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SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2026
SUBSEQUENT EVENTS [Abstract]  
SUBSEQUENT EVENTS

17. SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through August 11, 2026, the date on which this Quarterly Report on Form 10-Q was filed with the Securities and Exchange Commission. Other than as described below, the Company determined there are no subsequent events requiring disclosure in accordance with ASC 855.

 

In July 2026, the Company made a strategic investment in Frenel, an advanced-sensing company. Pursuant to the agreement, the Company purchased in a private placement 74,918 Series A Preferred Shares of Frenel at a purchase price of $26.6959 per share, for an aggregate purchase price of $2,000, of which $300 had been paid previously under an advance investment and interim limited license agreement in March 2026. The Series A Preferred Shares are convertible into ordinary shares of Frenel at the holder's option. Under the purchase agreement, the Company has the right, but not the obligation, to invest up to an additional $2,500 in Series A-2 Preferred Shares of Frenel at any time within 24 months following the initial closing, based on a pre-money valuation of $18,500 on a fully diluted basis. The Company is evaluating the appropriate accounting for its investment in Frenel, which represents an equity interest in a privately held company, and expects to complete that assessment during the third quarter of 2026.

 

Additionally, the Company and Frenel entered into an exclusive distribution and license agreement under which Frenel granted the Company an exclusive license to market, sell, distribute, and integrate Frenel's proprietary polarimetric thermal imaging software within the United States, and to NATO agencies and member-state customers through U.S. Department of Defense Foreign Military Financing and Foreign Military Sales channels. The license is exclusive for an initial period of four years, subject to the Company's satisfaction of specified minimum annual commitment milestones, and converts to a non-exclusive license if those milestones are not met following applicable cure periods. The Company has agreed to pay Frenel a base price for products supplied plus a revenue share of 10% of net funds invoiced to end customers. The Company intends to use the licensed technology as part of the detection layer of its WrapShield platform. The arrangement is in an early stage, and the timing and amount of any resulting revenue are uncertain.

 

In July 2026, ATF Ruling 2026-2 became effective, classifying the BolaWrap 150 as an instrument of restraint and determining that it is not a "firearm" under the Gun Control Act or an "any other weapon" under the National Firearms Act. The ruling supersedes prior ATF classifications of the BolaWrap 150 and addresses that product only. The ruling did not affect the Company's financial position or results of operations for the periods presented.