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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wrap Technologies Inc | NASDAQ:WRTC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.75 | 5.51 | 5.81 | 0 | 01:00:00 |
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
|
Delaware
|
98-0551945
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.0001 per share
|
WRAP
|
Nasdaq Capital Market
|
Large Accelerated Filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
Emerging growth company ☐
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Page
|
||
PART III
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||
ITEM 10.
|
1 | |
ITEM 11.
|
6 | |
ITEM 12.
|
17 | |
ITEM 13.
|
18 | |
ITEM 14.
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Principal Accounting Fees and Services (Rosenberg Rich Baker Berman, P.A., Somerset, New Jersey, PCAOB ID: 89)
|
18 |
PART IV
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||
ITEM 15.
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20 | |
23 | ||
Financial Statements
|
Committees
|
||||||
Director Name
|
Audit
|
Compensation
|
Nominating and Governance
|
|||
Scot Cohen
|
||||||
Michael Parris
|
X
|
X
|
X
|
|||
Kevin Sherman
|
X
|
CC
|
X
|
|||
Wayne Walker
|
X
|
|||||
Kimberly Sentovich
|
CC
|
CC
|
||||
Bruce Bernstein | X | |||||
Marc Savas | X |
●
|
one late Form 4 filed by L.W. Varner Jr, the Company’s former Interim Chief Executive Officer;
|
●
|
one late Form 4 filed by TJ Kennedy, the Company’s former Chief Executive Officer;
|
●
|
one late Form 4 filed by Kevin Mullins;
|
●
|
one late Form 4 filed by Glenn Hickman, the Company’s former Chief Operating Officer; and
|
●
|
one late Form 4 filed by Chris DeAlmeida.
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards(1)
|
Option
Awards(2)
|
All Other
Compensation(3)
|
Total
|
||||||||||||||||||
Kevin Mullins (4)
Chief Executive Officer and Director
|
2022
|
$ | 200,000 | $ | - | $ | 506,250 | $ | 1,721,691 | $ | - | $ | 2,427,941 | ||||||||||||
Chris DeAlmeida (5)
Chief Financial Officer, Treasurer and Secretary
|
2022
|
$ | 103,125 | $ | - | $ | 227,500 | $ | 318,500 | $ | - | $ | 649,125 | ||||||||||||
TJ Kennedy (6)
Former Chief Executive Officer and Director
|
2022
|
$ | 276,667 | $ | 50,000 | $ | 742,982 | $ | 2,293,879 | $ | - | $ | 3,363,528 | ||||||||||||
Glenn Hickman (7)
|
2022
|
$ | 225,000 | $ | 25,000 | $ | 106,500 | $ | - | $ | - | $ | 356,500 | ||||||||||||
Former Chief Operating Officer
|
2021
|
$ | 112,500 | $ | 25,000 | $ | 165,000 | $ | 183,164 | $ | 41,918 | $ | 527,582 | ||||||||||||
LW Varner, Jr. (8)
Former Interim Chief Executive Officer
|
2022
|
$ | - | $ | - | $ | 50,000 | $ | - | $ | 150,000 | $ | 200,000 | ||||||||||||
Thomas P. Smith (9)
|
2022
|
$ | 33,333 | $ | 100,000 | $ | - | $ | - | $ | 300,000 | $ | 433,333 | ||||||||||||
Former Chief Executive Officer and President
|
2021
|
$ | 400,000 | $ | 100,000 | $ | - | $ | 994,043 | $ | - | $ | 1,494,043 |
(1)
|
Amounts reported in this column do not reflect the amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of restricted stock units (“RSUs”) granted to the named executive officers during the fiscal year ended December 31, 2022, as computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification 718 (“ASC 718”). Assumptions used in the calculation of these amounts are included in the notes to our financial statements included in our Annual Report. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Specifically, the number in the table above includes:
● For Mr. Mullins, RSU granted in April 2022, as part of an Inducement grant in connection with begin named President.;
● For Mr. DeAlmeida, RSUs granted in July 2022, in connection with being named Chief Financial Officer;
● For Mr. Kennedy, $725,000 for RSUs granted in April, in connection with being named Chief Executive Officer and $17,982 for RSUs granted for Board responsibilities from January 1, 2022 through April 17, 2022;
● For Mr. Hickman, RSUs granted March 2022 and March 2021 for continued service;
● For. Mr. Varner, RSUs granted February 19, 2022 in connection with being named Interim Chief Executive Officer; and
|
(2)
|
Amounts reported in this column do not reflect the amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted to the named executive officers during each fiscal year, as computed in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in the notes to our financial statements included in our Annual Report. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our named executive officers will only realize compensation to the extent the trading price of our Common Stock is greater than the exercise price of such stock options. Specifically, the number in the table above includes:
● For Mr. Mullins, $856,193 for options granted in April 2022 and $865,498 for Performance Options granted in April. 2022 in connection with begin named President.;
● For Mr. DeAlmeida, options granted in July 2022, in connection with being named Chief Financial Officer;
● For Mr. Kennedy, $1,141,589 for options granted in April 2022 and $1,152,290 for Performance Options granted in April 2022 in connection with being named Chief Executive Officer;
● For Mr. Hickman, options granted in March 2021 for continued service; and
● For. Mr. Smith, options granted in connection with his Separation Agreement in January 2022 and options granted in March 2021.
