WRAP TECHNOLOGIES, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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[
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Preliminary
Proxy Statement
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[
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Confidential,
for Use of the SEC Only (as permitted by
Rule 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[
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Definitive
Additional Materials
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[
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Soliciting
Material Pursuant to 14a-12
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WRAP TECHNOLOGIES, INC.
(Name
of Registrant as Specified in Its Charter)
_________________________________
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X]
No fee required.
[
] Fee computed on table below
per Exchange Act Rules 14a-6(i)(4) and 0-11.
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number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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Proposed
maximum aggregate value of transaction:
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fee paid:
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[
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with preliminary materials.
[
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is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
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Form,
Schedule or Registration Statement No.:
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Party:
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Wrap Technologies, Inc.
4620 Arville Street, Ste E
Las Vegas, Nevada 89103
(800) 583-2652
April 5
, 2019
Dear
Stockholders of Wrap Technologies, Inc.:
You are
cordially invited to attend the 2019 Annual Meeting of Stockholders
(the “
Annual Meeting
)
of Wrap Technologies, Inc. (the “
Company
”), which will be held in
the 7
th
floor Meeting Room at the
One America
Plaza building located at 600 West Broadway, San Diego, California
92101, on May 23, 2019 at 10:30 a.m. PT.
Details
of the business to be conducted at the Annual Meeting are described
in both the Notice of Internet Availability of Proxy Materials (the
“
Notice
”) you
received in the mail, and in this Proxy Statement. We have also
made a copy of our Annual Report on Form 10-K for the year ended
December 31, 2018 (“
Annual
Report
”) available with this Proxy Statement. We
encourage you to read our Annual Report. It includes our audited
financial statements and provides information about our business
and services.
As part of our efforts to conserve environmental resources and
prevent unnecessary corporate expense, we have elected to provide
access to our proxy materials over the Internet, rather than
mailing paper copies. We believe that providing our proxy materials
over the Internet increases the ability of our stockholders to
access the information they need, while lowering the costs of our
Annual Meeting and conserving natural resources.
Regardless of whether
you plan to attend the Annual Meeting in
person,
please
read the accompanying Proxy Statement and then vote by Internet,
telephone or e-mail as promptly as possible.
Please
refer to the Notice for instructions on submitting your vote.
Voting promptly will save us additional expense in further
soliciting proxies and will ensure that your shares are represented
at the Annual Meeting.
Our
Board of Directors has unanimously approved the proposals set forth
in the Proxy Statement and we recommend that you vote in favor of
each such proposal.
We look
forward to seeing you at the Annual Meeting.
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Sincerely,
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/s/ Scot
Cohen
Scot
Cohen
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Executive
Chairman
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YOUR VOTE IS IMPORTANT
All stockholders are cordially invited to attend the Annual Meeting
in person. However, to ensure your representation at the Annual
Meeting, you are urged to vote by Internet, telephone or e-mail as
soon as possible. Returning your proxy will help us assure that a
quorum will be present at the Annual Meeting and avoid the
additional expense of duplicate proxy solicitations. Any
stockholder attending the Annual Meeting may vote in person, even
if he or she has returned a proxy.
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Wrap Technologies, Inc.
4620 Arville Street, Suite E.
Las Vegas, Nevada 89103
Tel. (800) 583-2652
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on
May 23
,
2019
Dear
Stockholders of Wrap Technologies, Inc.:
We are pleased to invite you to attend the 2019 Annual Meeting of
Stockholders (the “
Annual
Meeting
”) of Wrap Technologies, Inc., a Delaware
corporation (the “
Company
”), which will be held in
the 7
th
floor Meeting Room at the
One America
Plaza building located at 600 West Broadway, San Diego, California
92101, on May 23, 2019 at 10:30 a.m. PT
, for the following
purposes:
1.
to elect five
directors to our Board of Directors, each to serve until our next
annual meeting of stockholders, or until their respective successor
is duly elected and qualified;
2.
to approve an
amendment to our 2017 Equity Compensation Plan (the
“
2017 Plan
”) to
increase the number of shares of Company common stock, par value
$0.0001 per share (“
Common
Stock
”), available for issuance thereunder from 2.0
million shares to
4.1
million
shares (the “
Plan
Amendment
”), and ratify all issuances made thereunder
to date;
3.
to ratify the
appointment of
Rosenberg Rich Baker
Berman, P.A.
as our independent auditors for the year ending
December 31, 2019; and
4.
to vote upon such
other matters as may properly come before the Annual Meeting and
any adjournment or postponement thereof.
These
matters are more fully discussed in the attached Proxy
Statement.
We have elected to
provide access to our proxy materials primarily over the Internet,
pursuant to the Securities and Exchange Commission’s
“notice and access” rules. We believe this process
expedites stockholders’ receipt of proxy materials, while
lowering the costs of our Annual Meeting and conserving natural
resources. We intend to mail a Notice of Internet Availability of
Proxy Materials (the “
Notice
”)
to each of our stockholders entitled to notice of and to vote at
the Annual Meeting on or about April 8, 2019, which will contain
instructions for accessing the attached Proxy Statement, our Annual
Report on Form 10-K for the fiscal year ended December 31, 2018
(“
Annual
Report
”) and voting
instructions. The Notice will also include instructions on how you
can receive a paper copy of your proxy materials. The Proxy
Statement and the Annual Report both are available online at:
www.colonialstock.com/wrap2019.
The
close of business on March 20, 2019 (the “
Record Date
”) has been fixed as
the Record Date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournments
or postponements thereof. Only holders of record of our Common
Stock at the close of business on the Record Date are entitled to
notice of, and to vote at, the Annual Meeting. A complete list of
stockholders entitled to vote at the Annual Meeting will be
available for examination by any of our stockholders for purposes
pertaining to the Annual Meeting at our corporate offices, located
at 4620 Arville Street, Suite E., Las Vegas, Nevada 89103, during
normal business hours for a period of ten days prior to
the Annual Meeting, and at the time and place of the Annual
Meeting.
Whether or not you expect to attend in person, we urge you to vote
your shares as promptly as possible by Internet, telephone or
e-mail so that your shares may be represented and voted at the
Annual Meeting.
If your shares are held in the
name of a bank, broker or other fiduciary, please follow the
instructions on the voting instruction card furnished by the record
holder.
Our
Board of Directors recommends that you vote “FOR” each
of the director nominees identified in Proposal No. 1 and
“FOR” Proposal Nos. 2 and 3. Each of these Proposals
are described in detail in the accompanying Proxy
Statement.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING TO BE HELD ON
MAY 23
,
2019:
THE ANNUAL REPORT AND PROXY STATEMENT ARE AVAILABLE ONLINE
AT:
www.colonialstock.com/wrap2019
.
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By
Order of the Board of Directors,
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/s/ Scot
Cohen
Scot
Cohen
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Executive
Chairman
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Las
Vegas, Nevada
April
5, 2019
Wrap Technologies, Inc.
4620 Arville Street, Suite E.
Las Vegas, Nevada 89103
Tel. (800) 583-2652
PROXY STATEMENT
The
enclosed proxy is solicited on behalf of the Board of Directors
(“
Board
”) of
Wrap Technologies, Inc., a Delaware corporation (the
“
Company
”), for
use at the Company’s 2019 Annual Meeting of Stockholders (the
“
Annual
Meeting
”) to be held on May 23, 2019 at 10:30 a.m. PT,
and at any adjournment or postponement thereof, in the
7
th
floor
Meeting Room at the
One America Plaza
building located at 600 West Broadway, San Diego, California
92101
.
We have elected to
provide access to this year’s proxy materials primarily over
the Internet under the Securities and Exchange Commission’s
(“
SEC
”) “notice
and access” rules. We intend to mail a Notice of Internet
Availability of Proxy Materials (the “
Notice
”)
to each of our stockholders entitled to notice of and to vote at
the Annual Meeting on or about April 8, 2019, which will contain
instructions for accessing the attached Proxy Statement, our Annual
Report on Form 10-K for the fiscal year ended December 31, 2018
(“
Annual
Report
”) and voting
instructions. The Notice will also include instructions on how you
can receive a paper copy of your proxy
materials.
This
Proxy Statement and the Annual Report can also be accessed free of
charge online as of April 5, 2019 at:
www.colonialstock.com/wrap2019
.
Voting
The
specific proposals to be considered and acted upon at our Annual
Meeting are each described in this Proxy Statement. Only
holders of our common stock, par value $0.0001 per share
(“
Common
Stock
’’), as of the close of business on March
20, 2019 (the “
Record
Date
”) are entitled to notice of and to vote at the
Annual Meeting. On the Record Date, there were
27,364,607
shares of Common Stock issued
and outstanding. Each holder of Common Stock is entitled to one
vote for each share held as of the Record Date.
Quorum
In order for any business to be conducted at the
Annual Meeting, a quorum must be present. The presence at the
Annual Meeting, either in person or by proxy, of holders of the
Company’s Common Stock entitled to vote and representing at
least a majority of the Company’s outstanding voting power
will constitute a quorum for the transaction of business. If you
submit a properly executed proxy, regardless of whether you abstain
from voting on one or more matters, your shares will be counted as
present at the Annual Meeting for the purpose of establishing a
quorum. Shares that constitute broker non-votes will also be
counted as present at the Annual Meeting for the purpose of
establishing a quorum. If a quorum is not present at the scheduled
time of the Annual Meeting, the stockholders who are present may
adjourn the Annual Meeting until a quorum is present. The time and
place of the adjourned Annual Meeting will be announced at the time
the adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be
conducted at the Annual Meeting.
Required Vote for Approval
Proposal No. 1: Election of Directors.
Directors are elected by a plurality
vote.
