Core Insights - Merit Medical Systems, Inc. has successfully enrolled the first patient in the WRAP North America registry, aimed at evaluating the WRAPSODY Cell-Impermeable Endoprosthesis (CIE) for patients on hemodialysis [1][5][8] Group 1: WRAP North America Registry - The WRAP North America registry is designed to enroll up to 250 patients in the US and Canada who are on hemodialysis and experience vascular access obstructions [2][4] - The registry will evaluate clinical outcomes over three years for patients treated with the WRAPSODY CIE [2][4] - The first patient was enrolled by Dr. Omar Davis at Bluff City Vascular, marking a significant milestone for the company [2][5] Group 2: WRAPSODY CIE Device - The WRAPSODY CIE aims to restore vascular access for hemodialysis patients facing obstructions, with promising results demonstrated in the previous WAVE pivotal trial [3][4] - The WAVE trial compared the WRAPSODY CIE with percutaneous transluminal angioplasty (PTA) and historical outcomes of patients treated with previous-generation covered stents [3] - The device received premarket approval from the FDA on December 19, 2024, and was approved by Health Canada on April 30, 2025 [7] Group 3: Clinical Evidence and Future Prospects - The WRAP North America registry is expected to contribute to a growing portfolio of clinical evidence supporting the WRAPSODY CIE [4] - A parallel WRAP Global registry is also being conducted to enroll up to 500 patients outside North America, with final enrollment expected by the end of 2025 [5] - The company emphasizes the importance of real-world effectiveness data to address critical questions regarding the device's broader impact in clinical practice [4][5]

Core Viewpoint - Wrap Technologies, Inc. has announced a private placement of securities, raising $4.5 million through the sale of Series B Preferred Stock and accompanying warrants, aimed at enhancing its public safety technology offerings and expanding market execution [2][3]. Financing Highlights - The company executed a securities purchase agreement for 4,500 shares of Series B Preferred Stock, convertible into 3,000,000 shares of common stock at an initial price of $1.50 per share, along with warrants to purchase an additional 3,000,000 shares [2][3]. - The total gross proceeds from this private placement amount to $4.5 million, with the closing expected around August 19, 2025, subject to customary conditions [3]. Use of Proceeds - The net proceeds from the offering will be utilized for working capital and general corporate purposes [3]. - The financing is expected to advance Wrap's Wrap-Merlin and Wrap-PANDA programs, enhancing counter-drone capabilities and supporting law enforcement growth initiatives [8]. Product and Market Strategy - Wrap's BolaWrap® 150 solution is designed for pre-escalation in law enforcement, providing a non-lethal option to manage non-compliant subjects [7][9]. - The company aims to leverage its existing technology base to build a scalable federal government business, particularly in counter-UAS demand [8]. - The financing will also support the expansion of WrapVision, a body-worn camera system, addressing cost pain points for law enforcement agencies and opening access to adjacent markets like healthcare [8][12].

Core Viewpoint - Purcell & Lefkowitz LLP is investigating Wrap Technologies, Inc. to determine if its directors breached fiduciary duties related to recent corporate actions [1]. Group 1 - The investigation is on behalf of shareholders of Wrap Technologies, Inc. [1] - Shareholders interested in their rights and options can obtain additional information through Purcell & Lefkowitz LLP [2]. - Purcell & Lefkowitz LLP specializes in representing shareholders affected by securities fraud and corporate misconduct [3].