|
(3)
|
Amounts reported in this column represent other compensation paid to executive officers. Amounts for Mr. Hickman include $41,918 for his consulting agreement in 2021. For Mr. Varner, the amount reflects the consulting payments made to his consulting firm, LWV Consulting, LLC. For his services as Interim Chief Executive Officer during 2022. Amounts for Mr. Smith represent the severance payments made per his Separation Agreement.
|
(4)
|
Kevin Mullins was appointed as the Company’s President on April 18, 2022, as the Company’s Chief Executive Officer on April 14, 2023, and was appointed as a member of the Board of Directors on April 21, 2023.
|
(5)
|
Chris DeAlmeida was appointed as the Company’s Chief Financial Officer and Treasurer effective July 25, 2022, and was appointed Secretary on April 21, 2023.
|
(6)
|
TJ Kennedy served as the Company’s Chief Executive Officer from April 18, 2022, to April 14, 2023.
|
(7)
|
Glenn Hickmann served as the Company’s Chief Operating Officer from July 2021 to April 17, 2023. He was paid $41,918 for consulting services in 2021 prior to becoming an employee, and this amount is included as Other Compensation in the table above.
|
(8)
|
LW Varner, Jr. served as the Company’s Interim Chief Executive Officer from January 24, 2022, until his resignation effective April 18, 2022. LW Varner was paid as a consultant through LWV Consulting, LLC. And was not an employee of the Company.
|
(9)
|
Mr. Smith served as the Company’s Interim Chief Executive Officer from October 2020 through March 2021, and as Chief Executive Officer from March 2021 through January 2022.
|
●
|
175,173 RSUs computed as a grant date fair value of $506,250, which will vest in substantially equal installments on each of the first through third anniversaries of the Commencement Date, subject to Mr. Mullins’s continued employment through each of the vesting dates. Vesting of the RSUs will accelerate upon the occurrence of certain conditions, as more specifically set forth in the Mullins Employment Agreement;
|
●
|
A nonqualified option (the “Mullins Option”) to purchase up to 356,747 shares of Common Stock computed at a grant date fair market value of $506,250, at an exercise price of $2.89 per share. The Mullins Option will vest in substantially equal installments on each of the first through third anniversaries of the effective date of Mr. Mullins’s employment, subject to Mr. Mullins’s continued employment through each of the vesting dates. Vesting of the Mullins Option will accelerate upon certain events, as more specifically set forth in the Mullins Employment Agreement; and
|
●
|
A nonqualified option (the “Mullins Performance Option”) to purchase up to 692,398 shares of Common Stock equal to 1.69% of the number of shares of Common Stock issued and outstanding on the Commencement Date, at an exercise price of $2.89 per share. The Mullins Performance Option will vest, subject to Mr. Mullins’s continued employment with the Company through each vesting date, as follows: (i)
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options and rights
|
Weighted-average exercise price of outstanding options and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity compensation plans approved by security holders
|
5,491,399 | $ | 4.55 | 1,556,291 | ||||||||
Equity compensation plans not approved by security holders
|
- | - | - | |||||||||
Total
|
5,491,399 | $ | 4.55 | 1,556,291 |
Name and Position
|
Grant Date
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
|
Exercise
Price of
Option
Awards
($/Share) (1)
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($) (2)
|
||||||||||||
Executive Officers
|
|||||||||||||||||
Kevin Mullins, Chief Executive Officer and Director
|
4/19/2022
|
356,747 | $ | 2.89 | $ | 506.250 | |||||||||||
4/19/2022
|
175,173 | $ | 2.89 | $ | 506,250 | ||||||||||||