This means that the five director nominees who receive
the greatest number of affirmative votes cast at the Annual Meeting
by the shares present, either in person or by proxy and entitled to
vote, will be elected.
Abstentions and
broker non-votes will have no effect on the outcome of the election
of the directors.
Proposal No. 2:
Plan Amendment, and Ratification of all Issuances Made Thereunder
to Date.
To approve the
amendment to our 2017
Equity Compensation Plan (the
“
2017 Plan
”)
to increase
the number of shares of Common Stock authorized for issuance
thereunder from 2.0 million shares to 4.1 million shares (the
“
Plan
Amendment
’), and to ratify
all issuances made thereunder to date, the number of votes cast
“FOR” must exceed the number of votes cast
“AGAINST” this Proposal.
A properly executed proxy marked
“ABSTAIN” will not be voted, although it will be
counted as present and entitled to vote for purposes of the
Proposal. Accordingly, an abstention will have the effect of a
vote against this Proposal. A broker or nominee will not have
discretionary authority to vote on this Proposal because it is
considered a non-routine matter. Accordingly, broker non-votes will
have no effect on the outcome of this Proposal.
-1-
Proposal No. 3: Ratification of Appointment of
Auditors.
To ratify the
appointment of
Rosenberg Rich
Baker Berman, P.A.
as our independent
auditors for the fiscal year ending December 31, 2019, the number
of votes cast “FOR” must exceed the number of votes
cast “AGAINST” this Proposal.
A properly executed proxy marked
“ABSTAIN” will not be voted, although it will be
counted as present and entitled to vote for purposes of the
Proposal. Accordingly, an abstention will have the effect of a
vote against this Proposal. A broker or other nominee will
generally have discretionary authority to vote on this Proposal
because it is considered a routine matter, and therefore we do not
expect broker non-votes with respect to this Proposal. However, any
broker non-votes received will have no effect on the outcome of
this Proposal.
Broker Non-Votes
A
“broker non-vote” occurs when a nominee (typically a
broker or bank) holding shares for a beneficial owner (typically
referred to as shares being held in “street name”)
submits a proxy for the Annual Meeting, but does not vote on a
particular proposal because the nominee has not received voting
instructions from the beneficial owner and does not have
discretionary authority to vote the shares with respect to that
proposal.
Brokers
and other nominees may vote on “routine” proposals on
behalf of beneficial owners who have not furnished voting
instructions, subject to the rules applicable to broker nominees
concerning transmission of proxy materials to beneficial owners,
and subject to any proxy voting policies and procedures of those
firms. The ratification of the independent registered public
accountants, for example, is a routine proposal. Brokers and other
nominees may not vote on “non-routine” proposals,
unless they have received voting instructions from the beneficial
owner. The election of directors and approval of the Plan Amendment
are considered “non-routine” proposals. This means that
brokers and other firms must obtain voting instructions from the
beneficial owner to vote on these matters; otherwise they will not
be able to cast a vote for such “non-routine” proposal.
If your shares are held in the name of a broker, bank or other
nominee, please follow their voting instructions so you can
instruct your broker on how to vote your shares.
Voting and Revocation of Proxies
If your
proxy is properly returned to the Company, the shares represented
thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If you return your proxy without
specifying how the shares represented thereby are to be voted, the
proxy will be voted (i)
FOR
the election of the five
director nominees named in this proxy statement, (ii)
FOR
the Plan Amendment, and ratification
of all issuances made under our 2017 Plan to date,
(iii)
FOR
ratification of the appointment
of Rosenberg Rich Baker Berman, P.A. as our independent auditors
for the current fiscal year, and (iv) at the discretion of the
proxy holders on any other matter that may properly come before the
Annual Meeting or any adjournment or postponement
thereof.
You may
revoke or change your proxy at any time before the Annual Meeting
by filing, with our Corporate Secretary at our principal executive
offices, located at 4620 Arville Street, Suite E., Las Vegas,
Nevada 89103, a notice of revocation or another signed proxy with a
later date. You may also revoke your proxy by attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting
alone will not revoke your proxy. If you are a stockholder
whose shares are not registered in your own name, you will need
additional documentation from your broker or record holder to vote
personally at the Annual Meeting.
No Appraisal Rights
The stockholders of the Company have no dissenter’s or
appraisal rights in connection with any of the proposals described
herein.
Solicitation
We will
bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of the Notice, as well as the
preparation and posting of this Proxy Statement, the Annual Report
and any additional solicitation materials furnished to the
stockholders. Copies of any solicitation materials will be
furnished to brokerage houses, fiduciaries and custodians holding
shares in their names that are beneficially owned by others so that
they may forward this solicitation material to such beneficial
owners. In addition, we may reimburse such persons for their costs
in forwarding the solicitation materials to such beneficial owners.
The original solicitation of proxies may be supplemented by a
solicitation by telephone, e-mail or other means by our directors,
officers or employees. No additional compensation will be paid to
these individuals for any such services. Except as described above,
we do not presently intend to solicit proxies other than by e-mail,
telephone and mail.
-2-
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
Our
Bylaws provide that
that the
number of
directors that constitute the entire Board of Directors (the
“
Board
”)
shall be fixed from time to time by resolution adopted by a
majority of the entire Board, but that in no event shall the number
be less than three. A director elected by the Board to fill a
vacancy shall serve for the remainder of the term of that director
and until the director’s successor is duly elected and
qualified. Our Board currently consists of five directors, each of
whom has been nominated by our Nominating and Governance Committee
for election at the Annual Meeting. The five director nominees for
election at the Annual Meeting consist of: Scot Cohen, David
Norris, Michael Parris, Patrick Kinsella and Wayne R.
Walker.
Each nominee, if elected at the Annual Meeting,
will hold office for a one-year term until the next Annual Meeting
of Stockholders or until their successor is duly elected, unless
prior thereto the director resigns or the director’s office
becomes vacant by reason of death or other cause. If any such
person is unable or unwilling to serve as a nominee for the office
of director at the date of the Annual Meeting or any postponement
or adjournment thereof, the proxies may be voted for a substitute
nominee, designated by the proxy holders or by the present Board to
fill such vacancy, or for the balance of those nominees named
without nomination of a substitute, and the Board may be reduced
accordingly. The Board has no reason to believe that any of
such nominees will be unwilling or unable to serve if elected as a
director.
Required Vote and Recommendation
The
election of directors requires the affirmative vote of a plurality
of the voting shares present in person or represented by proxy and
entitled to vote at the Annual Meeting. The five nominees receiving
the highest number of affirmative votes will be elected.
Abstentions and broker non-votes will
have no effect on the outcome of the election of the
directors.
Unless otherwise instructed or unless authority
to vote is withheld, shares represented by executed proxies will be
voted “FOR” the election of the director nominees
listed above.
The
Board recommends that the stockholders vote “
FOR
” the election of
Messrs. Cohen, Norris, Parris, Kinsella and Walker.
Director Nominees
The
following section sets forth certain information regarding the
nominees for election as directors of the Company. David Norris is
the son of Elwood G. Norris, the Company's Chief Technology Officer
and a former director. There are no additional family relationships
between any of the directors and the Company’s executive
officers.
BOARD OF DIRECTORS
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Name
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Age
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Positions
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Director Since
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Scot
Cohen
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50
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Executive Chairman
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2017
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David
Norris
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53
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Director
and Chief Executive Officer
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2018
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Michael
Parris
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60
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Director
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2017
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Patrick
Kinsella
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65
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Director
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2018
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Wayne
R. Walker
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60
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Director
|
2018
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Scot
Cohen
cofounded the Company
with Mr. James Barnes and Mr. Elwood Norris in March 2016, and
currently serves as its Executive Chairman. He served as a Manager
until the Company’s incorporation in March 2017, when he was
appointed to serve as the Company’s Corporate Secretary. In
July 2017, Mr. Cohen was appointed to serve as the Company’s
Executive Chairman, and in January 2018 he resigned as Corporate
Secretary. Mr. Cohen has over 20 years of experience in
institutional asset management, wealth management, and capital
markets. He currently serves as Executive Chairman of the
Board of Petro River Oil Corp. (OTC Pink: PTRC), a position he has
held since 2012. Mr. Cohen is the founder and serves as a principal
of the Iroquois Capital Opportunity Fund, a closed end private
equity fund focused on investments in North American oil and gas
assets. He is also the co-founder of Iroquois Capital, a New
York based hedge fund. In addition, he manages several
operating and non-operating partnerships, which actively invest in
the energy sector.
Mr. Cohen
currently sits on the board of directors of True Drinks Holding,
Inc. (OTC Pink: TRUU). Mr. Cohen earned a Bachelor of Science
degree from Ohio University in 1991.
The
Board of Directors believes Mr. Cohen’s success with multiple
private investment firms, his extensive contacts within the
investment community and financial expertise will assist the
Company’s efforts to raise capital to fund the continued
implementation of the Company’s business plan.
-3-
David
Norris
was appointed as a
director of the Company and the Company’s President in
January 2018, and was promoted to the Company’s Chief
Executive Officer in December 2018. Prior to joining the Company,
he served in senior executive roles at privately held loanDepot,
Inc. from April 2014 to December 2017, during which time it rapidly
expanded into the fifth largest mortgage lender in the United
States. Most recently, he served as Chief Revenue Officer of
loanDepot, with prior executive positions including President and
Chief Operating Officer. In October 2012, Mr. Norris was appointed
as Chief Executive Officer of Greenlight Financial Services, which
was sold to Nationstar Mortgage in May 2013, whereupon he served as
President of Direct Lending and Chief Marketing Officer until
February 2014. Mr. Norris also previously served as President at
LendingTree, Inc. and Discover Home Loans. In addition, Mr.
