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OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended
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Sep. 30, 2022
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES |
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 11. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES Transactions with Clayton Struve See Notes 7 and 9 for related party transactions with Clayton A. Struve, a significant stockholder. On January 28, 2021, Clayton A. Struve exercised warrants on a cashless basis for 889,880 shares of common stock at $0.25 per share. Transactions with Ronald P. Erickson See Notes 7, 9, 10 and 12 for related party transactions with Ronald P. Erickson, the Company’s Chairman, and affiliated entities. On November 4, 2019, the Company granted a stock option grant to Ronald P. Erickson for 1,200,000 shares with an exercise price of $1.10 per share. The performance grant expires November 4, 2024 and vests upon uplisting to the NASDAQ or NYSE exchanges. The Company’s common stock began trading on NYSE American under the symbol “KNW” on September 16, 2022 and the Company expensed $1,207,200 during the year ended September 30, 2022. On June 1, 2020, Mr. Erickson received a salary of $10,000 per month for work on Particle, Inc. This salary was cancelled as of August 15, 2021. On December 15, 2020, the Company issued a stock option grant to Ronald P. Erickson for 1,865,675 shares at an exercise price of $1.53 per share. The stock option grant expires in five years. The grant vests in increments if the market capitalization of the Company’s commons stock exceeds for 20 consecutive trading days starting at $100 million to $1 billion. The Company estimated at grant date the fair value of these options at approximately $520,869 which is being amortized over 5 years. As of September 30, 2022, the Company recorded a cumulative expense of $186,657. The Company is valuing this stock option using the Monte Carlo pricing model which included key assumptions of 100% stock volatility, five year life and no forfeitures. The stock option grant was not vested as of September 30, 2022. On December 15, 2020, the Company issued a stock option grant to Ronald P. Erickson for 1,865,675 shares at an exercise price of $1.53 per share. The stock option grant expires in five years. The Company’s common stock began trading on NYSE American under the symbol “KNW” on September 16, 2022 and the Company expensed $263,593 during the year ended September 30, 2022. The stock option grants vest when earned based on certain performance criteria. On December 15, 2020, the Company issued a fully vested warrant to Ronald P. Erickson for 2,000,000 shares of common stock. The five-year warrant is exercisable for cash or non-cash at $1.53 per share and was valued using a Black-Scholes model at $1,811,691. The Company paid $120,000 and $272,500 of salaries and vacation pay to Mr. Erickson during the year ended September 30, 2022 and 2021 that were previously accrued and reported but were deferred., Mr. Erickson and/or entities with which he is affiliated also have accrued compensation, travel and interest of approximately $295,418 and $421,599 as of September 30, 2022 and 2021, respectively. Transactions with Phillip A. Bosua See Notes 4, 10 and 12 for related party transactions with Phillip A. Bosua. On June 1, 2020, Mr. Bosua received a salary of $10,000 per month for work on Particle, Inc. This salary was cancelled as of August 15, 2021. On December 15, 2020, the Company issued a stock option grant to Phillip A. Bosua for 2,132,195 shares at an exercise price of $1.53 per share. The stock option grant expires in five years. The grant vests in increments if the market capitalization of the Company’s commons stock exceeds for 20 consecutive trading days starting at $100 million to $1 billion. The Company estimated at grant date the fair value of these options at approximately $595,277 which is being amortized over 5 years. As of September 30, 2022, the Company recorded a cumulative expense of $231,321. The Company is valuing this stock option using the Monte Carlo pricing model which included key assumptions of 100% stock volatility, five year life and no forfeitures. The stock option grant was not vested as of September 30, 2022. On December 15, 2020, the Company issued a stock option grant to Phillip A. Bosua for 2,132,195 shares at an exercise price of $1.53 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. The Company’s common stock began trading on NYSE American under the symbol “KNW” on September 16, 2022 and we expensed $301,249 during the year ended September 30, 2022. On March 18, 2021, the Company approved a $250,000 bonus for Mr. Bosua. The bonus was paid during April 2021. As compensation for the development of the NFT sales, Mr. Bosua was paid $1,087,928 in compensation and $91,500 for rent expense during the year ended September 30, 2022. Stock Issuances to Named Executive Officers and Directors On January 15, 2021, the Company issued 30,000 shares each to three directors shares at an exercise price of $2.00 per share. On January 15, 2021, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $2.00 per share. The warrants expire on January 15, 2026. On January 5, 2022, the Company issued 30,000 shares each to three directors shares at an exercise price of $1.70 per share. On January 5, 2022, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $1.70 per share. The warrants expire on January 5, 2027.

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