4/19/2022
|
230,799 | $ | 2.89 | $ | 300,039 | ||||||||||||
4/19/2022
|
230,799 | $ | 2.89 | $ | 205,411 | ||||||||||||
4/19/2022
|
230,800 | $ | 2.89 | $ | 360,048 | ||||||||||||
Chris DeAlmeida, Chief Financial Officer, Treasurer, and Secretary
|
7/25/2022
|
125,000 | $ | 1.82 | $ | 227,500 | |||||||||||
7/25/2022
|
175,000 | $ | 1.82 | $ | 318,500 | ||||||||||||
Former Executive Officers
|
|||||||||||||||||
TJ Kennedy, Former Chief Executive Officer
|
4/19/2022
|
475,662 | $ | 2.89 | $ | 675,000 | |||||||||||
4/19/2022
|
17,301 | $ | 2.89 | $ | 50,000 | ||||||||||||
4/19/2022
|
233,564 | $ | 2.89 | $ | 675,000 | ||||||||||||
4/19/2022
|
307,277 | $ | 2.89 | $ | 479,352 | ||||||||||||
4/19/2022
|
307,277 | $ | 2.89 | $ | 273,477 | ||||||||||||
4/19/2022
|
307,278 | $ | 2.89 | $ | 399,461 | ||||||||||||
6/30/2022
|
1,536 | $ | 1.86 | $ | 2,857 | ||||||||||||
11/16/2022
|
5,602 | $ | 2.70 | $ | 15,125 | ||||||||||||
Glenn Hickman, Former Chief Operating Officer
|
3/2/2022
|
50,000 | $ | 2.13 | $ | 106,500 | |||||||||||
LW Varner, Jr., Former Interim Chief Executive Officer
|
2/19/2022
|
21,186 | $ | 2.36 | $ | 49,999 | |||||||||||
Others
|
|||||||||||||||||
Non-Employee Directors
|
11/16/2022
|
28,010 | $ | 2.70 | $ | 75,627 | |||||||||||
11/16/2022
|
40,660 | $ | 1.86 | $ | 75,628 | ||||||||||||
11/16/2022
|
44,225 | $ | 1.71 | $ | 75,625 | ||||||||||||
Employees and Consultants (excluding executive officers)
|
Various
|
253,000 |
$2.55 to $3.93
|
$ | 814,030 | ||||||||||||
Various
|
198,129 |
$1.69 to $3.93
|
$ | 418,076 |
(1)
|
Each option was granted at an exercise price equal to the fair market value of our Common Stock on the grant date which was equal to the closing price of a share of our Common Stock, as reported by Nasdaq on the date of grant.
|
(2)
|
The amounts reported do not reflect the amounts actually received by the parties. Instead, these amounts reported reflect the aggregate grant date fair value of all options and stock awards granted during fiscal year ended December 31, 2022, as computed in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in the notes to our financial statements included in our Annual Report. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.
|
Option Awards
|
Stock Awards
|
||||||||||||||||
Name
|
Grant Date
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Number of Shares of Stock That Have Not Vested (#)
|
Market Value of Shares of Stock That Have Not Vested ($) (1)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
|
||||||||
TJ Kennedy
|
4/19/2022
|
-
|
921,832
|
(2)
|
$2.89
|
4/19/2032
|
-
|
-
|
-
|
-
|
|||||||
4/19/2022
|
-
|
-
|
-
|
-
|
250,865
|
(3)
|
$423,962
|
-
|
-
|
||||||||
4/19/2022
|
-
|
475,662
|
(4)
|
$2.89
|
4/19/2032
|
-
|
-
|
-
|
-
|
||||||||
4/23/2021
|
26,250
|
3,750
|
(5)
|
$5.23
|
4/23/2031
|
-
|
-
|
-
|
-
|
||||||||
Kevin Mullins
|
4/19/2022
|
-
|
692,398
|
(6)
|
$2.89
|
4/19/2023
|
-
|
-
|
-
|
-
|
|||||||
4/19/2022
|
-
|
-
|
-
|
-
|
175,173
|
(7)
|
$296,042
|
-
|
-
|
||||||||
4/19/2022
|
-
|
356,747
|
(8)
|
$2.89
|
4/19/2032
|
-
|
-
|
-
|
-
|
||||||||
Chris DeAlmeida
|
7/25/2022
|
-
|
175,000
|
(9)
|
$1.82
|
7/25/2032
|
-
|
-
|
-
|
-
|
|||||||
7/25/2022
|
-
|
-
|
-
|
-
|
125,000
|
(10)
|
$211,250
|
-
|
-
|
||||||||
Glenn Hickman
|
3/2/2022
|
-
|
-
|
-
|
-
|
50,000
|
(11)
|
$196,500
|
-
|
-
|
|||||||
3/23/2021
|
33,055
|
36,945
|
(12)
|
$5.50
|
3/23/2031
|
-
|
-
|
-
|
-
|
||||||||
3/23/2021
|
-
|
-
|
-
|
-
|
20,000
|
(13)
|
$78,600
|
-
|
-
|
||||||||
Thomas Smith
|
3/8/2021
|
233,333
|
-
|
(14)
|
$5.22
|
1/24/2023
|
-
|
-
|
-
|
-
|
|||||||
4/1/2020
|
45,913
|
-
|
(14)
|
$4.26
|
1/24/2023
|
-
|
-
|
-
|
-
|
||||||||
3/18/2019
|
1,000,000
|
-
|
(14)
|
$5.41
|
1/24/2023
|
-
|
-
|
-
|
-
|
(1)
|
The market value is computed based on the closing market price of our Common Stock on December 31, 2022 of $1.69 per share.
