WRAP TECHNOLOGIES, INC. 8-K

What Happened
Wrap Technologies, Inc. (WRAP) announced on July 7–8, 2026 that it completed a private placement investing $2,000,000 to acquire 74,918 Series A preferred shares of Frenel Imaging Ltd. (Frenel). The securities purchase agreement gives Wrap an irrevocable right (but not obligation) to participate in up to $2.5 million of additional closings within 24 months. Concurrently, Wrap entered into an Amended and Restated Investors’ Rights Agreement (registration and information rights) and an exclusive distribution license granting Wrap the right to market, sell and distribute Frenel’s polarimetric thermal imaging software in the United States (and to certain NATO/customer channels) under a four‑year exclusivity subject to performance milestones. The company issued a press release about the license on July 7, 2026.

Key Details

• Investment: $2,000,000 purchase of 74,918 Series A preferred shares at $26.6959 per share; $300,000 was previously paid under a March 6, 2026 advance agreement. Closing occurred July 8, 2026.
• Optional follow-on: Investors may collectively invest up to an additional $2,500,000 in A‑2 preferred shares within 24 months; A‑2 pricing based on a $18.5M pre‑money fully diluted valuation at deferred closing.
• Preferred share terms: Convertible into ordinary shares at $26.6959 per share; vote and dividend rights on an as‑converted basis; liquidation preference equal to the greater of $26.6959 per share (plus declared unpaid dividends) or the pro rata conversion amount; automatic conversion upon an IPO.
• License highlights: Exclusive U.S. distribution license for four years (subject to meeting milestones). Milestones include establishing a U.S. value chain and marketing activity by 12 months, signing at least one customer agreement by 24 months, and generating cumulative net revenue to Frenel in excess of $3,000,000 by 36 months. Revenue/compensation mechanics include a 10% “revenue share” component and payments due within 30 days of Wrap’s customer receipts. Key‑person involvement required: CEO Scot Cohen and President Jared Novick must remain materially and actively involved.

Why It Matters
This filing shows Wrap is expanding its product portfolio and supplier relationships by taking an equity stake in Frenel and securing exclusive U.S. rights to Frenel’s polarimetric thermal imaging software. The deal combines an ownership position (with registration/information rights) and a commercial distribution arrangement that could add product offerings and revenue opportunities for Wrap if the milestones are met. However, exclusivity is conditional on specific performance targets and key‑person involvement; failure to meet milestones can convert exclusivity to non‑exclusive status. Investors should note the follow‑on investment option (up to $2.5M collective) and the preferred‑share conversion and liquidation terms that would matter in a future sale or IPO.