Wrap Technologies amends preferred stock terms

Wrap Technologies, Inc. (NASDAQ:WRAP), a manufacturer specializing in security technology, has announced significant amendments to the terms of its Series A Convertible Preferred Stock. The changes, effective as of Monday, August 19, 2024, were agreed upon with the required holders of the preferred stock.

The company has entered into an Amendment Agreement that allows for the payment of dividends due on July 1, 2024, and October 1, 2024, to be paid in either cash or shares of common stock at a discounted rate.

Specifically, the July dividends can be paid in shares priced at the lower of $1.00 or the Dividend Conversion Price, while the October dividends will be paid in shares at 80% of the average of the three lowest closing sale prices of the common stock in September 2024. The agreed-upon delivery date for these dividend payments is October 1, 2024.

Additionally, a Certificate of Amendment was filed with the Secretary of State, which modifies the Certificate of Designations to permit the payment of dividends in the form of common stock to directors, officers, or employees of the company, subject to approval by the company’s stockholders. This amendment also revises conditions related to mandatory conversion and the company's right to redeem the Series A Preferred Stock.

The Certificate of Amendment, which was filed and became effective on Friday, August 23, 2024, signifies a material modification to the rights of security holders, as it alters the terms under which the Series A Preferred Stock operates.

The adjustments to the Series A Preferred Stock terms reflect Wrap Technologies' strategic financial management and are detailed in the company's latest 8-K filing with the U.S. Securities and Exchange Commission.

The filing includes the full text of the Amendment and the Certificate of Amendment, providing transparency to investors and other stakeholders regarding the company's governance and financial arrangements.

In other recent news, Wrap Technologies, a company known for its advanced public safety solutions, has been making notable strides despite facing significant challenges. The company has announced a pilot program with the San Francisco Police Department, integrating 60 of its BolaWrap devices into their Field Training/Force Options Unit.

Wrap Technologies has also been addressing operational challenges, including compliance issues with the Nasdaq Stock Market. The company has submitted a comprehensive compliance plan to Nasdaq and has undergone significant corporate restructuring, including a decrease in operational expenses by 72%.

These steps aim to provide the necessary financial runway for Wrap Technologies to capitalize on upcoming market opportunities.

Despite these efforts, the company has faced compliance issues with the Nasdaq Stock Market due to delays in filing its Annual Report and Quarterly Report.

Additionally, the company's board member, Kevin Mullins, has resigned, leaving a vacancy that the company has yet to address. These are some of the recent developments within the company.

On a positive note, Wrap Technologies reported preliminary revenue of $6.1 million for FY-23 and operational gains, including its largest orders for BolaWrap and Body-Worn Cameras in the fourth quarter of 2023. The company also anticipates a 54.7% increase in revenue for the first quarter of 2024. These developments underscore the company's commitment to growth and market penetration despite the challenges it faces.

InvestingPro Insights

As Wrap Technologies, Inc. (NASDAQ:WRAP) navigates strategic financial management, real-time data from InvestingPro provides a snapshot of the company's current financial health. With a market capitalization of $70.52 million and a notably high revenue growth rate of 32.06% over the last twelve months as of Q3 2023, Wrap Technologies shows a robust top-line expansion. However, this growth is contrasted by significant operational challenges, as evidenced by an operating income margin of -172.59% for the same period, reflecting the company's difficulties in translating sales into operational profitability.

InvestingPro Tips suggest that Wrap Technologies holds more cash than debt on its balance sheet, which can be a sign of financial stability, and that its liquid assets exceed short-term obligations, providing some cushion against short-term financial distress. Nevertheless, analysts are not optimistic about the company's profitability in the near term, and the stock's performance has been quite volatile, with a six-month price total return showing a steep decline of 58.35%. Investors should also note that Wrap Technologies does not pay a dividend, which could influence the attractiveness of the stock for income-focused portfolios.

For those considering an investment in Wrap Technologies, additional insights are available. InvestingPro features a comprehensive list of tips, including further analysis on the company's cash burn rate and stock price volatility. To explore these additional tips and gain a deeper understanding of Wrap Technologies' financial outlook, visit https://www.investing.com/pro/WRAP.

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