|
(2)
|
As part of Mr. Kennedy’s Employment Agreement dated April 13, 2022, a nonqualified option to purchase 2.25% of the number of shares of the Company’s common stock that are issued and outstanding as of the Commencement Date, which will have an exercise price equal to the Fair Market Value (as defined in the Equity Plan) on the grant date, under the Equity Plan and which and will have terms and conditions substantially similar to those set forth in the Equity Plan and this Agreement (the “Performance Option”). The Performance Option will vest, subject to Executive’s continued employment with the Company through each vesting date, (x) with respect to 1/3rd of the award on the date on which the Company’s market capitalization meets or exceeds $250 million for each trading day during three consecutive months, (y) with respect to 1/3rd of the award on the date on which the Company’s market capitalization meets or exceeds $500 million for each trading day during three consecutive months, and (z) with respect to the remaining 1/3rd of the award on the date on which the Company’s market capitalization meets or exceeds $1 billion for each trading day during three consecutive months. The Performance Option will otherwise have terms and conditions as determined by the Board (or a committee thereof) consistent with the Equity Plan. For the avoidance of doubt, if there is a Corporate Transaction and the market capitalization of the Company implied by the applicable purchase price meets a threshold set forth in this subsection (iii), the three month period shall be disregarded and, with effect as of the consummation of such Corporate Transaction, the option shall (1) vest to the extent the market capitalization of the Company implied by the applicable purchase price meets or exceeds a threshold set forth in this Subsection (iii).and (2) be forfeited to the extent the market capitalization of the Company implied by the applicable purchase price does not meet or exceed a threshold set forth in Subsection (iii).
|
(3)
|
As part of Mr. Kennedy’s Employment Agreement dated April 13, 2022, an award of restricted stock units, under the Equity Plan and which will have terms and conditions set forth in the Equity Plan and this Agreement, with a grant date fair value equal to $675,000, which will (x) vest in substantially equal installments on each of the first through third anniversaries of the Commencement Date of grant, subject to Executive’s continued employment with the Company through each vesting date, (y) vest (to the extent then unvested) upon the later of (I) Executive’s satisfaction of the Release Condition following a Qualifying Termination and (II) the consummation of a Corporate Transaction (as defined in the Equity Plan), in each case, during the Change in Control Protection Period (as defined below), and (z) otherwise have terms and conditions as determined by the Board (or a committee thereof) consistent with the Equity Plan (the “RSU Award”). No portion of the RSU Award will be settled in shares of the Company’s common stock prior to the 18-month anniversary of the Commencement Date, and thereafter any vested portion of the RSU Award will be settled in shares of the Company’s common stock during the one-year period following each such vesting date, but in all events in compliance with, or exempt from, the requirements of Section 409A (as defined below)). For purposes of this Agreement, “Change in Control Protection Period” shall mean (1) the period beginning on the execution date of definitive documentation, the consummation of which would result in a Corporate Transaction and concluding on the date that is 18 months following the consummation of a Corporate Transaction (in all events subject to the consummation of the Corporate Transaction); and (2) solely to the extent the party or parties with which the Corporate Transaction is consummated requests or otherwise causes the Company to effect the Qualifying Termination, the period beginning on the date that is six months prior to the consummation of a Corporate Transaction (and in all events subject to the consummation of the Corporate Transaction).
|
(4)
|
As part of Mr. Kennedy’s Employment Agreement dated April 13, 2022, a nonqualified option to purchase shares of the Company’s common stock, under the Equity Plan and which will have terms and conditions set forth in the Equity Plan and this Agreement, with a grant date fair value equal to $675,000 and an exercise price equal to the Fair Market Value (as defined in the Equity Plan) on the grant date (the “Option Award”). The Option Award will (x) vest in substantially equal installments on each of the first through third anniversaries of the Commencement Date, subject to Executive’s continued employment with the Company through each vesting date, (y) upon the later of (I) Executive’s satisfaction of the Release Condition following a Qualifying Termination and (II) the consummation of a Corporate Transaction (as defined in the Equity Plan), in each case, during the Change in Control Protection Period (as defined below), and (z) otherwise have terms and conditions as determined by the Board (or a committee thereof) consistent with the Equity Plan.
|
(5)
|
Mr. Kennedy received stock compensation for his service on the Board of Directors from January 1, 2022 through April 17, 2022.