Financial Data and Key Metrics Changes - Operating expenses were reduced by 26% from Q1 to Q2 2025, declining to $3.3 million from $4.5 million [29] - Year-to-date operating expenses are down 14% compared to the same period last year, from $9.1 million to $7.9 million [29] - Cash flow improvements were noted, with net cash used in operations declining by $2.2 million for the first six months of 2025, down to $5 million compared to $7.2 million in the same period of 2024 [29] - Cash and cash equivalents increased by 16% to $4.2 million as of June 30, 2025, up from $3.6 million at December 31, 2024 [29] - Revenue for Q2 was $1 million, with year-to-date revenue at $1.8 million [30] Business Line Data and Key Metrics Changes - BolaWrap deployments are increasing across diverse law enforcement agencies, with strong usage reported in Colorado, North Carolina, and Canada [10] - Agencies in Florida are evaluating BolaWrap as a strategic replacement for traditional electronic control devices like TASERs [10] - The crisis intervention team in a major Floridian agency reports more frequent BolaWrap use than TASERs, indicating a shift towards safer tools [11] Market Data and Key Metrics Changes - Favorable federal regulatory changes, including the Supreme Court decision in Barnes v. Felix, are driving adoption and sales of BolaWrap [15][16] - Increased inquiries and strategic discussions with customers are being observed due to heightened awareness around safer alternatives to traditional use of force tools [17] Company Strategy and Development Direction - The company has completed its restructuring efforts and is now focused on a renewed go-to-market strategy that emphasizes pre-escalation [5][40] - The introduction of new subscription models, Wrap Ready and Wrap Plus, aims to address customer concerns regarding replacement costs and enhance value propositions [31][32] - The company is expanding into adjacent markets such as healthcare, transportation, and private security, leveraging its existing technology and partnerships [26][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum building for Wrap Technologies, citing a sharp increase in purchase orders and positive customer feedback [4][40] - The company believes it is well-positioned to capitalize on the evolving regulatory landscape and increasing demand for safer policing tools [40] - Management highlighted the importance of training and partnerships in driving adoption and success in the market [25][52] Other Important Information - The company has applied for nearly $1 million in DOJ-funded grants to support pre-escalation tools and training [33] - A new counter UAS capability has been developed, targeting a growing market projected to reach $6.8 billion by 2030 [38] - The rebranding of the body-worn camera business line to WrapVision aims to address data sovereignty concerns and enhance product offerings [39] Q&A Session Summary Question: How do you plan to accelerate adoption among law enforcement agencies in the US and internationally? - Management noted that adoption is being driven by regulatory changes and direct engagement with departments, emphasizing the importance of training and connectivity with officers [42][45][50] Question: How do you plan to penetrate non-law enforcement sectors? - The company is already seeing interest from hospitals and correction facilities, with a focus on scaling operations and leveraging data to drive adoption [56][60][64] Question: Are there adjacent product lines or technology upgrades planned in the next eighteen months? - Management confirmed ongoing developments, including counter drone capabilities and enhancements to the body-worn camera line, indicating a strategic focus on expanding product offerings [67][70] Question: What is the status of the company's move to Virginia, and when do you expect production to ramp up? - The company has fully moved to Virginia and is prepared to scale production in response to increasing demand [76][78] Question: How do you see one-time sales versus subscription services as a portion of your revenues? - Management highlighted a strategic shift towards recurring subscription models, which are expected to provide more stable revenue streams compared to one-time sales [80][81]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the interim period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Wrap Technologies, Inc.'s unaudited condensed consolidated financial statements, detailing financial position, performance, and cash flows for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a detailed overview of the company's assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $4,177 | $3,610 | | Total current assets | $11,321 | $10,471 | | Total assets | $15,612 | $15,121 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $2,002 | $13,203 | | Total liabilities | $3,851 | $14,871 | | Total stockholders' equity | $11,761 | $250 | - Total stockholders' equity significantly increased from **$250 thousand** at December 31, 2024, to **$11,761 thousand** at June 30, 2025, primarily due to the reclassification of warrant liabilities to additional paid-in capital[9](index=9&type=chunk) - Total current liabilities decreased substantially from **$13,203 thousand** to **$2,002 thousand**, mainly driven by the reclassification of warrants from liabilities to equity[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines the company's revenues, expenses, and net loss over specific interim periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $1,012 | $1,573 | $1,778 | $3,049 | | Gross profit | $487 | $984 | $1,083 | $1,820 | | Loss from operations | $(2,856) | $(3,170) | $(6,777) | $(7,309) | | Net loss | $(3,727) | $(385) | $(3,618) | $(268) | | Net loss attributable to common stockholders | $(3,891) | $(896) | $(3,946) | $(968) | | Net loss per basic and diluted common share | $(0.07) | $(0.02) | $(0.07) | $(0.02) | - Total revenues decreased by **36%** for the three months ended June 30, 2025, and by **42%** for the six months ended June 30, 2025, compared to the same periods in 2024[11](index=11&type=chunk) - Net loss significantly increased for both the three-month and six-month periods ended June 30, 2025, primarily due to a negative change in the fair value of warrant liabilities in 2025 compared to a positive change in 2024[11](index=11&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, including net loss, share-based compensation, and warrant reclassification Changes in Stockholders' Equity (in thousands) | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------ | :------------------------------- | :----------------------------- | | Balance at beginning of period | $2,567 | $250 | | Share-based compensation expense | $770 | $2,435 | | Reclassification of warrant liability | $12,151 | $12,151 | | Net loss for the period | $(3,727) | $(3,618) | | Balance at end of period | $11,761 | $11,761 | - A significant reclassification of warrant liability to additional paid-in capital of **$12,151 thousand** occurred in the six months ended June 30, 2025, contributing to the increase in total stockholders' equity[14](index=14&type=chunk) - Share-based compensation expense for the six months ended June 30, 2025, was **$2,435 thousand**, a substantial increase from the prior year[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities over specific interim periods Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(5,009) | $(7,249) | | Net cash (used in) provided by investing activities | $(153) | $4,890 | | Net cash provided by financing activities | $5,729 | $468 | | Net increase (decrease) in cash and cash equivalents | $567 | $(1,891) | | Cash and cash equivalents, end of period | $4,177 | $2,064 | - Net cash used in operating activities improved by **$2,240 thousand**, from **$(7,249) thousand** in 2024 to **$(5,009) thousand** in 2025, primarily due to cost containment efforts[18](index=18&type=chunk)[125](index=125&type=chunk) - Net cash provided by financing activities significantly increased to **$5,729 thousand** in 2025, driven by proceeds from a private placement, compared to **$468 thousand** in 2024[18](index=18&type=chunk)[195](index=195&type=chunk) [Notes to Condensed Consolidated Interim Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides additional details and explanations for the figures presented in the condensed consolidated interim financial statements [1. Organization, Summary of Significant Accounting Policies and Recent Developments](index=9&type=section&id=1.%20Organization,%20Summary%20of%20Significant%20Accounting%20Policies%20and%20Recent%20Developments) This note describes the company's business, its key accounting policies, and recent significant events impacting its financial reporting - Wrap Technologies, Inc. develops and supplies public safety products and training services, with its primary product being the BolaWrap® remote restraint device, and also offers Wrap Reality VR training and Intrensic Body Worn Camera/Digital Evidence Management solutions[20](index=20&type=chunk)[23](index=23&type=chunk) - The company operates as a single segment, with its Executive Chairman and CEO, Scot Cohen, serving as the chief operating decision maker[24](index=24&type=chunk) - Warrants were reclassified from liability-classified to equity-classified instruments on June 30, 2025, following amendments to the Series A and 2025 Warrants, impacting the balance sheet and statement of operations[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [2. Revenue and Product Costs](index=13&type=section&id=2.