1 dated
April 30, 2019 to Senior Secured Convertible Redeemable Note dated
February 28, 2018 by and between Know Labs, Inc. and Clayton A.
Struve. (incorporated by reference to the Company’s Current
Report on Form 8-K, filed May 22, 2019)
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Amendment 1 dated
April 30, 2019 to Convertible Redeemable Promissory Note dated
January 31, 2018 by and between Know Labs, Inc. and J3E2A2Z LP.
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed May 22, 2019)
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Amendment 1 dated
April 30, 2019 to Convertible Redeemable Promissory Note dated
January 31, 2018 by and between Know Labs, Inc. and J3E2A2Z LP.
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed May 22, 2019)
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Amendment 2 dated November 26, 2019 to Senior Secured Convertible
Redeemable Note dated September 30, 2016 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to
the Company’s Current Report on Form 8-K, filed December 16,
2019)
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Amendment 2 dated November 26, 2019 to Senior Secured Convertible
Redeemable Note dated August 14, 2017 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to
the Company’s Current Report on Form 8-K, filed December 16,
2019)
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Amendment 2 dated November 26, 2019 to Senior Secured Convertible
Redeemable Note dated December 12, 2017 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to the
Companys Current Report on Form 8-K, filed December 16,
2019)
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Amendment 1 dated November 26, 2019 to Senior Secured Convertible
Redeemable Note dated February 28, 2018 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to the
Companys Current Report on Form 8-K, filed December 16,
2019)
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Amendment 3 dated May 12, 2020 to Convertible Redeemable Promissory
Note dated January 31, 2018 by and between Know Labs, Inc.
and J3E2A2Z LP. (incorporated by reference to the
Company’s Current Report on Form 8-K, filed May 13,
2020)
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Amendment 3 dated May 12, 2020 to Convertible Redeemable Promissory
Note dated January 31, 2018 by and between Know Labs, Inc.
and J3E2A2Z LP. (incorporated by reference to the
Company’s Current Report on Form 8-K, filed May 13,
2020)
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Amendment 3 dated May 11, 2020 to Senior Secured Convertible
Redeemable Note dated August 14, 2017 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to
the Company’s Current Report on Form 8-K, filed May 15,
2020)
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Amendment 3 dated May 11, 2020 to Senior Secured Convertible
Redeemable Note dated December 12, 2017 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to
the Company’s Current Report on Form 8-K, filed May 15,
2020)
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Amendment 2 dated May 11, 2020 to Senior Secured Convertible
Redeemable Note dated February 28, 2018 by and between Know Labs,
Inc. and Clayton A. Struve. (incorporated by reference to
the Company’s Current Report on Form 8-K, filed May 15,
2020)
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Code of Ethics
dated November 2018 (incorporated by reference to the
Company’s Current Report on Form 8-K, filed November 27,
2018)
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Letter dated October 4, 2019 from SD Mayer and
Associates, LLP. (incorporated by reference to the
Company’s Current Report on Form 8-K, filed October 8,
2019)
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Subsidiaries of the
Registrant. (filed herewith)
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Consent of SD Mayer
& Associates, LLP, independent registered public accounting
firm (filed herewith)
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Consent of BPM LLP,
independent registered public accounting firm (filed
herewith)
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Consent of Horwitz
+ Armstrong, A Professional Law Corporation (included in Exhibit
5.1) (filed herewith)
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Audit Committee
Charter dated November 2018 (incorporated by reference to the
Company’s Current Report on Form 8-K, filed November 27,
2018)
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Compensation
Committee Charter dated November 2018 (incorporated by reference to
the Company’s Current Report on Form 8-K, filed November 27,
2018)
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Nominations and
Corporate Governance Committee Charter dated November 2018
(incorporated by reference to the Company’s Current Report on
Form 8-K, filed November 27, 2018)
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Very
truly yours,
/s/ Horwitz + Armstrong
Horwitz
+ Armstrong, A Professional Law
Corporation
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