|
(6)
|
As part of Mr. Mullins’ Employment Agreement dated April 13, 2022, he received a nonqualified option to purchase 1.69% of the number of shares of the Company’s common stock that are issued and outstanding as of the Commencement Date, which will have an exercise price equal to the Fair Market Value (as defined in the Equity Plan) on the grant date, under the Equity Plan and which and will have terms and conditions substantially similar to those set forth in the Equity Plan and this Agreement (the “Performance Option”). The Performance Option will vest, subject to Executive’s continued employment with the Company through each vesting date, (x) with respect to 1/3rd of the award on the date on which the Company’s market capitalization meets or exceeds $250 million for each trading day during three consecutive months, (y) with respect to 1/3rd of the award on the date on which the Company’s market capitalization meets or exceeds $500 million for each trading day during three consecutive months, and (z) with respect to the remaining 1/3rd of the award on the date on which the Company’s market capitalization meets or exceeds $1 billion for each trading day during three consecutive months. The Performance Option will otherwise have terms and conditions as determined by the Board (or a committee thereof) consistent with the Equity Plan. For the avoidance of doubt, if there is a Corporate Transaction and the market capitalization of the Company implied by the applicable purchase price meets a threshold set forth in this subsection (iii), the three month period shall be disregarded and, with effect as of the consummation of such Corporate Transaction, the option shall (1) vest to the extent the market capitalization of the Company implied by the applicable purchase price meets or exceeds a threshold set forth in this Subsection (iii).and (2) be forfeited to the extent the market capitalization of the Company implied by the applicable purchase price does not meet or exceed a threshold set forth in Subsection (iii).
|
(7)
|
As part of Mr. Mullins’ Employment Agreement dated April 13, 2022, an award of restricted stock units, under the Equity Plan and which will have terms and conditions set forth in the Equity Plan and this Agreement, with a grant date fair value equal to $506,250, which will (x) vest in substantially equal installments on each of the first through third anniversaries of the Commencement Date of grant, subject to Executive’s continued employment with the Company through each vesting date, (y) vest (to the extent then unvested) upon the later of (I) Executive’s satisfaction of the Release Condition following a Qualifying Termination and (II) the consummation of a Corporate Transaction (as defined in the Equity Plan), in each case, during the Change in Control Protection Period (as defined below), and (z) otherwise have terms and conditions as determined by the Board (or a committee thereof) consistent with the Equity Plan (the “RSU Award”). No portion of the RSU Award will be settled in shares of the Company’s common stock prior to the 18-month anniversary of the Commencement Date, and thereafter any vested portion of the RSU Award will be settled in shares of the Company’s common stock during the one-year period following each such vesting date, but in all events in compliance with, or exempt from, the requirements of Section 409A (as defined below)). For purposes of this Agreement, “Change in Control Protection Period” shall mean (1) the period beginning on the execution date of definitive documentation, the consummation of which would result in a Corporate Transaction and concluding on the date that is 18 months following the consummation of a Corporate Transaction (in all events subject to the consummation of the Corporate Transaction); and (2) solely to the extent the party or parties with which the Corporate Transaction is consummated requests or otherwise causes the Company to effect the Qualifying Termination, the period beginning on the date that is six months prior to the consummation of a Corporate Transaction (and in all events subject to the consummation of the Corporate Transaction).
|
(8)
|
As part of Mr. Mullins’ Employment Agreement dated April 13, 2022, a nonqualified option to purchase shares of the Company’s common stock, under the Company’s Amended 2017 equity Compensation Plan or any successor plan thereto (the “Equity Plan”) and which will have terms and conditions set forth in the Equity Plan and this Agreement, with a grant date fair value equal to $506,250 and an exercise price equal to the Fair Market Value (as defined in the Equity Plan) on the grant date (the “Option Award”). The Option Award will (x) vest in substantially equal installments on each of the first through third anniversaries of the Commencement Date , subject to Executive’s continued employment with the Company through each vesting date, (y) upon the later of (I) Executive’s satisfaction of the Release Condition following a Qualifying Termination and (II) the consummation of a Corporate Transaction (as defined in the Equity Plan), in each case, during the Change in Control Protection Period (as defined below), and (z) otherwise have terms and conditions as determined by the Board (or a committee thereof) consistent with the Equity Plan.
|
(9)
|
As part of Mr. DeAlmeida’s offer letter dated July 13, 2022, he was granted 125,000 shares of restricted stock units which will vest in one third increments annually beginning July 25, 2023, subject to continued service.
|
(10)
|
As part of Mr. DeAlmeida’s offer letter dated July 13, 2022, he was granted an option to purchase 175,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on the day prior to the grant (the “Option”), which Option shall vest one-third after the first anniversary of the grant date, and one-third on each of the second and third anniversaries of the grant date, subject to continued service.
|
(11)
|
One third of the stock options vest on March 2, 2023, with the balance vesting ratably every six months beginning September 2, 2023, over the next two years thereafter.
|
(12)
|
One third of the stock options vest on July 1, 2022, with the balance vesting ratably each month beginning August 1, 2022, over the next two years thereafter.
|
(13)
|
A total of 30,000 RSUs were held by Mr. Hickman on the date of his appointment as Chief Operating Officer, with one-third, or 10,000 shares, vesting on July 1, 2022, and the balance vesting ratably every six months over the two-year period thereafter, subject to continued service. Mr. Hickman’s employment with the Company terminated on April 17, 2023. As a result of his termination, all unvested RSUs held by Mr. Hickman terminated.