%20Revenue%20and%20Product%20Costs) This note details the company's revenue recognition policies and the components of its contract liabilities - Revenue is recognized when control of goods or services is transferred to customers, encompassing product sales, technology-enabled services, and managed services[34](index=34&type=chunk)[35](index=35&type=chunk)[42](index=42&type=chunk) Contract Liabilities Activity (in thousands) | Metric | Customer Deposits | Deferred Revenue | | :------------------ | :---------------- | :--------------- | | Balance at Jan 1, 2025 | $27 | $505 | | Additions, net | $- | $205 | | Transfer to revenue | $- | $(385) | | Balance at June 30, 2025 | $27 | $325 | | Current portion | $27 | $302 | | Long-term portion | $- | $23 | - As of June 30, 2025, deferred revenue of **$325 thousand** primarily consisted of Technology Enabled Services[45](index=45&type=chunk) [3. Financial Instruments](index=13&type=section&id=3.%20Financial%20Instruments) This note provides information on the company's financial instruments, including money market funds and warrant liabilities Money Market Funds (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :------------------ | | Market Value | $3,134 | $2,945 | - Warrant liabilities, previously measured at fair value on a recurring basis (Level 3), were reclassified to equity on June 30, 2025, following amendments to the Series A and 2025 Warrants[50](index=50&type=chunk)[31](index=31&type=chunk) Warrant Liabilities Fair Value Changes (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :------------------ | | Fair value at beginning of period | $(10,131) | $(19,703) | | Warrants issued with Private Placement | $(5,186) | $- | | Change in fair value of warrant liabilities | $3,158 | $9,572 | | Reclassification of warrant liabilities to equity | $12,159 | $- | | Fair value as of period end | $- | $(10,131) | [4. Inventories](index=15&type=section&id=4.%20Inventories) This note details the composition of the company's inventories and changes in the reserve for obsolescence Inventories, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :------------------ | | Finished goods | $4,337 | $4,387 | | Raw materials | $2,234 | $2,263 | | Reserve for Obsolescence | $(667) | $(480) | | Inventories - net | $5,904 | $6,170 | - Inventory reserve expense increased significantly to **$187 thousand** for the six months ended June 30, 2025, compared to **$12 thousand** for the same period in 2024[53](index=53&type=chunk) [5. Property and Equipment, Net](index=15&type=section&id=5.%20Property%20and%20Equipment,%20Net) This note provides a breakdown of the company's property and equipment, net of accumulated depreciation Property and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Total gross property and equipment | $1,359 | $1,351 | | Accumulated depreciation | $(1,272) | $(1,205) | | Property and equipment, net | $87 | $146 | - Depreciation expense decreased to **$67 thousand** for the six months ended June 30, 2025, from **$230 thousand** for the same period in 2024[55](index=55&type=chunk) [6. Intangible Assets](index=17&type=section&id=6.%20Intangible%20Assets) This note presents the company's intangible assets, including amortizable and indefinite-life assets, and their associated amortization Intangible Assets, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Total amortizable assets | $3,334 | $3,189 | | Accumulated amortization | $(1,493) | $(1,256) | | Total amortizable, net | $1,841 | $1,933 | | Indefinite life assets | $421 | $421 | | Total intangible assets, net | $2,262 | $2,354 | - Amortization expense increased to **$238 thousand** for the six months ended June 30, 2025, compared to **$220 thousand** for the same period in 2024[56](index=56&type=chunk) Future Amortization Expense (in thousands) | Year | Amount | | :--------- | :----- | | 2025 (6 months) | $234 | | 2026 | $368 | | 2027 | $226 | | 2028 | $217 | | 2029 | $176 | | Thereafter | $620 | | Total | $1,841 | [7. Accounts Payable and Accrued Liabilities](index=17&type=section&id=7.%20Accounts%20Payable%20and%20Accrued%20Liabilities) This note details the components of the company's accrued liabilities and product warranty costs Accrued Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------------ | | Patent and legal costs | $60 | $60 | | Accrued compensation | $213 | $121 | | Warranty costs | $75 | $83 | | Royalty | $81 | $81 | | Contract settlement | $- | $300 | | Accrued purchases | $24 | $584 | | Accrued lease payable | $166 | $- | | Taxes and other | $253 | $174 | | Total | $872 | $1,403 | - Accrued liabilities decreased from **$1,403 thousand** at December 31, 2024, to **$872 thousand** at June 30, 2025, primarily due to the settlement of contract liabilities and a reduction in accrued purchases[58](index=58&type=chunk) Product Warranty Costs (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Balance, beginning of period | $83 | $72 | | Warranty settlements | $(10) | $(34) | | Warranty provision | $2 | $17 | | Balance, end of period | $75 | $55 | [8. Warrants](index=18&type=section&id=8.