LEGAL PROCEEDINGS
−Removed: Securities Litigation
−Removed: On November 15, 2021, the Hon.
−Removed: Gee of the United States District Court for the Central District of California (the “
−Removed: Court ”) granted the motion to dismiss filed by the Company, David Norris (“
−Removed: Norris ”), James A.
−Removed: Barnes (“
−Removed: Barnes ”), Thomas Smith (“
−Removed: Smith ”), Mike Rothans (“
−Removed: Rothans ”) and Marc Thomas (“
−Removed: Thomas ”) (collectively, “
−Removed: Defendants ”) in the action captioned 
−Removed: In re Wrap Technologies, Inc.
−Removed: Securities Exchange Act Litigation  (the “
−Removed: Securities Action ”).
−Removed:  The Court granted Defendants’
−Removed: motion on the grounds that the complaint failed to identify any statement by Defendants that was either false or made with scienter.
−Removed: Concurrently, the Court granted Plaintiff leave to file a second amended complaint on or before December 6, 2021, noting that a failure to file a second amended complaint by that date would result in dismissal of the Securities Action with prejudice. On December 20, 2021, following Plaintiff’s failure to file a second amended complaint, the Court dismissed the Securities Action with prejudice. 
Shareholder Derivative Litigation
−Removed: On November 13, 2020, Naresh Rammohan filed a shareholder derivative action in the United States District Court for the Central District of California against Smith, Barnes, Rothans, Thomas, and Norris, as well as directors Messrs.
−Removed: Scot Cohen, Patrick Kinsella, Michael Parris, and Wayne Walker, alleging unjust enrichment, breach of fiduciary duty, waste of corporate assets, and contribution claims under the Securities Exchange Act of 1934, docketed as Case No.
−Removed: 2:20-cv-10444-DMG-PVCx (the “
−Removed: Rammohan Complaint ”). The Company is named as a nominal defendant.
−Removed: On January 20, 2021, Ray Westerman filed a second derivative complaint in the same court against the same parties, alleging breach of fiduciary duty and contribution claims under the Securities Exchange Act of 1934, docketed as Case No.
−Removed: 2:21-cv-00550-DMG-PVCx (the “
−Removed: Westerman Complaint ”).
−Removed: On January 22, 2021, Jesse Lowe filed a third derivative complaint in the same court against the same parties, alleging breach of fiduciary duty and asserting various claims under the Securities Exchange Act of 1934, docketed as Case No.
−Removed: 2:21-cv-00597-DMG-PVCx (the “
−Removed: Lowe Complaint ”). 
−Removed: On January 27, 2021, Judge Gee entered an order to show cause why the derivative actions should not be consolidated and stayed pending the resolution of the Securities Action, given the “apparent substantial overlap”
−Removed: between the cases.
−Removed: On February 16, 2021, Judge Gee issued an order consolidating the derivative actions under the caption 
−Removed: In re Wrap Technologies, Inc.
−Removed: Shareholder Derivative Litigation , Case No.
−Removed: 2:20-10444-DMG-PVCx, (the “
−Removed: Derivative Action ”), and stayed the Derivative Action at least until the resolution of the Securities Action, which has been dismissed with prejudice. The Company believes that the Derivative Action is without merit and will vigorously defend against the claims raised therein.
−Removed: Other Legal Proceeding Information
+Added: On November 13, 2020, Naresh Rammohan filed a shareholder derivative action in the US District Court for the Central District of California against current and former Company officers as well as current and former Company directors alleging unjust enrichment, breach of fiduciary duty, waste of corporate assets, and contribution claims under the Securities Exchange Act of 1934, docketed as Case No.
+Added: 2:20-cv-10444-DMG-PVCx.
+Added: The derivative action was dismissed with prejudice by stipulation of the parties on May 3, 2022. 
+Added: Other Legal Information
We may become subject to other legal proceedings, as well as demands and claims that arise in the normal course of our business, including claims of alleged infringement of third-party patents and other intellectual property rights, breach of contract, employment law violations, and other matters and matters involving requests for information from us or our customers under federal or state law.
Such claims, even if not meritorious, could result in the expenditure of significant financial and management resources.
−Removed: We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
+Added: We make a provision for liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
These provisions are reviewed and adjusted to include the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events pertaining to a particular matter.
−Removed: At December 31, 2021 we had no provision for liability under existing litigation.
+Added: On December 31, 2022, we had no provision for liability under existing litigation.
An unfavorable outcome on any litigation matters could require payment of substantial damages, or, in connection with any intellectual property infringement claims, could require us to pay ongoing royalty payments or could prevent us from selling certain of our products.
−Removed: As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation matters or legal proceedings could have a material adverse effect on our business, operating results, financial condition and cash flows.
+Added: As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation matters, or legal proceedings could have a material adverse effect on our business, operating results, financial condition and cash flows. 
MINE SAFETY DISCLOSURES
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