|
(14)
|
As part of Mr. Smith’s severance agreement effective January 24, 2022, these options continue to vest in accordance with their terms of one-third at one year from grant with the balance ratably over the following 24 months, however, any options not vesting by December 31, 2022, were forfeited. Accordingly, 12,245 shares of April 1, 2020, options exercisable at $4.26 were forfeited and 166,667 shares of the March 8, 2021 options exercisable at $5.22 were forfeited. During the year ended December 31, 2021, Mr. Smith exercised options on 52,035 shares at $4.26 per share.
|
Kevin Mullins
|
Death or Disability
|
Retirement
|
Involuntary
termination without
cause or for good
reason, not during a
protection period
|
|||||||||
Severance
|
$ | - | $ | - | $ | 300,000 | ||||||
Annual Incentive*
|
$ | - | $ | - | $ | 150,000 | ||||||
Total
|
$ | - | $ | - | $ | 450,000 |
Chris DeAlmeida
|
Death or Disability
|
Retirement
|
Involuntary
termination without
cause or for good
reason, not during a
protection period
|
|||||||||
Severance
|
$ | - | $ | - | $ | 137,500 | ||||||
Annual Incentive*
|
$ | - | $ | - | $ | 137,500 | ||||||
Total
|
$ | - | $ | - | $ | 275,000 |
Fees
|
||||||||||||||||
Earned
|
Stock
|
Option
|
||||||||||||||
or Paid in
|
Awards
|
Awards
|
||||||||||||||
Name
|
Cash ($) (1)
|
($) (2) | ($) (3) |
Total ($)
|
||||||||||||
Scot Cohen
|
$ | 60,500 | $ | 60,500 | $ | - | $ | 121,000 | ||||||||
Wayne R. Walker
|
$ | 70,500 | $ | 60,500 | $ | - | $ | 131,000 | ||||||||
Michael Parris
|
$ | 60,500 | $ | 60,500 | $ | - | $ | 121,000 | ||||||||
Kimberly Sentovich
|
$ | 70,500 | $ | 60,500 | $ | - | $ | 131,000 | ||||||||
Kevin Sherman
|
$ | 70,500 | $ | 60,500 | $ | - | $ | 131,000 |
(1)
|
Each non-employee director was paid $15,125 per quarter during the year ended December 31, 2022, which was paid on a quarterly basis in arrears, for their services on the Board. Each independent director that chaired a standing committee of the Board was paid an additional annual cash payment of $10,000, pro-rated for the period served in 2022.
|
|
|
||
(2)
|
In accordance with the Amended Board Plan, as defined below, on November 16, 2022, Messrs. Parris, Sherman, Cohen, Walker and Ms. Sentovich each received a total 22,579 shares of Common Stock for their services provided in the first quarter, second quarter and third quarter 2022. The number of shares was calculated based on the amount due Messrs. Parris, Sherman, Cohen, Walker and Ms. Sentovich at the end of each quarter, divided by the closing price of the stock on such date. Additionally, on March 6, 2023, Messrs. Parris, Sherman, Cohen, Walker and Ms. Sentovich each received 8,950 shares of Common Stock for services provided in the fourth quarter 2022.
|
|
|
||
(3)
|
As of December 31, 2022, the aggregate number of shares of Common Stock underlying outstanding options held by our non-employee directors were as follows: Mr. Cohen, 250,000 shares; Mr. Parris, 50,000 shares; Ms. Sentovich, 30,000 shares; Mr. Sherman, 30,000 shares; and Mr. Walker, 35,000 shares.
|
●
|
each person or entity known by us to be the beneficial owner of 5% or more of the outstanding shares of Common Stock;
|
●
|
each person currently serving as director; and
|
●
|
each of our Named Executive Officers.
|
Common Stock
|
||||||||
Name and Address of Beneficial Owner (1)
|
Amount and
Nature of
Beneficial
Ownership
|
Percent of
Class
|
||||||
Named Executive Officers and Directors:
|
||||||||
Scot Cohen
|
5,226,357
|
(2)
|
12.6
|
%
|
||||
Kevin Mullins
|
366,938
|
(3)
|
*
|
|||||
Chris DeAlmeida
|
159,668
|
(4)
|
*
|
|||||
Michael Parris
|
308,374
|
(5)
|
*
|
|||||
Kimberly Sentovich
|
69,932
|
(6)
|
*
|
|||||
Kevin Sherman
|
74,182
|
(7)
|
*
|
|||||
Wayne R. Walker
|
113,731
|
(8)
|
*
|
|||||
Bruce Bernstein
|
100 | * | ||||||
Marc Savas
|
- | * | ||||||
All directors and named executive officers as a group (9 persons)
|
6,445,436
|
15.6
|
%
|
|||||
5% Shareholders
|
||||||||
Elwood G. Norris
|
6,472,457
|
(9)
|
15.6
|
%
|
(1)
|
Except as otherwise indicated, the business address for these beneficial owners is c/o the Company, 1817 W 4th Street, Tempe, Arizona 85281.