Norris’ career includes executive and management roles at
Toshiba America Information Systems, Qualcomm Personal Electronics
and American Technology Corporation. His early career was as a
probation officer in San Diego for five years. Mr. Norris earned
his Bachelor of Science degree in business administration from
University of Phoenix in 1993.
Mr.
Norris brings to the Company and the Board of Directors significant
executive experience in rapidly growing businesses and a background
in developing, launching and manufacturing new
products.
Michael
Parris
was appointed as a director of the Company in
November 2017.
Mr. Parris has been a
partner at Perry Rogers Partners Inc. (“
Perry
Rogers
”), a sports
management firm, since 1996, where he primarily oversees the SHAQ
Brand and other strategic alliances. His role at Perry Rogers
encompasses business development, worldwide brand management,
marketing and public relations. Prior to joining Perry Rogers, Mr.
Parris had a successful career in law enforcement with the Newark
Police Department in Newark, New Jersey rising to the rank of
Lieutenant. During his career in law enforcement, he worked and
commanded several specialized units, including Homicide, Robbery,
and Internal Affairs. Mr. Parris holds a Bachelor of Science degree
in Business Management from the University of
Phoenix.
Mr. Parris
brings to the Board of Directors
and management valuable experience and insights into the market
served by the Company given his
background in law enforcement and worldwide
marketing and brand experience.
Patrick Kinsella
was
appointed as a director of the Company in November 2018.
Mr. Kinsella currently serves as an adjunct professor at the
USC Marshall School of Business, a position that he has held since
August 2011. In 2014, he was appointed as a director and the
Chairman of the audit committee of PennyMac Financial Services,
Inc. (“
PennyMac
”)
(NYSE: PFSI). Prior to his retirement as a senior audit partner in
May 2013, Mr. Kinsella spent over 37 years at with KPMG LLP
serving clients generally concentrated in the financial services
sector, including banks, thrifts, mortgage companies, automotive
finance companies, alternative investment companies and real estate
companies. Mr. Kinsella received a Bachelor of Science Degree
in Accounting from California State University, Northridge, and is
a licensed certified public accountant in the State of
California.
The Board of Directors believes that Mr. Kinsella is qualified
to serve as a director of the Company due to his extensive
experience in providing professional accounting and auditing
services and his experience serving as Chairman of the Audit
Committee of PennyMac.
Wayne R.
Walker
was appointed as a
director of the Company in November 2018. In 2003, Mr. Walker
founded Walker Nell Partners, Inc. (“
Walker Nell
”),
an international business
consulting firm providing corporate governance and
restructuring, fiduciary services, litigation support, and other
services to client corporations and law firms
, where he continues to serve as the
president.
In his role at Walker Nell, he has served on a
number of private company boards. He has also been active on
various charitable boards, and currently serves as Chairman of
the Board of Trustees of National Philanthropic Trust, a public
charity that holds over $6.0 billion of assets under management, as
Vice President of Board of Education of the City of Philadelphia,
and as a member of the board of Eagleville Hospital and Foundation.
Mr. Walker has more than 25 years of
experience in corporate law and corporate restructuring, including
working 15 years at the DuPont Company in the Securities and
Bankruptcy group, where he worked in the Corporate
Secretary’s office and served as Senior Counsel. He holds a
Bachelor of Arts Degree from Loyola University New Orleans and a
Juris Doctorate from Catholic University of America. He also
studied finance for non-financial managers at the University of
Chicago’s Graduate School of
Business.
The
Board of Directors believes that Mr. Walker is qualified to serve
as a director of the Company due to his substantial knowledge and
more than 25 years of experience in corporate governance,
restructuring and corporate litigation.
-4-
Director Nominations
The
Board nominates directors for election at each annual meeting of
stockholders, appoints new directors to fill vacancies when they
arise, and has the responsibility to identify, evaluate and recruit
qualified candidates to the Board for such nomination or
appointment.
The
Board of Directors identifies director nominees by first
considering those current members of the Board who are willing to
continue service. Current members of the Board with skills and
experience that are relevant to our business and who are willing to
continue service are considered for re-nomination, balancing the
value of continuity of service by existing members of the Board
with that of obtaining a new perspective. Nominees for director are
selected by a majority of the members of the Board of Directors.
Although the Company does not have a formal diversity policy, in
considering the suitability of director nominees, the Board
considers such factors as it deems appropriate to develop a Board
that is diverse in nature and comprised of experienced and seasoned
advisors. Factors considered by the Board include judgment,
knowledge, skill, diversity, integrity, experience with businesses
and other organizations of comparable size, including experience in
law enforcement, the use of force product industry, intellectual
property, business, corporate governance, marketing, finance,
administration or public service, the relevance of a
candidate’s experience to our needs and experience of other
Board members, experience with accounting rules and practices, the
desire to balance the considerable benefit of continuity with the
periodic injection of the fresh perspective provided by new
members, and the extent to which a candidate would be a desirable
addition to the Board and any committees of the Board.
A
stockholder who wishes to suggest a prospective nominee for the
Board may notify the Secretary of the Company in writing with any
supporting material the stockholder considers appropriate. Nominees
suggested by stockholders are considered in the same way as
nominees suggested from other sources.
Director Independence
Our Board of Directors has reviewed the
independence of our directors based on the listing standards of the
Nasdaq Stock Market. Based on this review, the Board of Directors
determined that Messrs. Parris, Kinsella and Walker are
independent, as defined in Rule 5605(a)(2) of the Nasdaq Stock
Market Rules. In making this determination, our Board of Directors
considered the relationships that each of these non-employee
directors has with us and all other facts and circumstances our
Board of Directors deemed relevant in determining their
independence.
Board Meetings
Directors
hold office until the next annual meeting of the stockholders or
until their successors have been elected or appointed and duly
qualified. Vacancies on the Board that are created by the
retirement, resignation or removal of a director, may be filled by
the vote of the majority of the remaining members of the Board,
with such new director serving the remainder of the term or until
his/her successor shall be elected and qualified.
The
Board of Directors is elected by and is accountable to our
stockholders. The Board establishes policy and provides
strategic direction, oversight, and control. The Board met
five times during the year ended December 31, 2018 and all
incumbent directors attended at least 75% of the aggregate number
of meetings of the Board and of the committees on which such
directors served.
Committees of the Board of Directors
Our
Board of Directors established an Audit Committee, Compensation
Committee and Nominating and Governance Committee in November 2018.
Prior to that, we did not have any formal committees, and as a
result, the full Board of Directors administered the duties of an
audit committee, compensation committee and nominating and
governance committee.
Our Board of
Directors has adopted written charters for each of the foregoing
committees. Copies of the charters are available on our website.
Our Board of Directors may establish other committees as it deems
necessary or appropriate from time to time.
Audit Committee
The
Audit Committee provides assistance to our Board of Directors in
fulfilling its legal and fiduciary obligations in matters involving
our accounting, auditing, financial reporting, internal control and
legal compliance functions by approving the services performed by
our independent accountants and reviewing their reports regarding
our accounting practices and systems of internal accounting
controls. The Audit Committee also oversees the audit efforts of
our independent accountants and takes those actions as it deems
necessary to satisfy it that the accountants are independent of
management. The Audit Committee currently consists of Messrs.
Kinsella, Walker and Parris, each of whom is a non-management
member of our Board of Directors that we believe meets the criteria
for independence under the applicable Nasdaq Stock Market Rules and
SEC rules and regulations. Mr. Kinsella is also our Audit Committee
financial expert, as currently defined under current SEC
rules. We believe that the composition of our Audit Committee
meets the criteria for independence under the applicable Nasdaq
Stock Market Rules and SEC rules and regulations, and the
functioning of our Audit Committee complies with the applicable
Nasdaq Stock Market Rules and SEC rules and
regulations.
-5-
The
Audit Committee, formed in November 2018, met one time during the
year ended December 31, 2018, and all members of the Audit
Committee attended the meeting. The Audit Committee met with
our Chief Financial Officer and with our independent registered
public accounting firm and evaluated the responses by the Chief
Financial Officer, both to the facts presented and to the judgments
made by our independent registered public accounting
firm.
Compensation Committee
The
Compensation Committee determines our general compensation policies
and the compensation provided to our directors and officers. The
Compensation Committee also reviews and determines bonuses for our
officers and other employees. In addition, the Compensation
Committee reviews and determines equity-based compensation for our
directors, officers, employees and consultants and administers our
2017 Plan. The Compensation Committee currently consists of
Messrs. Walker, Kinsella and Parris, each of whom is a
non-management member of our Board of Directors that we believe
meets the criteria for independence under the applicable Nasdaq
Stock Market Rules and SEC rules and regulations. We believe that
the composition of our Compensation Committee meets the criteria
for independence under the applicable Nasdaq Stock Market Rules and
SEC rules and regulations, and the functioning of our Compensation
Committee complies with the applicable Nasdaq Stock Market Rules
and SEC rules and regulations.
The
Compensation Committee, formed in November 2018, met one time
during the year ended December 31, 2018, and all members of the
Compensation Committee attended the meeting.
Nominating and
Governance Committee
The
Nominating and Governance Committee is responsible for making
recommendations to our Board of Directors regarding candidates for
directorships and the size and composition of our Board of
Directors. In addition, the Nominating and Governance Committee is
responsible for overseeing our corporate governance guidelines and
reporting and making recommendations to the full Board of Directors
concerning corporate governance matters. The Nominating and
Governance Committee currently consists of Messrs. Walker, Kinsella
and Parris.
The
Nominating and Governance Committee, formed in November 2018, held
one meeting during the year ended December 31, 2018, and all
members of the Nominating and Governance Committee attended the
meeting.
