10-K/A: Wrap Technologies Files Amendment to 10-K, Addressing Executive Compensation and Governance

Wrap Technologies files an amendment to its 2024 annual report on Form 10-K to include information regarding directors, executive officers, corporate governance, and executive compensation.

Summary

• Wrap Technologies filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
• The amendment includes information required by Items 10, 11, 12, 13, and 14 of Part III of the Original Filing, which were initially intended to be incorporated by reference from a definitive proxy statement.
• The company's Board of Directors consists of five members: Scot Cohen, Bruce Bernstein, Marc Savas, Rajiv Srinivasan, and Vice Admiral Tim Szymanski.
• The Board has determined that Bruce Bernstein, Marc Savas, Rajiv Srinivasan, and Vice Admiral Tim Szymanski are independent directors.
• Scot Cohen serves as Chief Executive Officer, Executive Chairman, Interim Principal Financial Officer, and Principal Accounting Officer.
• Jared Novick serves as President and Chief Operating Officer.
• The company has three standing committees: Audit Committee, Compensation Committee, and Nominating and Governance Committee.
• The Audit Committee consists of Bruce Bernstein, Marc Savas, and Rajiv Srinivasan, with Mr. Bernstein serving as the Chair.
• The Compensation Committee consists of Tim Szymanski, Bruce Bernstein, and Rajiv Srinivasan, with Mr. Bernstein serving as Chair.
• The Nominating and Governance Committee consists of Marc Savas, Rajiv Srinivasan, and Tim Szymanski, with Mr. Savas serving as Chair.
• The company has adopted a Code of Business Conduct and Ethics and an insider trading policy.
• The company's 2017 Equity Compensation Plan has 16,500,000 shares authorized for issuance, with 7,585,545 shares available for grant as of December 31, 2024.
• As of April 15, 2025, 50,554,267 shares of common stock were outstanding.
• Scot Cohen/V4 Global LLC is the largest beneficial owner, holding 24.40% of the common stock and 36.55% of the Series A Preferred Stock.
• The company engaged HTL International, LLC as its independent registered public accounting firm for the fiscal years ended December 31, 2023 and 2024.
• Audit fees for 2024 were $165,000 and for 2023 were $171,697.

Sentiment

Score: 6

Explanation: The document is primarily factual and descriptive, with a neutral tone. The amendment addresses routine compliance matters and executive changes, without significant positive or negative implications.

Positives

• The company has a defined Code of Business Conduct and Ethics.
• The company has an insider trading policy in place.
• The company has three standing committees: Audit Committee, Compensation Committee, and Nominating and Governance Committee.
• The company adopted a Compensation Recovery Policy on November 20, 2023, as an additional safeguard to mitigate compensation risks.

Negatives

• There were instances of late filings of Form 4s by directors and executive officers in 2024.
• Kevin Mullins resigned from his position as President of the Company, effective May 23, 2024.
• Chris DeAlmeida's employment as Chief Financial Officer of the Company was terminated without cause on January 5, 2024.

Risks

• The company's reliance on key personnel, such as Scot Cohen, could pose a risk if they were to leave or become unable to perform their duties.
• Potential risks associated with equity compensation plans, including dilution of existing shareholders' equity.
• The company's ability to maintain compliance with SEC regulations and Nasdaq listing standards.
• The company's ability to maintain effective internal controls over financial reporting.

Industry Context

This filing is a routine amendment to provide required information on executive compensation and corporate governance, which is standard practice for publicly traded companies.

Comparison to Industry Standards

• Executive compensation structures and director independence standards are generally in line with industry norms for companies of similar size and stage.
• The use of equity compensation plans is a common practice to align the interests of management and shareholders.
• The audit fee amounts appear reasonable compared to industry benchmarks for companies of similar complexity.

Management Changes

Corporate Governance

Related Party Transactions

• Scot Cohen, the Company's Chief Executive Officer, and V4 Global purchased 3,000 shares of Series A Preferred Stock and Series A Warrants to purchase up to an aggregate of 2,068,966 shares of common stock for aggregate gross proceeds of $3,000,000.
• For the year ended December 31, 2024, Mr. Cohen earned dividends totaling $432,944 on his Series A Preferred Stock.
• In February 2025, Mr. Cohen through V4 Global purchased an aggregate of 1,100,00 shares of common stock and PIPE Warrants to purchase up to an aggregate of 1,100,000 shares of common stock for aggregate gross proceeds of $1,980,000.
• In February 2025, Mr. Novick through Continuum Ventures LLC purchased an aggregate of 275,000 shares of common stock and PIPE Warrants to purchase up to an aggregate of 275,000 shares of common stock for aggregate gross proceeds of $495,000.
• In February 2025, Mr. Savas through Savbo Investments LLC purchased an aggregate of 50,000 shares of common stock and PIPE Warrants to purchase up to an aggregate of 50,000 shares of common stock for aggregate gross proceeds of $90,000.

Stakeholder Impact

• Shareholders are impacted by changes in executive compensation and equity ownership.
• Employees are impacted by changes in executive leadership and compensation policies.
• The company's financial performance and strategic direction impact all stakeholders.

Next Steps

• The company will continue to execute its business plan.
• The company will file its definitive proxy statement.
• The company will monitor and maintain compliance with SEC regulations and Nasdaq listing standards.

Key Dates

Keywords

executive compensation, corporate governance, directors, equity compensation, beneficial ownership, audit fees, Form 10-K/A, Wrap Technologies