|
|
|
(2)
|
Includes 4,976,357 shares held by Mr. Cohen and 250,000 shares underlying stock options that may be exercised within 60 days from April 24, 2023.
|
|
|
(3)
|
Includes 248,023 shares held by Mr. Mullins and 118,915 shares underlying stock options that may be exercised within 60 days from April 24, 2023.
|
|
|
(4)
|
Includes 159,668 shares held by Mr. DeAlmeida and 0 shares underlying stock options that may be exercised within 60 days from April 24, 2022.
|
|
|
(5)
|
Includes 258,374 shares held by Mr. Parris and 50,000 shares underlying stock options that may be exercised within 60 days from April 24, 2023.
|
|
|
(6)
|
Includes 39,932 shares held by Ms. Sentovich and 30,000 shares underlying stock options that may be exercised within 60 days from April 24, 2023.
|
|
|
(7)
|
Includes 44,182 shares held by Mr. Sherman and 30,000 shares underlying stock options that may be exercised within 60 days from April 24, 2023.
|
|
|
(8)
|
Includes 83,731 shares held by Mr. Walker Norris directly and 30,000 shares beneficially owned by Mr. Elwood Norris through his family trust.
|
|
|
(9)
|
Includes 1,000,904 shares held by Mr. Elwood Norris directly and 5,471,553 shares beneficially owned by Mr. Elwood Norris through his family trust.
|
2022
|
2021
|
|||||||
Audit fees (1)
|
$
|
109,200
|
$
|
74,000
|
||||
Audit related fees (2)
|
3,897
|
10,000
|
||||||
Tax fees (3)
|
-
|
|||||||
All other fees (4)
|
-
|
|||||||
Total
|
$
|
113,097
|
$
|
84,000
|
(1)
|
Audit fees include fees and expenses for professional services rendered in connection with the audit of our financial statements for those years, reviews of the interim financial statements that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
|
(2)
|
Audit related fees consist of fees billed for assurance related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees”. Included in audit related fees are fees and expenses related to reviews of registration statements and SEC filings other than annual reports on Form 10-K and quarterly reports on Form 10-Q.
|
(3)
|
Tax fees include the aggregate fees billed during the fiscal year indicated for professional services for tax compliance, tax advice and tax planning. No such fees were billed by RRBB for 2022 or 2021.
|
(4)
|
All other fees consist of fees for products and services other than the services reported above. No such fees were billed by RRBB for 2022 or 2021.
|
Respectfully Submitted,
Kimberly Sentovich, Committee Chair
Michael Parris
Kevin Sherman
|
(a)
|
The following documents were filed as a part of Original Filing:
|
|
(1)
|
Financial Statements. The financial statements of Wrap Technologies, Inc. included in Part II, Item 8 of the Original filing.
|
|
(2)
|
Financial Statement Schedules. All schedules were omitted from the Original Filing because they were not applicable or the required information was shown in the financial statements or notes thereto.
|
|
(3)
|
Exhibits. The exhibits listed on the Exhibit Index of the Original Filing.
|
|
(b)
|
The exhibit list in the Exhibit Index immediately preceding the signature page of this Amendment are being filed as part of this Amendment.
|
Exhibit
Number
|
Description
|
Stock Purchase Agreement, dated March 22, 2017, by and between Wrap Technologies, LLC, Petro River Oil Corp., and Megawest Energy Montana Corp. Incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-1, filed on April 17, 2017.
|
|
Merger Agreement between Wrap Technologies, LLC and Megawest Energy Montana Corp., dated March 30, 2017. Incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-1, filed on April 17, 2017.
|
|
Amended and Restated Certificate of Incorporation of the Registrant. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1, filed on April 17, 2017.
|
|
Bylaws of the Registrant. Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1, filed on April 17, 2017.
|
|
Amended and Restated Bylaws of the Registrant. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed on February 10, 2023.
|
|
Form of Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form S-1, filed on May 30, 2017.
|
|
Form of Investor Warrant, dated October 30, 2018. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed on November 5, 2018.
|
|
Form of Placement Agent Warrant, dated October 30, 2018. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, filed on November 5, 2018.
|
|
Form of Investor Warrant, dated June 18, 2019. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed on June 18, 2019.
|
|
Form of Offering Agent Warrant, dated June 18, 2019. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed on June 18, 2019.
|
|
Form of Warrant Agreement. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, filed on June 2, 2020.
|
|
Amended and Restated Intellectual Property License Agreement, dated September 30, 2016, by and between Wrap Technologies, LLC and Syzygy Licensing LLC. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1, filed on April 17, 2017.
|
|
2017 Equity Compensation Plan. Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1, filed on April 17, 2017.
|
|
Form of Placement Agent Agreement, dated October 30, 2018. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on November 5, 2018.