Board Role in Risk Assessment
Management,
in consultation with outside professionals, as applicable,
identifies risks associated with the Company’s operations,
strategies and financial statements. Risk assessment will also be
performed through periodic reports received by the Audit Committee
from management, counsel and the Company’s independent
registered public accountants relating to risk assessment and
management. Audit Committee members will meet privately in
executive sessions with representatives of the Company’s
independent registered public accountants. The Board of Directors
also provides risk oversight through its periodic reviews of the
financial and operational performance of the Company.
Board Leadership Structure
Currently,
our Principal Executive Officer is David Norris and the Executive
Chairman of our Board of Directors is Scot Cohen. Our Board of
Directors has determined that it is in the best interests of the
Board and the Company to maintain separate the roles for the
Principal Executive Officer and Chairman of the Board. Our Board of
Directors believes this structure increases the Board’s
independence from management and, in turn, leads to better
monitoring and oversight of management. Although our Board of
Directors believes the Company is currently best served by
separating the role of Chairman of the Board of Directors and
Principal Executive Officer, our Board of Directors will
review and consider the continued appropriateness of this structure
on an annual basis.
Indemnification of Officers and Directors
As
permitted by the Delaware General Corporation Law, the
Company will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or
satisfy any civil or criminal action
brought against them on account of their being or
having been Company directors or officers
unless, in any such action, they are adjudged to have acted
with gross negligence or willful misconduct.
Code of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics applicable to
all of our employees, including our principal executive officer,
principal financial officer and principal accounting officer. We
will provide any person, without charge, a copy of our Code of
Business Conduct and Ethics upon written request to Investor
Relations, Wrap Technologies, Inc., 4620 Arville Street, Ste E. Las
Vegas, Nevada 89103. We also post on our website a copy of or Code
of Business Conduct and Ethics at
www.wraptechnologies.com.
-6-
Stockholder Communications
If you
wish to communicate with the Board of Directors, you may send your
communication in writing to:
Wrap
Technologies, Inc.
4620
Arville Street, Suite E.
Las
Vegas, Nevada 89103
Attn:
Corporate Secretary
You
must include your name and address in the written communication and
indicate whether you are a stockholder of the Company. Our
Secretary will review any communication received from a
stockholder, and all material and appropriate communications from
stockholders will be forwarded to the appropriate director or
directors or committee of the Board of Directors based on the
subject matter.
Section 16(a) Beneficial Ownership Reporting
Compliances
Section 16(a) of the Securities Exchange Act of
1934, as amended (the “
Exchange
Act
”) requires our
officers, directors, and persons who beneficially own more than 10%
of our common stock to file reports of ownership and changes in
ownership with the SEC. Officers, directors, and
greater-than-ten-percent shareholders are also required by the SEC
to furnish us with copies of all Section 16(a) forms that they
file.
Based
solely on a review of copies of such reports furnished to our
Company and representation that no other reports were required
during the fiscal year ended December 31, 2018, we believe that all
persons subject to the reporting requirements pursuant to Section
16(a) filed the required reports on a timely basis with the
Securities and Exchange Commission except for the
following:
●
Elwood Norris, the
Company’s Chief Technology Officer, filed one Form 4
disclosing one late transaction; and
●
Wayne Walker, a
director on the Company’s Board, filed one Form 4 disclosing
one late transaction.
EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
Executive Officers
Our
executive officers are appointed by the Board and serve at the
discretion of the Board, subject to the terms of any employment
agreements they may have with the Company. The following is a brief
description of the present and past business experience of each of
the Company’s current executive officers.
|
Name
|
Age
|
Positions
|
|
David
Norris
|
53
|
Chief
Executive Officer
|
|
James
A. Barnes
|
64
|
Chief Financial Officer, Secretary
and Treasurer
|
|
Michael
Rothans
|
57
|
Chief
Operating Officer
|
|
Elwood
G. Norris
|
80
|
Chief
Technology Officer
|
|
Thomas
P. Smith
|
51
|
President
|
David Norris.
Please
see Mr. Norris’ biography on page 4 of this Proxy Statement,
under the section entitled “
Directors
.”
James A.
Barnes
cofounded the Company
with Mr. Elwood Norris and Mr. Cohen in March 2016, and currently
serves as Chief Financial Officer, Secretary and Treasurer. He
served as Manager until the Company’s incorporation in March
2017, and served as a member of the Company’s Board of
Directors from March 2017 to November 2018. He has served as the
President of Sunrise Capital, Inc., a private venture capital and
financial and regulatory consulting firm, since 1984. He was Chief
Financial Officer of Parametric Sound Corporation (now Turtle Beach
Corporation) (Nasdaq GM: HEAR) from 2010 to February 2015, and from
February 2015 to February 2017 served as Vice President
Administration at Turtle Beach Corporation. Since 1999, he has been
Manager of Syzygy Licensing LLC
(“
SYZYGY
”)
, a private technology
invention and licensing company he owns with Mr. Elwood Norris. He
previously practiced as a certified public accountant and
management consultant with Ernst & Ernst (1976-1977), Touche
Ross & Co. (1977-1980), and as a principal in J. McDonald &
Co. Ltd., Phoenix, Arizona (1980-1984). He graduated from the
University of Nebraska with a Bachelor of Arts Degree in Business
Administration in 1976 and is a certified public accountant
(inactive).
-7-
Michael Rothans
joined the Company in September 2017
as Senior Vice President of Business Development, a position that
he held until November 2018, at which point he was appointed as the
Company’s Chief Operating Officer. As Senior Vice President
of Business Development, he was responsible for engaging larger
police agencies across the United States. Prior to joining the
Company, Mr. Rothans served as a police officer and executive in
the Los Angeles County Sheriff’s Department for thirty-one
years, where he retired as the Assistant Sheriff overseeing the
department’s patrol operations in 2015. While there, he
worked in all aspects of law enforcement, including custody,
patrol, investigative, administrative, supervisory and management
roles. In addition, he was responsible for a nearly
one-billion-dollar budget and supervised over 6,000 sworn and
civilian personnel. Mr. Rothans received many commendations during
his career, including the Los Angeles County Sheriff’s
Department Distinguished Service Award in 1997 and 2010, the
Exemplary Service Award in 2001, 2005, and 2009, and, the
Meritorious Service Award in 2008. In addition, as Chair of the
Executive Force Review Committee responsible for reviewing all
Officer Involved Shootings and significant uses of force, he
developed invaluable knowledge about real world encounters between
police and the public. Mr. Rothans graduated from Loyola Marymount
University in 1984 with a Bachelor of Arts Degree in Political
Science, immediately after which he joined the police
academy.
Elwood G.
Norris
cofounded the Company
with Mr. Barnes and Mr. Cohen in March 2016 and currently serves as
the Company’s Chief Technology Officer. He served as a
director on the Company’s Board of Directors from March 2017
to January 2018. He was previously a director and President of
Parametric Sound Corporation (now Turtle Beach Corporation) (Nasdaq
GM: HEAR) from 2010 to February 2015, and from February 2015 to
September 2016 he served as Chief Scientist, a non-executive
position, at Turtle Beach. He was a director of LRAD
Corporation (Nasdaq CM: LRAD) from August 1980 to June 2010.
He served as Chairman of LRAD Corporation’s Board of
Directors, an executive position, in which he served in a technical
advisory role and acted as a product spokesman from September 2000
to April 2009. He is an inventor, and has authored more than 80
U.S. patents, primarily in the fields of electrical and acoustical
engineering, and has been a frequent speaker on innovation to
corporations and government organizations. He is the inventor of
our BolaWrap technology. Mr. Elwood Norris is a majority owner of
Syzygy, but has no employment or management relationship with
Syzygy.
Thomas P.
Smith
joined
the Company in March 2019 as President. Mr. Smith
co-founded TASER International (now Axon
Enterprise, Inc. – Nasdaq: AAXN) (“
TASER
”) in 1993. He served as President of TASER
until October 2006, and as Chairman of the Board of Directors of
TASER from October 2006 until he retired to pursue entrepreneurial
activities in February 2012. Amongst his most significant roles and
responsibilities at TASER, Mr. Smith managed domestic and
international export sales, significantly expanding the sale and
distribution of TASER’s products, including sales to more
than 17,200 federal, state and local law enforcement agencies in
over 100 countries. In 2012 he co-founded Achilles Technology
Solutions, LLC (“
Achilles
”), and through its wholly-owned subsidiary
ATS Armor, LLC (“
ATS Armor
”), which he co-founded in 2015, developed a
line of ballistic solutions for law enforcement and military. Mr.
Smith has served, and continues to serve, as the Managing Member of
Achilles. In addition, Mr. Smith served as the Managing Member of
ATS Armor and ATS MER (“
ATS MER
”), a research and development company
acquired by Achilles in 2015 that was primarily funded by
government SBIR contracts, until March 2019 and February 2019,
respectively. ATS Armor filed a petition for Chapter 7 Bankruptcy
in March 2019, and ATS MER filed a petition for Chapter 7
Bankruptcy in February 2019. Mr. Smith holds a B.S. degree in
Ecology and Evolutionary Biology from the University of Arizona and
a M.B.A. degree from Northern Arizona
University.
There
are no arrangements or understandings between our Company and any
other person pursuant to which he was or is to be selected as a
director, executive officer or nominee. David Norris is the son of
Elwood G. Norris, the Company’s Chief Technology Officer and
a former director.
-8-
Summary Compensation Table
The following table sets forth information
regarding the compensation awarded to or earned by the executive
officers listed below during the years ended December 31, 2018 and
2017. As an emerging growth company, we have opted to comply with
the reduced executive compensation disclosure rules applicable to
“smaller reporting companies,” as such term is defined
in the rules promulgated under the Securities Act of 1933, as
amended (the “
Securities
Act
”), which require
compensation disclosure for only our principal executive officer
and the two most highly compensated executive officers other than
our principal executive officer. Throughout this document, these
three officers are referred to as our “named executive
officers.”
