NEW YORK, Nov. 19, 2020 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who acquired Wrap Technologies, Inc. (“Wrap” or the “Company”) (NASDAQ: WRTC) securities during the period from April 29, 2020 through September 23, 2020, inclusive (the “Class Period”). Investors have until November 23, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
In December 2019, the Company announced that the Los Angeles Police Department (“LAPD”) would train its officers on the BolaWrap and deploy 200 devices in the field for a 90-day pilot program beginning in January 2020.
On July 22, 2020, White Diamond Research published a report alleging that the BolaWrap had limited use in the field and therefore Wrap has a very small total addressable market. The report also alleged that it was likely Wrap did not secure a contract with the LAPD. On this news, the Company’s share price fell $0.55, or 4.6%, to close at $11.34 per share on July 22, 2020, on unusually heavy trading volume.
On August 25, 2020, after the market closed, an article by Los Angeles Times reported that “[s]ince the initial 180-day pilot began in February, LAPD officers have used the BolaWrap a total of nine times[, and it] was deemed ‘effective’ in six instances.” As a result, the LAPD sought a 180-day extension to continue evaluating the device. On this news, the Company’s share price fell $0.50, or 5.7%, to close at $8.27 per share on August 27, 2020, on unusually heavy trading volume.
On September 23, 2020, White Diamond Research published a second report, alleging that, despite previously touting the LAPD pilot program, Wrap failed to disclose the key findings from the initial 180-day testing period because it was “bad news.” The report described the nine incidents in which the BolaWrap had been used, thereby highlighting its limited utility. On this news, the Company’s share price fell $2.07, or 25%, close at $6.07 per share on September 23, 2020, thereby damaging investors.
The Complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that there were limited instances in which Wrap’s BolaWrap could potentially be used because it requires a minimum of 10 feet between the officer and the suspect; (2) that, as a result, the BolaWrap was reasonably unlikely to be effective in most situations; (3) that the LAPD sought extensions of the pilot program because they needed a larger sample size to assess the effectiveness of the BolaWrap; (4) that the LAPD had not found the BolaWrap to be useful or effective during its pilot program; (5) that, as a result, Wrap had not received positive feedback from the LAPD about the BolaWrap and therefore it was unlikely that the Company would secure a sizeable contract with the LAPD; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you acquired Wrap securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney at 212-371-6600, by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, and whistleblower litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney’s website: www.kmllp.com.
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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq., (212) 371-6600
investigations@kmllp.com
www.kmllp.com