|
|
Form of Registration Rights Agreement, dated October 30, 2018. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on November 5, 2018.
|
|
Supplemental Engagement Letter by and between Wrap Technologies, Inc. and Katalyst Securities LLC, dated June 7, 2019. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on June 13, 2019.
|
Engagement Letter by and between Wrap Technologies, Inc., Dinosaur Financial Group, LLC and Katalyst Securities LLC, dated June 12, 2019. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on June 18, 2019.
|
|
Amended 2017 Equity Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8, filed on June 24, 2019.
|
|
Industrial Real Estate Lease, dated May 10, 2019, by and between Wrap Technologies, Inc. and JM Sky Harbor Properties LLC. Incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed on June 6, 2019.
|
|
Promissory Note by and between Wrap Technologies, Inc. and Bank of America, N.A. dated May 1, 2020. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on May 5, 2020.
|
|
Consulting Agreement by and between the Company and V3, effective April 1, 2020. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8, filed on May 29, 2020.
|
|
Amendment No. 2 to the Wrap Technologies, Inc. 2017 Equity Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8, filed on June 17, 2020.
|
|
Form of Subscription Agreement. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on June 2, 2020.
|
|
Employment Agreement by and between Wrap Technologies, Inc., and Marc T. Thomas, dated July 30, 2020. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on July 31, 2020.
|
|
At-Will Employment, Confidential Information, Non-Compete/Non-Solicitation, Invention Assignment, and Arbitration Agreement, dated September 9, 2020 between the Company and Thomas Smith. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on September 14, 2020.
|
|
Asset Purchase Agreement between NSENA Inc. and Wrap Reality, Inc. dated as of December 14, 2020. In accordance with the instructions to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the Asset Purchase Agreement are not filed herewith. The Asset Purchase Agreement identifies such schedules and exhibits, including the general nature of their content. The Company undertakes to provide such schedules and exhibits to the SEC upon request. Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed on September 14, 2020.
|
|
Form of At-Will Employment, Confidential Information, Non-Compete/ Non-Solicitation, Invention Assignment, and Arbitration Agreement between the Key Employees and the Company dated December 14, 2020. Incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K, filed on September 14, 2020.
|
|
Cooperation Agreement by and between the Company and Elwood G. Norris and certain of his affiliates dated March 4, 2021. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on March 9, 2021.
|
|
Amendment No. 3 to the Wrap Technologies, Inc. 2017 Equity Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8, filed on November 5, 2021.
|
|
Separation Agreement between the Company and Mr. Smith, dated January 24, 2022. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on January 26, 2022.
|
|
Consulting Agreement between the Company and LWV Consulting, LLC, dated January 24, 2022. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on January 26, 2022.
|
|
Consulting Agreement between the Company and LRHIRSH, LLC, dated January 24, 2022. Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed on January 26, 2022.
|
|
Employment Agreement between Wrap Technologies, Inc. and TJ Kennedy, dated April 13, 2022. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on April 19, 2022.
|
|
Employment Agreement between Wrap Technologies, Inc. and Kevin Mullins, dated April 13, 2022. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on April 19, 2022.
|
|
Letter Agreement by and between Wrap Technologies, Inc. and Chris DeAlmeida, executed July 20, 2022. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on July 25, 2022.
|
|
Transition Agreement and Release of Claims, dated July 24, 2022, by and between Wrap Technologies, Inc. and James Barnes. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on July 25, 2022.
|
|
Professional Services and Technology Acquisition Agreement, dated November 22, 2022, by and between Wrap Technologies, Inc., Lumeto, Inc. and Spatial Industries Group, Inc. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on November 29, 2022.
|
Separation Agreement and Release of Claims, dated April 14, 2023, by and between Wrap Technologies, Inc. and TJ Kennedy. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on April 19, 2023.
|
|
Code of Ethics of the Registrant Applicable to Directors, Officers and Employees. Incorporated by reference to Exhibit 14.1 to the Annual Report on Form 10-K, filed on March 4, 2021.
|
|
Subsidiaries of Wrap Technologies, Inc. Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K, filed on March 4, 2021.
|
|
Consent of Independent Registered Public Accounting Firm - Rosenberg Rich Baker Berman, P.A. **
|
|
Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 *
|
|
Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 *
|
|
Certifications pursuant to 18 USC. Section 1350. This certification is being furnished solely to accompany this Annual Report on Form 10-K and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company.**
|
|
Extensible Business Reporting Language (XBRL) Exhibits**
|
|
101.INS
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL Document and include in Exhibit 101)
|
WRAP TECHNOLOGIES, INC
|
|||
Date: May 1, 2023
|
By:
|
/s/ Chris DeAlmeida
|
|
Chris DeAlmeida
|
|||
Chief Financial Officer, Secretary and Treasurer
(Principal Accounting Officer)
|
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