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Option Awards
(1)
|
All Other Compensation
|
Total
|
|
|
|
|
|
|
|
|
|
David Norris
(2)
|
2018
|
$
120,000
|
$
-
|
$
268,238
|
$
-
|
$
388,238
|
|
Chief Executive Officer and Director
|
2017
|
$
7,960
|
$
-
|
$
-
|
$
-
|
$
7,960
|
|
|
|
|
|
|
|
|
|
Scot Cohen
(3)
|
2018
|
$
120,000
|
$
-
|
$
74,056
|
$
-
|
$
194,056
|
|
Executive Chairman and Director
|
2017
|
$
-
|
$
50,000
(4)
|
$
-
|
$
-
|
$
50,000
|
|
|
|
|
|
|
|
|
|
James
A. Barnes
|
2018
|
$
120,000
|
$
-
|
$
74,056
|
$
-
|
$
194,056
|
|
Chief Financial Officer, Secretary and Treasurer
|
2017
|
$
64,000
|
$
-
|
$
-
|
$
-
|
$
64,000
|
(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 each stock option granted to the
named executive officers during the fiscal year ended December 31,
2018, 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. 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.
(2)
Mr. Norris was
appointed to serve as the Company’s President in January
2018, and was promoted to the position of Chief Executive Officer
of the Company in December 2018.
(3)
Mr.
Cohen was appointed to serve as the Company’s Executive
Chairman in July 2017.
(4)
During
2017 there was no compensation arrangement between Mr. Cohen and
the Company for his services as the Company’s Executive
Chairman. In February 2018, the Board of Directors granted and the
Company paid a $50,000 bonus to Mr. Cohen as compensation for his
services to the Company during 2017.
Effective
March 2016 through February 2017, the Company accrued monthly
deferred compensation for the services of officers Messrs. Elwood
Norris and Barnes in the aggregate amount of $7,000 per month
payable to Syzygy with Mr. Barnes’ proportionate share being
$2,000 per month. The balance as of December 31, 2018 was $70,000
($20,000 allocable to Mr. Barnes), and at February 28, 2017 was
$84,000 ($24,000 allocable to Mr. Barnes), which amount accrues
without interest. There is currently no established repayment
schedule or timing for payment. Commencing March 1, 2017, Messrs.
Elwood Norris and Barnes were each being paid compensation of
$6,000 per month for their services as employees and officers of
the Company with March 2017 amounts deferred with no established
repayment schedule or timing for payment.
Syzygy, an entity controlled by Messrs. Elwood
Norris and Barnes, will receive a royalty as described above in
“
Business—Related Party
License and Royalties
” in
consideration for the license of certain technology necessary for
the development of BolaWrap 100. We expect that Messrs. Elwood
Norris and Barnes will continue to be compensated in their roles as
officers as determined by our Board of
Directors.
Employment Arrangements
We
have no employment letters or contracts with any named executive
officer.
-9-
Outstanding Equity Awards as of December 31, 2018
The
following table provides information regarding each unexercised
stock option to purchase our Common Stock held by our named
executive officers as of December 31, 2018. As of December 31,
2018, our named executive officers did not hold any RSU’s or
similar 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
|
|
|
|
|
|
|
|
|
David
Norris
|
5/23/2018
|
-
|
500,000
(1)
|
$
1.50
|
5/23/2023
|
|
|
|
|
|
|
|
|
Scot
Cohen
|
5/23/2018
|
75,000
|
75,000
(2)
|
$
1.50
|
5/23/2023
|
|
|
|
|
|
|
|
|
James
A. Barnes
|
5/23/2018
|
75,000
|
75,000
(2)
|
$
1.50
|
5/23/2023
|
(1)
50% of these options vest on 5/23/2019 and the
balance over 12 months thereafter.
(2)
These
options vest on 5/23/2019.
Potential Payments Upon Termination, Death, Disability, or
Retirement
We
have no executive employee contracts at this time. Every officer
and employee is an at-will employee. The royalties payable to
Syzygy, controlled by Messrs. Elwood Norris and Barnes, are
unrelated to employment or their roles as officers, and will
continue upon any termination, death, disability or
retirement.
Compensation Risks Assessment
As
required by rules adopted by the SEC, management has made an
assessment of our compensation policies and practices with respect
to all employees to determine whether risks arising from those
policies and practices are reasonably likely to have a material
adverse effect on us. In doing so, management considered various
features and elements of the compensation policies and practices
that discourage excessive or unnecessary risk taking. As a result
of the assessment, we have determined that our compensation
policies and practices do not create risks that are reasonably
likely to have material adverse effects.
NON-EXECUTIVE DIRECTOR COMPENSATION
The
following table sets forth the compensation awarded to, earned by,
or paid to each person who served as a director during the fiscal
year ended December 31, 2018, other than a director who also served
as an executive officer:
|
Name
|
Fees Earned or Paid in Cash ($)
(1)
|
Option Awards ($)
(2)
|
Total
($)
|
|
|
|
|
|
|
Michael
Parris
|
$
38,500
(3)
|
$
26,824
|
$
65,324
|
|
|
|
|
|
|
Patrick
Kinsella
|
$
5,500
|
$
47,110
|
$
52,610
|
|
|
|
|
|
|
Wayne
R. Walker
|
$
5,500
|
$
47,110
|
$
52,610
|
(1)
Each
director earns $3,500 per month, which is paid on a quarterly
basis, for their services on the Board.
(2)
The amounts
reported do not reflect the amounts actually received by our
non-employee directors. Instead, these amounts reported reflect the
aggregate grant date fair value of all options granted to our
non-employee directors during fiscal year ended December 31, 2018,
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. As of
December 31, 2018, the aggregate number of shares of Common Stock
underlying outstanding options held by our non-employee directors
were as follows: Mr. Parris, 50,000 shares; Mr. Kinsella, 35,000
shares and Mr. Walker, 35,000 shares.
(3)
During
2018, terminating in October 2018, Mr. Parris was paid an aggregate
of $13,500 for marketing consulting services.
-10-
PROPOSAL NO. 2
AMENDMENT TO OUR 2017 EQUITY COMPENSATION PLAN AND RATIFICATION OF
ALL ISSUANCES MADE THEREUNDER TO DATE
Background of Plan and Purpose of the Plan Amendment
The 2017 Plan was adopted by our Board of Directors and approved by
a majority of our stockholders on March 31, 2017. The 2017 Plan
reserved 2.0 million shares of our Common Stock for issuance as one
of four types of equity incentive awards: (i) stock options, (ii)
shares of Common Stock, (iii) restricted stock awards, and (iv)
restricted stock units. The 2017 Plan permits the qualification of
awards under the 2017 Plan as “performance-based
compensation” within the meaning of
Section 162(m) of the Internal Revenue Code. Currently, a
total of 1,967,500 shares are reserved for issuance upon exercise
of outstanding options under the 2017 Plan. As a result, we
currently only have 32,500 shares available for issuance as stock
options or other awards under the 2017 Plan. The proposed Plan
Amendment will allow the Company to maintain a sufficient pool of
available shares for future grants under the 2017
Plan.
The 2017 Plan provides for the issuance of stock
based awards to attract and retain the services of executives,
other key employees and certain contractors. Keeping a
proportionate number of shares available for issuance under the
2017 Plan in relation to our issued and outstanding shares of
Common Stock provides the ability and flexibility to present
compensation packages that compare favorably with those offered by
other companies. As only 32,500 shares are currently available
for issuance under the 2017 Plan, on March 16, 2019 our Board voted
unanimously to adopt the Plan Amendment to provide for an
additional 2.1 million shares for future grants under the 2017
Plan.
As of the date of this
Proxy Statement, options to purchase a total of 1.0 million shares
of Common Stock have been issued to an officer of the Company,
conditioned upon stockholder approval of the Plan Amendment and
ratification of such issuances by the Company’s stockholders,
which approval must occur on or prior to March 16, 2020 or such
options shall be rendered null and void. Details regarding these
issuances are presented below, under the section entitled
“
Awards
Granted under the 2017 Plan
.”
Although
we do not currently have any definitive arrangements or agreements,
either written or oral, regarding the issuance of additional awards
pursuant to the 2017 Plan either prior or subsequent to the
effectiveness of the Plan Amendment, we may issue additional awards
under the 2017 Plan to certain individuals prior to obtaining
stockholder approval of the Plan Amendment. In the event that we do
issue additional awards under the 2017 Plan prior to the
effectiveness of the Plan Amendment, all such issuances will also
be conditioned upon stockholder approval of the Plan
Amendment.
Summary Description of the 2017 Plan
The
2017 Plan is intended to (i) encourage ownership of shares by our
employees and directors and certain consultants to the Company;
(ii) induce them to work for the benefit of the Company; and (iii)
provide additional incentive for such persons to promote the
success of the Company.
Administration
The
Compensation Committee of the Board administers the 2017 Plan,
which permits the granting of equity awards to purchase up to 2.0
million shares of our Common Stock, which number will increase to
4.1
million shares of our
Common Stock on the day of the Annual Meeting, subject to the
receipt of stockholder approval of the Plan Amendment.
The
2017 Plan permits the Compensation Committee to grant
one of four types of
equity incentive awards: (i) stock options, (ii) shares of Common
Stock, (iii) restricted stock awards, and (iii) restricted stock
units.
The
Compensation Committee may delegate to a committee of one or more
members of the Board the authority to grant or amend awards to
participants other than senior executives of the Company who are
subject to Section 16 of the Exchange Act, or employees who are
“covered employees” within the meaning of Section
162(m) (“
Section
162(m
)”) of the Internal Revenue Code (the
“
Code
”). The Compensation
Committee includes at least
two
directors, each of whom qualifies as a non-employee director
pursuant to Rule 16b-3 of the Exchange Act, and an “outside
director” pursuant to Section 162(m).
