The 2024 Knightscope Annual Shareholder Meeting is just around the corner scheduled for 1pm PDT on Fri 16 August 2024. In response to numerous requests, we wanted to provide you this condensed overview of the proxy statement as it is an important document that serves 2 important functions for shareholders.
First, it serves as a formal communication from Knightscope to our shareholders, providing updates on financial performance, strategic plans, and other critical information such as executive compensation, board candidates and corporate actions or strategy the Company is considering.
Second, it enables and empowers our shareholders to participate in corporate governance by voting on important issues. Shareholders can actively support and influence Knightscope’s strategy by evaluating and voting for our proposals.
For the 2024 Annual Shareholder’s Meeting, we are asking for you to vote in favor of strategic actions that the Company plans to take as we set ourselves up for future success. Our proposals, summarized below, are primarily focused on cleaning up the Company’s corporate structure to align with best practices that ultimately benefit shareholders in the long-term. For the specific details we encourage you to refer the proxy statement itself here.
- Board of Directors Election: We are asking the shareholders to vote in favor of electing William Santana Li, William G. Billings, Robert A. Mocny, and Melvin W. Torrie to the Board to serve until the 2025 annual meeting.
- Accounting Firm Ratification: BPM LLP, an independent registered public accounting firm, is our auditor. We ask that Shareholders vote to retain them for the upcoming year.
- Reverse Stock Split (RSS) for Class A Common and Common B Stock: We are seeking your support to enable the Board of Directors the option to implement a reverse stock split if necessary (it is not to approve a reverse stock split itself). As we have previously disclosed, Nasdaq has given us until October 4, 2024 to increase the KSCP stock price above $1 per share. Although our goal is to get there organically, it is critical that Management and the Board have the discretion to leverage the RSS as a last resort option to avoid delisting. We are asking for a broad range between 1-for-5 and 1-for-50 to give us a high amount of flexibility. Again, only if it is needed.
- Authorization of "Blank Check" Preferred Stock: This proposal asks for you to approve authorization of 40 million shares of "blank check" preferred stock, allowing the company to issue new shares in the future, and make related changes. In addition, we are asking you to help us remove/retire the old Preferred shares that were issued before the Company’s public listing and are no longer aligned with public company best practices.
"Blank check" preferred stock is a type of preferred stock that a company's board of directors can issue with flexible terms and conditions, which are determined when the stock is issued. For the company, this strategic tool can support long-term growth objectives. It offers flexibility and efficiency in raising capital, making strategic acquisitions, and defending against hostile takeovers. It allows the company to quickly tailor financial instruments to market conditions or investor needs, enhancing its ability to respond to opportunities and threats promptly.
For shareholders, the use of blank check preferred stock can increase company value, protect against dilution, and support strategic growth, all of which can enhance shareholder value. - Officer Exculpation & Exclusive Forum Provision: These are amendments to the company's certificate of incorporation to better align with the laws of the State of Delaware.
The Officer Exculpation proposal aims to protect (exculpate) the Company’s officers by limiting their personal liability for breaches of fiduciary duty, as permitted by Delaware law. This change can attract and retain top executives, encourage bold decision-making, and align officers' interests with those of shareholders by reducing their risk of personal financial loss. Ultimately, it promotes better corporate governance and ensures the company remains legally compliant and forward-thinking.
The Exclusive Forum Provision seeks to designate specific courts as the exclusive venues for certain legal claims related to the company. This proposal is beneficial for shareholders because it helps ensure legal disputes are resolved in a consistent and efficient manner, which can lead to more predictable outcomes. By reducing litigation costs and preventing forum shopping, it helps protect the company's financial resources and stability. This ultimately contributes to maintaining or increasing shareholder value by safeguarding the company’s assets and management focus.
In essence, the proxy statement is a key document that empowers shareholders to engage actively in Knightscope’s governance and oversight as owners of our equity. It provides a way to partner with the Management team and the Board and influence corporate direction and strategy.
We look forward to your favorable vote and also please join our Town Hall scheduled for the day prior at 11am PDT on Thu 15 Aug 2024 – which also happens to be the day after the 10-Q filing! We will review both our 2nd quarter performance as well as answer questions regarding the annual meeting – be on the lookout for the invite shortly!
