KNOW LABS, INC.

Previous wording

As of the date of this report, we have exhausted all of our authorized shares of Common Stock and are unable to issue any additional shares of Common Stock. The exhaustion of authorized shares presents significant risks, including but not limited to, affecting our ability to raise capital, meet contractual obligations under outstanding preferred stock and convertible debt agreements, maintain stock liquidity, avoid dilution concerns, comply with regulatory requirements, and execute strategic initiatives.

Current wording

As of June 30, 2025, we had exhausted all of our authorized shares of Common Stock and are unable to issue any additional shares of Common Stock. The exhaustion of authorized shares presents significant risks, including but not limited to, affecting our ability to raise capital, meet contractual obligations under outstanding preferred stock and convertible debt agreements, maintain stock liquidity, avoid dilution concerns, comply with regulatory requirements, and execute strategic initiatives.

Previous wording

If in the future we sell our common stock at a price below $9.60 per share, the conversion price of (i) the outstanding shares of Series C and D Convertible Preferred Stock; (ii) promissory notes convertible into shares of our common stock; and (iii) warrants to purchase shares of common stock would adjust below $9.60 per share. The Company has the option to repay Lind in cash or common stock. Should we make our monthly payments in common stock, there may be a price adjustment.

Current wording

If in the future we sell our common stock at a price below $0.335 per share, the conversion price of (i) the outstanding shares of Series C and D Convertible Preferred Stock; (ii) promissory notes convertible into shares of our common stock; and (iii) warrants to purchase shares of common stock would adjust below $0.335 per share. The Company has the option to repay Lind in cash or common stock. Should we make our monthly payments in common stock, there may be a price adjustment.

Previous wording

We owe Clayton A. Struve, a significant stockholder, $1,071,000 under convertible promissory or OID notes under convertible promissory or OID notes. Mr. Struve also holds shares of Series C and D Convertible Preferred Stock and warrants to purchase shares of common stock. The potential repricing adjustments that these convertible securities are entitled to may not be permitted without increasing our authorize common stock.

Current wording

We owe Clayton A. Struve, a significant stockholder, $1,071,000 under convertible promissory or OID notes under convertible promissory or OID notes. Mr. Struve also holds shares of Series C and D Convertible Preferred Stock and warrants to purchase shares of common stock. The potential repricing adjustments that these convertible securities are entitled to may not be permitted without increasing our authorized common stock.

Previous wording

We owe Ronald P. Erickson and J3E2A2Z, an entity affiliated controlled by Ronald P. Erickson $1,184,066 under convertible promissory notes. The potential repricing adjustments that these convertible securities are entitled to may not be permitted without increasing our authorized common stock.

Current wording

Ronald P. Erickson and J3E2A2Z, an entity affiliated controlled by Ronald P. Erickson holds shares of Series H Convertible Preferred Stock. The potential repricing adjustments that these convertible securities are entitled to may not be permitted without increasing our authorized common stock.

Previous wording

We are currently in default ofour convertible note with Lind Global Fund II, LP.

Current wording

We were previously in default ofour convertible note with Lind Global Fund II, LP.

Previous wording

We are currently in default of that certain senior convertible note issued to Lind Global Fund II, LP as the result of having exhausted our authorized common stock and we may be subject to further default. Upon the occurrence of any event of default, the notes will become immediately due and payable and the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of each note, in addition to any other remedies under the note or the other transaction documents. Events of default include, among others, the Company’s failure to make any note payment when due, a default in any indebtedness or adverse judgements in excess of $250,000, our failure to instruct its transfer agent to issue unlegended certificates, the Company’s shares of common stock no longer being public traded or listed on a national securities exchange, any stop order or trading suspension restricting the trading in our common stock, and our market capitalization is below $15 million for consecutive 10 days.

Current wording

We were previously in default of that certain senior convertible note issued to Lind Global Fund II, LP as the result of having exhausted our authorized common stock and we may be subject to further default. Upon the occurrence of any event of default, the notes will become immediately due and payable and the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of each note, in addition to any other remedies under the note or the other transaction documents. Events of default include, among others, the Company’s failure to make any note payment when due, a default in any indebtedness or adverse judgements in excess of $250,000, our failure to instruct its transfer agent to issue unlegended certificates, the Company’s shares of common stock no longer being public traded or listed on a national securities exchange, any stop order or trading suspension restricting the trading in our common stock, and our market capitalization is below $15 million for consecutive 10 days.

Previous wording

We have recurring net losses, which have resulted in an accumulated deficit of $147,037,000 as of March 31, 2025. At March 31, 2025, we had cash and cash equivalents of $444,000. We have concluded that these factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the March 31, 2025 financial statements. Now that we have exhausted our authorized shares of common stock, we will be unable to continue to seek to raise additional working capital through public equity, private equity or convertible debt financings. If we fail to raise additional working capital, or do so on commercially unfavorable terms, it would materially and adversely affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, if at all.

Current wording

We have recurring net losses, which have resulted in an accumulated deficit of $151 million as of June 30, 2025. At June 30, 2025, we had cash and cash equivalents of $173,000. We have concluded that these factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the June 30, 2025 financial statements. Now that we have exhausted our authorized shares of common stock, we will be unable to continue to seek to raise additional working capital through public equity, private equity or convertible debt financings. If we fail to raise additional working capital, or do so on commercially unfavorable terms, it would materially and adversely affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, if at all.