The
Compensation Committee, or a committee delegated by the
Compensation Committee, will have the exclusive authority to
administer the 2017 Plan, including the power to determine
eligibility, the types and sizes of awards, the price and timing of
awards and the acceleration or waiver of any vesting restriction,
provided that the Compensation Committee will not have the
authority to accelerate vesting or waive the forfeiture of any
performance-based awards.
-11-
Eligibility
Persons
eligible to participate in the 2017 Plan include non-employee
members of the Board, certain consultants to the Company, and all
of the employees of the Company and its subsidiaries, as determined
by the Compensation Committee.
Awards
The
2017 Plan provides for the grant of (i) stock options,
(iii) Common Stock, (iv) restricted stock awards, and (v)
restricted stock units.
Changes in Capital Structure
In the
event of a dissolution or liquidation of the Company, then all
outstanding Stock Awards (as defined in the 2017 Plan) shall
terminate immediately prior to such event. In the event of
(i) a sale, lease or other disposition of all or substantially
all of the assets of the Company, (ii) a merger or
consolidation in which the Company is not the surviving corporation
or (iii) a reverse merger in which the Company is the
surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash
or otherwise (individually, a “
Corporate Transaction
”), then any
surviving corporation or acquiring corporation shall assume any
Stock Awards outstanding under the 2017 Plan or shall substitute
similar stock awards (including an award to acquire the same
consideration paid to the stockholders in the Corporate
Transaction) for those outstanding under the 2017
Plan. In the event any surviving corporation or
acquiring corporation refuses to assume such Stock Awards or to
substitute similar stock awards for those outstanding under the
2017 Plan, then with respect to Stock Awards held by Participants
whose Continuous Service has not terminated, the vesting of such
Stock Awards (and, if applicable, the time during which such Stock
Awards may be exercised) shall be accelerated in full, and the
Stock Awards shall terminate if not exercised (if applicable) at or
prior to the Corporate Transaction. With respect to any other
Stock Awards outstanding under the 2017 Plan, such Stock Awards
shall terminate if not exercised (if applicable) prior to the
Corporate Transaction. Notwithstanding the foregoing provisions of
this paragraph, Participants shall be allowed not less than six
months to exercise Stock Awards so vested.
In
addition, in such a case or in the event of any unusual or
nonrecurring transactions or events affecting the Company or of
changes in applicable laws, the Compensation Committee, may,
subject to the terms of the 2017 Plan, take any of the following
actions if it determines that such action is appropriate in order
to prevent the dilution or enlargement of benefits or potential
benefits intended to be made available under the 2017 Plan or with
respect to any award: (i) provide for either the termination,
purchase or replacement of the awards, (ii) provide that the awards
shall be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by
similar awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, (iii)
make adjustments in the number and type of shares of stock (or
other securities or property) subject to outstanding awards and/or
in the terms and conditions of (including the exercise price), and
the criteria included in, outstanding awards which may be granted
in the future, (iv) provide for the acceleration of vesting or
exercisability of the awards and (v) provide that the awards cannot
vest or be exercised after the event that triggers the
action.
Amendment and Termination
The
Compensation Committee, subject to approval of the full Board of
Directors, may terminate, amend, or modify the 2017 Plan at any
time;
provided
,
however
, that stockholder
approval must be obtained for any amendment to the extent necessary
or desirable to comply with any applicable law, regulation or stock
exchange rule, to increase the number of shares available under the
2017 Plan, to extend the exercise period for an option beyond ten
years from the date of grant or to allow a material increase in the
benefits or change the eligibility requirements under the 2017
Plan.
In no
event may an award be granted pursuant to the 2017 Plan on or after
the tenth anniversary of the effectiveness of the 2017
Plan.
U.S. Federal Income Tax Consequences
Under
the 2017 Plan, stock options may be granted which are intended to
qualify as Incentive Stock Options under Section 422 of the
Internal Revenue Code of 1986, or which are not intended to qualify
as Incentive Stock Options. In addition, direct grants of stock or
restricted stock may be awarded. Accordingly, the 2017 Plan is, in
part, a qualified plan for Federal income tax purposes. As such,
the Company is entitled to (a) withhold and deduct from future
wages of any participant, or make other arrangements for the
collection of, all legally required amounts necessary to satisfy
any and all federal, state and local withholding and
employment-related tax requirements attributable to an Incentive
Stock Option, including, without limitation, the grant, exercise or
vesting of, or payment of dividends with respect to, an Incentive
Stock Option or a disqualifying disposition of stock received upon
exercise of an Incentive Stock Option, or (b) require the
participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of
Common Stock, with respect to an Incentive Stock
Option.
-12-
Awards Granted Under the 2017 Plan
Because
grants under the 2017 Plan are subject to the discretion of the
Compensation Committee, awards under the 2017 Plan that may be made
in the future are not determinable. Future exercise prices for
options granted under the 2017 Plan are also not determinable
because they will be based upon the fair market value of the
Company’s common stock on the date of
grant.
The
following table discloses all awards granted to the persons or
groups specified below under the current version of the 2017 Plan
as of our most recently completed fiscal year ended December 31,
2018:
|
|
|
All Other
|
|
|
|
|
|
Option Awards:
|
Exercise
|
Grant
|
|
|
|
Number of
|
Price of
|
Date Fair
|
|
|
|
Securities
|
Option
|
Value of
|
|
|
Grant
|
Underlying
|
Awards
|
Option Awards
|
|
Name and Position
|
Date
|
Options (#)
|
($/Share)
(1)
|
($)
(2)
|
|
|
|
|
|
|
|
David
Norris
|
5/23/2018
|
500,000
|
$
1.50
|
$
268,238
|
|
Chief Executive
Officer
|
|
|
|
|
|
Scott Cohen
|
5/23/2018
|
150,000
|
$
1.50
|
$
74,056
|
|
Executive
Chairman
|
|
|
|
|
|
James A.
Barnes
|
5/23/2018
|
150,000
|
$
1.50
|
$
74,056
|
|
Chief Financial
Officer, Secretary and Treasurer
|
|
|
|
|
|
Michael Rothans
|
5/23/2018
|
110,000
|
$
1.50
|
$
59,012
|
|
Chief Operating
Officer
|
|
|
|
|
|
Elwood G. Norris
|
5/23/2018
|
150,000
|
$
1.50
|
$
74,056
|
|
Chief Technology
Officer
|
|
|
|
|
|
Outside Directors
|
5/23/18
and 11/14/18
|
120,000
|
$
1.50 to $3.61
|
$
121,044
|
|
Employees and
Consultants
(excluding
executive officers)
|
Various
in 2018
|
787,500
|
$
1.50 to $3.85
|
$
532,169
|
(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 the
Nasdaq Capital Market (for those options issued after December 4,
2018) or OTCQB operated by the OTC Markets (when issued prior to
December 4, 2018), 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 granted during fiscal year
ended December 31, 2018, 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.
The
following table sets forth information with respect to issuances
under the 2017 Plan that are subject to the ratification of such
grants by our stockholders through the date of this Proxy
Statement:
|
Name
and Position
|
Issuances
under the
2017
Plan
|
|
|
No.
of Shares
|
|
Thomas
Smith
|
1,000,000
(1)
|
|
President
|
|
|
|
|
|
Total
|
1,000,000
|
(1)
Such
options were granted on March 18, 2019, have a term of five years,
an exercise price of $5.41 per share, and vest as follows: (i) 1/3
one year from the date of grant, and (ii) the remainder in equal
monthly installments over the two years thereafter. As of the date
of this Proxy Statement, such options have not vested or otherwise
become eligible for exercise by Mr. Smith. In the event that
stockholder approval of the Plan Amendment is not approved by our
stockholders prior to March 16, 2020, such options will be deemed
null and void.
As
noted above, although we do not currently have any definitive
arrangements or agreements, either written or oral, regarding the
issuance of additional awards pursuant to the 2017 Plan either
prior or subsequent to the effectiveness of the Plan Amendment, we
may issue additional awards under the 2017 Plan to certain
individuals priorto obtaining stockholder approval of the Plan
Amendment. In the event that we do issue additional awards under
the 2017 Plan prior to the effectiveness of the Plan Amendment, all
such issuances will also be conditioned upon stockholder approval
of the Plan Amendment.
A vote in favor of
this item will have the result of ratifying the issuance of the
options set forth in the table above as well as the approval of the
Plan Amendment.
-13-
Equity Compensation Plan Information
The
following table sets forth information as of December 31, 2018,
with respect to compensation plans (including individual
compensation arrangements) under which our equity securities are
authorized for issuance, aggregated as follows:
|
Plan Category
|
Number of securities to be
issued
upon exercise of
outstanding
options,
warrants
and rights
(a)
|
Weighted-average exercise
price
of outstanding
options,
warrants and
rights
(b)
|
Number of securities
remaining available for
future
issuance under
equity compensation plans
(excluding
securities
reflected
in column (a))
(c)
|
|
Equity
compensation plans approved by security holders
|
1,967,500
|
$
1.62
|
32,500
|
|
Equity
compensation plans not approved by security holders
|
100,000
|
$
3.00
|
-
|
|
Total
|
2,067,500
|
$
1.68
|
32,500
|
Vote Required
To approve Plan
Amendment and ratify the all issuances made under the 2017 Plan to
date, the number of votes cast “FOR” must exceed the
number of votes cast “AGAINST” this Proposal.
A properly executed proxy marked
“ABSTAIN” will not be voted, although it will be
counted as present and entitled to vote for purposes of the
Proposal. Accordingly, an abstention will have the effect of a
vote against this Proposal. A broker or nominee will not have
discretionary authority to vote on this Proposal because it is
considered a non-routine matter. Accordingly, broker non-votes will
have no effect on the outcome of this Proposal.
