SCHEDULE: Insider Scot Cohen Boosts Wrap Technologies Stake to 27.3%

Scot Cohen and affiliated entities have significantly increased their beneficial ownership in Wrap Technologies, Inc. to 27.3% through various equity transactions.

Summary

• Scot Cohen, through personal holdings and affiliated entities (V4 Global LLC, Scot Cohen Roth IRA), beneficially owns 17,835,611 shares of Wrap Technologies, Inc. Common Stock, representing 27.3% of the outstanding class.
• This ownership includes 2,256,238 shares from vested stock options, 1,448,720 shares from restricted stock units (RSUs), 2,068,966 shares convertible from Series A Preferred Stock, 666,667 shares convertible from Series B Preferred Stock, 4,310,632 shares underlying warrants, and 7,084,388 directly held Common Stock.
• Between May 2, 2025, and March 4, 2026, Scot Cohen and V4 Global received 15,477 and 161,527 shares of Common Stock, respectively, as dividends on Series A Convertible Preferred Stock.
• Warrants to purchase a total of 4,310,632 shares of Common Stock were assigned to the Scot Cohen Roth IRA from V4 Global and Scot Cohen on January 28, 2023, and February 4, 2026.
• On February 1, 2026, Scot Cohen was granted stock options to purchase 2,000,000 shares of Common Stock, with 25% vesting immediately and the remainder vesting annually, subject to employment and market capitalization milestones.
• V4 Global acquired 1,000 shares of Series B Convertible Preferred Stock (convertible into 666,667 Common Shares) and warrants for 666,666 Common Shares on August 18, 2025, via a Securities Purchase Agreement.
• V4 Global also acquired 475,000 shares of Common Stock and warrants for 475,000 Common Shares on February 2, 2026, through another Securities Purchase Agreement.
• Registration rights agreements were executed for both the August 2025 and February 2026 transactions, obligating the Issuer to file registration statements for the resale of these shares.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive due to increased insider ownership, which signals confidence, but tempered by the potential for future dilution and market overhang from registered shares.

Positives

• Increased beneficial ownership by a key insider (Scot Cohen) and affiliated entities, potentially signaling confidence in the company's future.
• Grant of 2,000,000 stock options to Scot Cohen, with vesting tied to market capitalization milestones, aligns his incentives with shareholder value creation.

Negatives

• The issuance of new shares and warrants through preferred stock conversions and private placements could lead to dilution for existing common stockholders.
• Registration rights agreements indicate a potential for future sales of a significant number of shares (over 2.5 million shares from the August 2025 and February 2026 agreements alone, plus other convertible securities and warrants), which could create downward pressure on the stock price when registered shares become freely tradable.

Risks

• Potential dilution of existing common stockholders due to the conversion of Series A and Series B Preferred Stock, exercise of warrants, and vesting of stock options.
• Future market overhang from the registration of a substantial number of shares for resale, which could impact the stock price.
• The vesting of Scot Cohen's stock options is contingent on continued employment/services and achievement of market capitalization milestones, introducing performance-related risk.

Future Outlook

The Issuer has committed to filing registration statements with the SEC for the resale of shares acquired by V4 Global through the August 2025 and February 2026 Securities Purchase Agreements. These registration statements are expected to be filed within 60 days and declared effective within 90 to 120 days of the respective agreement dates, potentially allowing for future liquidity events for these shares. Scot Cohen's stock options have future vesting dates tied to annual anniversaries and market capitalization milestones.

Industry Context

StockSavvy.ai notes that significant insider ownership, particularly by a substantial shareholder like Scot Cohen, can often be interpreted by the market as a sign of strong conviction in the company's long-term prospects. However, the concurrent registration rights agreements for newly issued shares and warrants suggest a potential for future share sales, which could be a common strategy for investors to realize gains or manage their portfolio, but also introduces potential supply to the market.

Comparison to Industry Standards

• StockSavvy.ai observes that a 27.3% beneficial ownership stake by a single individual and their affiliated entities is a substantial concentration, often seen in smaller-cap companies or those undergoing significant strategic shifts.
• While not directly comparable to industry-specific performance benchmarks, this level of insider control is higher than the average for many publicly traded companies, where institutional ownership is typically more dispersed.
• The structure of equity grants, including stock options with market capitalization milestones, aligns with common practices for incentivizing key personnel in growth-oriented companies, similar to those seen in early-stage tech or specialized manufacturing firms.

Related Party Transactions

• Scot Cohen, the Reporting Person, is involved in transactions with Wrap Technologies, Inc. through entities he controls or is affiliated with, including V4 Global LLC and Scot Cohen Roth IRA.
• V4 Global LLC, controlled by Scot Cohen, acquired Series B Preferred Stock, Common Stock, and warrants from the Issuer via Securities Purchase Agreements.
• Warrants were assigned from V4 Global LLC and Scot Cohen to the Scot Cohen Roth IRA.
• Scot Cohen received stock options from the Issuer.

Stakeholder Impact

• Shareholders: Potential for dilution from the conversion of preferred stock, exercise of warrants, and vesting of stock options. Increased insider ownership could be seen as a positive signal of confidence. Future registration of shares could create market overhang.
• Employees: Scot Cohen's stock option vesting is tied to his continued employment/services, aligning his long-term interest with the company.

Next Steps

• The Issuer is obligated to prepare and file registration statements with the SEC for the resale of shares acquired by V4 Global from the August 2025 and February 2026 Securities Purchase Agreements.
• The Issuer must use best efforts to have these registration statements declared effective within 90 to 120 days of the respective agreement dates.
• Future vesting of Scot Cohen's stock options will occur annually, subject to continued employment/services and achievement of market capitalization milestones.

Key Dates

Recommendation

The significant increase in insider ownership by Scot Cohen and affiliated entities, reaching 27.3%, signals strong confidence in Wrap Technologies' future. This is generally a positive indicator for investors. However, the concurrent issuance of new shares, preferred stock, and warrants through private placements, coupled with registration rights agreements, introduces a substantial potential for future dilution and market overhang. While insider conviction is high, the prospect of a large volume of shares becoming freely tradable could exert downward pressure on the stock price. Therefore, a "hold" recommendation is appropriate, advising investors to monitor the timing and impact of these potential share sales against the backdrop of the company's operational performance and strategic execution.

Keywords

Wrap Technologies, Scot Cohen, Schedule 13D, Beneficial Ownership, Insider Ownership, Stock Options, Warrants, Preferred Stock, Equity Compensation, Registration Rights, V4 Global, Dilution