Unless
otherwise instructed on the proxy or unless authority to vote is
withheld, shares represented by executed proxies will be voted
“FOR” the adoption of the Plan Amendment.
Board of Directors Recommendation
The
Board recommends a vote “FOR” the Plan Amendment and
ratification of all issuances made thereunder to date.
-14-
PROPOSAL NO. 3
RATIFICATION OF THE APPOINTMENT OF
ROSENBERG RICH BAKER BERMAN, P.A. TO SERVE AS OUR
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL
YEAR
Upon
recommendation of the Audit Committee of the Board of Directors,
the Board appointed Rosenberg Rich Baker Berman, P.A. as our
independent registered public accounting firm for the year ending
December 31, 2019, and hereby recommends that the stockholders
ratify such appointment.
The
Board may terminate the appointment of Rosenberg Rich Baker Berman,
P.A. as the Company’s independent registered public
accounting firm without the approval of the Company’s
stockholders whenever the Board deems such termination necessary or
appropriate.
Representatives of
Rosenberg Rich Baker Berman, P.A. will be present at the Annual
Meeting or available by telephone and will have an opportunity to
make a statement if they so desire and to respond to appropriate
questions from stockholders.
Audit Fees
The
following table presents fees billed by Rosenberg Rich Baker
Berman, P.A. for professional services rendered for the fiscal
years ended December 31, 2018 and 2017:
|
|
2018
|
2017
|
|
Audit fees
(1)
|
$
25,500
|
$
25,500
|
|
Audit related fees
(2)
|
3,000
|
4,075
|
|
Tax fees
(3)
|
-
|
-
|
|
All other fees
(4)
|
-
|
-
|
|
Total
|
$
28,500
|
$
29,575
|
(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 Rosenberg Rich Baker
Berman, P.A. for 2018 or 2017.
(4)
All
Other Fees consist of fees for products and services other than the
services reported above. No such fees were billed by Rosenberg Rich
Baker Berman, P.A. for 2018 or 2017.
Audit Committee Pre-Approval Policies and Procedures
All audit and non-audit services are pre-approved
by the Audit Committee, and were pre-approved by the full Board of
Directors prior to the formation of the Audit Committee in November
2018, which considers, among other things, the possible effect of
the performance of such services on the registered public
accounting firm’s independence. The Audit Committee
pre-approves the annual engagement of the principal independent
registered public accounting firm, including the performance of the
annual audit and quarterly reviews for the subsequent fiscal year,
and pre-approves specific engagements for tax services performed by
such firm. The Audit Committee has also established pre-approval
policies and procedures for certain enumerated audit and audit
related services performed pursuant to the annual engagement
agreement, including such firm’s attendance at and
participation at Audit Committee and Board of Director meetings;
services of such firm associated with SEC registration statements,
periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings, such as
comfort letters and consents; such firm’s assistance in
responding to any SEC comment letters; and consultations with such
firm as to the accounting or disclosure treatment of transactions
or events and/or the actual or potential impact of final or
proposed rules, standards or interpretations by the SEC, Public
Company Accounting Oversight Board (“
PCAOB
”), Financial Accounting Standards Board
(“
FASB
”), or other regulatory or standard-setting
bodies. The Audit Committee is informed of each service performed
pursuant to its pre-approval policies and
procedures.
The
Audit Committee has considered the role of Rosenberg Rich Baker
Berman, P.A. in providing services to us for the year ended
December 31, 2018 and has concluded that such services are
compatible with such firm’s independence.
-15-
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in or disagreements
with accountants on accounting and financial
disclosure.
Auditor Independence
Our Audit Committee and our full Board of
Directors considered that the work done for us in the years ended
December 31, 2018 and 2017, respectively, by
Rosenberg
Rich Baker Berman, P.A
was compatible
with maintaining
Rosenberg Rich Baker Berman, P.A
independence.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF
DIRECTORS
Date:
March 7, 2019
The Audit Committee has reviewed and discussed
with management and
Rosenberg Rich Baker Berman,
P.A.
, our independent registered
public accounting firm, the audited consolidated financial
statements in the
Wrap Technologies, Inc.
Annual Report on Form 10-K for the year ended
December 31, 2018.
Rosenberg Rich
Baker Berman, P.A.
also provided the
Audit Committee with the written disclosures and the letter
required by the applicable requirements of the PCAOB regarding the
independent auditor’s communication with the Audit Committee
concerning independence. The Audit Committee has discussed with the
registered public accounting firm their independence from our
Company.
Based
on its discussions with management and the registered public
accounting firm, and its review of the representations and
information provided by management and the registered public
accounting firm, including as set forth above, the Audit Committee
recommended to our Board that the audited financial statements be
included in our Annual Report on Form 10-K for the year ended
December 31, 2018.
|
|
Respectfully Submitted,
Patrick
Kinsella
Wayne
Walker
Michael
Parris
|
The information contained above under the caption
“
Report of the Audit Committee
of the Board of Directors
” shall not be deemed to be soliciting
material or to be filed with the SEC, nor shall such information be
incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, except to the extent that we specifically
incorporate it by reference into such filing.
Required Vote and Recommendation
Ratification of the
selection of Rosenberg Rich Baker Berman, P.A. as the
Company’s independent auditors for the fiscal year ending
December 31, 2019 requires the affirmative vote of a majority of
the shares present or represented by proxy and entitled to vote at
the Annual Meeting. Unless otherwise instructed on the proxy or
unless authority to vote is withheld, shares represented by
executed proxies will be voted “FOR” the ratification
of Rosenberg Rich Baker Berman, P.A. as the Company’s
independent auditors for the fiscal year ending December 31,
2019.
The
Board recommends that stockholders vote “
FOR
” the ratification of
the selection of Rosenberg Rich Baker Berman, P.A. as our
independent auditors for the fiscal year ending December 31,
2019.
-16-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
As
of April 1, 2019, we had one class of voting stock outstanding:
Common Stock. The following table sets forth information concerning
shares of our Common Stock beneficially owned as of April 1, 2019
(unless otherwise noted), by:
●
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.
The
share amounts in the table below are based on 27,364,607 shares of
Common Stock issued and outstanding as of April 1, 2019. To our
knowledge, except as otherwise indicated in the footnotes below,
each person or entity has sole voting and investment power with
respect to the shares of Common Stock set forth opposite such
person’s or entity’s name. Beneficial ownership is
determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to the
securities.
|
Title of Class
|
Name and Address of Beneficial Owner
(1)
|
Amount and Nature of Beneficial Ownership
|
Percent of Class
|
|
|
|
|
|
|
Common
Stock
|
Elwood
G. Norris
|
7,052,457
(2)
|
25.3
%
|
|
|
|
|
|
|
Common
Stock
|
Scot
Cohen
|
5,805,744
(3)
|
21.1
%
|
|
|
|
|
|
|
Common
Stock
|
James
A. Barnes
|
2,795,700
(4)
|
10.2
%
|
|
|
|
|
|
|
Common
Stock
|
David
Norris
|
2,058,128
(5)
|
7.5
%
|
|
|
|
|
|
|
Common
Stock
|
Thomas
P. Smith
|
-
|
*
|
|
|
|
|
|
|
Common
Stock
|
Michael
Rothans
|
55,000
(6)
|
*
|
|
|
|
|
|
|
Common
Stock
|
Michael
Parris
|
223,000
(7)
|
*
|
|
|
|
|
|
|
Common
Stock
|
Wayne
R. Walker
|
-
|
*
|
|
|
|
|
|
|
Common
Stock
|
Patrick
Kinsella
|
-
|
*
|
|
|
|
|
|
|
Common
Stock
|
Iroquois
Capital Investment Group LLC
|
2,271,592
|
8.2
%
|
|
|
205 E 42nd
Street, Floor 20
|
|
|
|
|
New
York, NY 10017
|
|
|
|
|
All
directors and executive
|
|
|
|
|
officers
as a group (9 persons)
|
17,990,029
|
63.2
%
|
* less than 1%
__________________
-17-
(1)
Except as otherwise indicated, the business address for these
beneficial owners is c/o the Company, 4620 Arville Street, Suite E,
Las Vegas, Nevada 89103.
(2)
Includes
5,718,219 shares held by Mr. Elwood Norris directly; 850,904 shares
beneficially owned by Mr. Elwood Norris through his family trust;
150,000 shares underlying stock options that may be exercised
within 60 days from April 1, 2019; and 333,334 shares underlying
warrants that may be exercised within 60 days from April 1,
2019.
(3)
Includes 5,254,906 shares held by Mr. Cohen;
400,838 shares beneficially owned by Mr. Cohen through Petro River
Oil Corp. (“
Petro River
”); and 150,000 shares underlying stock
options that may be exercised within 60 days from April 1, 2019.
Mr. Cohen is Executive Chairman of Petro River and the beneficial
owner of 11% of the issued and outstanding common stock of Petro
River. Mr. Cohen disclaims beneficial ownership of the shares owned
by Petro River.
(4)
Includes
2,286,741 shares beneficially owned by Mr. Barnes through a family
trust; 358,959 shares beneficially owned by Mr. Barnes through
Sunrise Capital, Inc.; and 150,000 shares underlying stock options
that may be exercised within 60 days from April 1, 2019. Mr. Barnes
is the President of Sunrise Capital, Inc.
(5)
Consists
of shares beneficially owned by Mr. Norris through a family trust
and 250,000 shares underlying stock options that may be exercised
within 60 days from April 1, 2019.
(6)
Consists
of 55,000 shares underlying stock options that may be exercised
within 60 days from April 1, 2019.
(7)
Consists
of shares held by Mr. Parris and 25,000 shares underlying stock
options that may be exercised within 60 days from April 1,
2019.
(8)
Based on information provided by the stockholder
in a Schedule 13G/A filed with the SEC on February 14, 2019
beneficial ownership consists of 1,183,501 shares and 50,000 shares
underlying warrants that may be exercised held by Iroquois Capital
Investment Group LLC (“
ICIG
”), and 704,757 shares and 333,334 shares
underlying warrants held by Iroquois Master Fund Ltd.
(“
IMF
”). Iroquois Capital Management L.L.C.
(“
Iroquois
Capital
”) is the
investment manager of Iroquois Master Fund, Ltd.
(“
IMF
”). Consequently, Iroquois Capital has
voting control and investment discretion over securities held by
IMF. As President of Iroquois Capital, Mr. Richard Abbe makes
voting and investment decisions on behalf of Iroquois Capital in
its capacity as investment manager to IMF. Mr. Abbe shares
authority and responsibility for the investments made on behalf of
IMF with Ms. Kimberly Page, each of whom is a director of IMF. As a
result of the foregoing, Mr. Abbe and Mrs. Page may be deemed to
have beneficial ownership (as determined under Section 13(d) of the
Securities Exchange Act of 1934, as amended) of the securities held
by IMF. As President of Iroquois Capital, Mr. Abbe makes voting and
investment decisions on behalf of ICIG. As a result of the
foregoing, Mr. Abbe may be deemed to have beneficial ownership (as
determined under Section 13(d) of the Exchange Act) of the
securities held by ICIG.
Certain Relationships and Related Transactions
The
Company is obligated to pay royalties and pay development and
patent costs pursuant to an exclusive Amended and Restated
Intellectual Property License Agreement dated as of September 30,
2016 with Syzygy, a company owned and controlled by
stockholders/officers Mr. Elwood Norris and Mr. James Barnes. The
agreement provides for royalty payments of 4% of revenue from
products employing the licensed ensnarement device technology up to
an aggregate of $1,000,000 in royalties or until September 30,
2026, whichever occurs earlier. During the year ended December 31,
2018 the Company accrued royalties payable to Syzygy of
$871.
Commencing
in October 2017, the Company began reimbursing Mr. Elwood Norris,
an officer and stockholder of the Company, $1,500 per month on a
month to month basis for laboratory facility costs, for an
aggregate of $4,500 during the year ended December 31, 2017 and an
aggregate of $18,000 during the year ended December 31,
2018.
Mr.
Norris, through a Family Trust, purchased 333,334 units of Company
securities in the October 2018 private placement for an aggregate
of $1.0 million.
For
a director to be considered “independent,” the Board
must affirmatively determine that the director has no material
relationship with the Company (directly or as a partner,
stockholder or officer of an organization that has a relationship
with the Company). In each case, the Board considers all relevant
facts and circumstances. Our Board has affirmatively determined
that Messrs. Parris, Walker and Kinsella are independent
directors.
-18-
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports,
proxy statements and other information with the SEC. The periodic
reports and other information we have filed with the SEC, may be
inspected and copied at the SEC’s Public Reference Room at
100 F Street, N.E., Washington DC 20549. You may obtain information
as to the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330. The SEC also maintains a Web site that contains
reports, proxy statements and other information about issuers, like
the Company, who file electronically with the SEC. The address of
that site is www.sec.gov. Copies of these documents may also be
obtained by writing our secretary at the address specified
above.
STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING OF
STOCKHOLDERS
Pursuant
to Rule 14a-8 under the Exchange Act, stockholder proposals to be
included in our next proxy statement must be received by us at our
principal executive offices no later than 90 days nor more than 120
days prior to the first anniversary of the preceding year’s
annual meeting. A stockholder proposal not included in the
Company’s proxy statement for the 2020 Annual Meeting of
Stockholders will be ineligible for presentation at the meeting
unless the stockholder gives timely notice of the proposal in
writing to the Secretary of the Company at the principal executive
offices of the Company. To be timely, the Company must have
received the stockholder’s notice not less than 90 days nor
more than 120 days in advance of the date the proxy statement was
released to stockholders in connection with the previous
year’s annual meeting of stockholders. However, if the date
of the 2020 Annual Meeting of Stockholders is changed by more than
30 days from the date of this year’s Annual Meeting, the
Company must receive the stockholder’s notice no later than
the close of business on (i) the 90th day prior to such annual
meeting and (ii) the seventh day following the day on which
public announcement of the date of such meeting is first
made.
We
reserve the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not
comply with these and all other applicable
requirements.
HOUSEHOLDING OF PROXY MATERIALS
The SEC
has adopted rules that permit companies and intermediaries (e.g.,
brokers) to satisfy the delivery requirements for proxy statements
and annual reports with respect to two or more stockholders sharing
the same address by delivering a single proxy statement and annual
report addressed to those stockholders. This process, which is
commonly referred to as “householding,” potentially
means extra convenience for stockholders and cost savings for
companies.
A
number of brokers with account holders who are stockholders of the
Company will be “householding” the Company’s
proxy materials. A single set of the Company’s proxy
materials will be delivered to multiple stockholders sharing an
address unless contrary instructions have been received from the
affected stockholders. Once you have received notice from your
broker that they will be “householding” communications
to your address, “householding” will continue until you
are notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in
“householding” and would prefer to receive a separate
set of the Company’s proxy materials, please notify your
broker or direct a written request to the Company at 4620 Arville
Street, Suite E., Las Vegas, Nevada 89103, or contact us at (800)
583-2652. The Company undertakes to deliver promptly, upon any such
oral or written request, a separate copy of its proxy materials to
a stockholder at a shared address to which a single copy of these
documents was delivered. Stockholders who currently receive
multiple copies of the Company’s proxy materials at their
address and would like to request “householding” of
their communications should contact their broker, bank or other
nominee, or contact the Company at the above address or phone
number.
OTHER MATTERS
At the
date of this Proxy Statement, the Company knows of no other
matters, other than those described above, that will be presented
for consideration at the Annual Meeting. If any other business
should come before the Annual Meeting, it is intended that the
proxy holders will vote all proxies using their best judgment in
the interest of the Company and the stockholders.
The Notice, which we intend to mail to stockholders on or about
April 8, 2019, will contain instructions on how to access the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2018. The Annual Report, which includes audited
financial statements, does not form any part of the material for
the solicitation of proxies.
The
Board invites you to attend the Annual Meeting in person. Whether
or not you expect to attend the Annual Meeting in person, please
submit your vote by Internet, telephone or e-mail as promptly as
possible
so that your
shares will be represented at the Annual Meeting.
REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON, PLEASE READ THE ACCOMPANYING PROXY STATEMENT AND THEN
VOTE BY INTERNET, TELEPHONE OR E-MAIL AS PROMPTLY AS
POSSIBLE. VOTING PROMPTLY WILL SAVE US ADDITIONAL
EXPENSE IN SOLICITING PROXIES AND WILL ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE ANNUAL MEETING.
By
order of the Board of Directors,
/s/ Scot Cohen
Scot
Cohen
Executive Chairman of the Board
-19-
WRAP TECHNOLOGIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WRAP TECHNOLOGIES, INC.
FOR THE 2019 ANNUAL MEETING OF STOCKHOLDERS
The
undersigned revokes all previous proxies and constitutes and
appoints David Norris and James Barnes and each of them, his or her
true and lawful agent and proxy with full power of substitution in
each, to represent and to vote on behalf of the undersigned all of
the shares of Wrap Technologies, Inc. (the “
Company
”) which the undersigned
is entitled to vote at the Company’s 2019 Annual Meeting of
Stockholders (the “
Annual
Meeting
”), to be held at the 7
th
Floor Meeting Room
in the One America Plaza building, located at 600 West Broadway,
San Diego, CA 92101 on May 23, 2019 at 10:30 a.m., PT, and at
any adjournment(s) or postponement(s) thereof, upon the following
Proposals, each of which are more fully described in the Notice of
Annual Meeting of Stockholders and Proxy Statement for the Annual
Meeting (receipt of which is hereby acknowledged).
This proxy when properly executed will be
voted in the manner directed herein by the undersigned stockholder.
If no direction is made, this proxy will be voted
FOR
each nominee identified in
Proposal No. 1 and
FOR
Proposal No. 2 and Proposal
No. 3, each of which have been proposed by our Board, and in the
discretion of the proxy holder upon other matters as may properly
come before the Annual Meeting.
(continued and to be signed on reverse side)
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1.
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ELECTION
OF DIRECTORS
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Nominees
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FOR
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WITHHELD
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01
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Scot
Cohen
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02
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David
Norris
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03
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Michael
Parris
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04
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Patrick
Kinsella
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05
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Wayne
R. Walker
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2.
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APPROVAL
OF AN AMENDMENT TO THE COMPANY’S 2017 EQUITY COMPENSATION
PLAN TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR POTENTIAL
ISSUANCE THEREUNDER FROM 2.0 MILLION TO 4.1 MILLION SHARES, AND
RATIFICATION OF ALL ISSUANCES MADE THEREUNDER TO DATE.
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FOR
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AGAINST
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ABSTAIN
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3.
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RATIFYING THE APPOINTMENT OF
ROSENBERG RICH BAKER BERMAN, P.A. AS WRAP TECHNOLOGIES,
INC.’S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2019.
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F
OR
☐
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AGAINST
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ABSTAIN
☐
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IN HIS
OR HER DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING.
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☐
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I
WILL ATTEND THE ANNUAL MEETING.
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PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.
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Signature
of Stockholder _______________________ Signature of Stockholder
_________________________
(IF
HELD
JOINTLY)
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Dated:
________________________________,
2019
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Note: This proxy
must be signed exactly as the name appears hereon. When shares are
held by joint tenants, both should sign. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If the signer is a partnership,
please sign in partnership name by authorized person.
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