%20Warrants) This note explains the reclassification and terms of the company's Series A and PIPE Warrants - On June 30, 2025, the Series A Warrants and PIPE Warrants were amended, leading to their reclassification from liability-classified to equity-classified instruments under ASC 815-40-35-10[31](index=31&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - The Series A Warrants, issued in July 2023, allow for the acquisition of up to **6,896,553 shares** of Common Stock at an exercise price of **$1.45 per share**, with an amended term of six and a half years[59](index=59&type=chunk)[60](index=60&type=chunk)[62](index=62&type=chunk) - PIPE Warrants, issued in February 2025 as part of a private placement, allow for the purchase of up to **3,216,666 shares** of Common Stock at an exercise price of **$1.80 per share**, with an amended term of five and a half years[61](index=61&type=chunk)[63](index=63&type=chunk) [9. Leases](index=18&type=section&id=9.%20Leases) This note outlines the company's operating lease obligations and future minimum lease payments Operating Lease Obligations (in thousands) | Category | Amount | | :-------------------------- | :----- | | Operating lease liability - short term | $218 | | Operating lease liability - long term | $1,826 | | Total Operating Lease Liability | $2,044 | Future Minimum Lease Payments (in thousands) | Year | Amount | | :-------------------------- | :----- | | 2025 (6 months) | $258 | | 2026 | $507 | | 2027 | $522 | | 2028 | $538 | | 2029 | $554 | | Thereafter | $717 | | Total future minimum lease payments | $3,096 | | Less imputed interest | $(1,052) | | Total | $2,044 | - The weighted average remaining lease term is **5.73 years**, and the weighted average discount rate is **15.00%**[68](index=68&type=chunk) [10. Stockholders' Equity](index=20&type=section&id=10.%20Stockholders'%20Equity) This note details the company's authorized capital, preferred stock terms, and dividend payments - The Company's authorized capital includes **150,000,000 shares** of Common Stock and **5,000,000 shares** of Preferred Stock, with **10,000** designated as Series A Convertible Preferred Stock[72](index=72&type=chunk) - Series A Preferred Stock holders are entitled to **8% per annum dividends**, compounded monthly, payable in cash or common stock, with a **20% rate** upon a Triggering Event[74](index=74&type=chunk)[79](index=79&type=chunk) - For the six months ended June 30, 2025, the Company authorized, declared, and paid **$328 thousand** in dividends in the form of Common Stock[80](index=80&type=chunk) [11. Share-Based Compensation](index=21&type=section&id=11.%20Share-Based%20Compensation) This note provides information on the company's stock option activity and share-based compensation expense Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Options on Common Shares | Weighted Average Exercise Price | | :-------------------------- | :----------------------- | :------------------------------ | | Outstanding January 1, 2025 | 3,944,284 | $2.12 | | Granted | 3,453,927 | $1.88 | | Forfeited, cancelled, expired | (536,500) | $2.86 | | Outstanding June 30, 2025 | 6,861,711 | $1.94 | | Exercisable June 30, 2025 | 1,419,164 | $2.58 | Share-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Selling, general and administrative | $755 | $208 | $2,358 | $856 | | Research and development | $15 | $34 | $77 | $62 | | Total share-based expense | $770 | $242 | $2,435 | $918 | - Total estimated compensation cost for stock options and RSUs not yet vested was **$5,591 thousand** and **$1,368 thousand**, respectively, as of June 30, 2025[90](index=90&type=chunk) [12. Defined Contribution Plan](index=23&type=section&id=12.%20Defined%20Contribution%20Plan) This note reports the company's contributions to its 401(k) defined contribution plan - The Company contributed **$23 thousand** to its 401(k) defined contribution plan for the six months ended June 30, 2025, compared to **$0** for the same period in 2024[91](index=91&type=chunk) [13. Commitments and Contingencies](index=24&type=section&id=13.%20Commitments%20and%20Contingencies) This note details the company's future commitments for component deliveries, lease agreements, and potential litigation - As of June 30, 2025, the Company was committed for approximately **$508 thousand** for future component deliveries[92](index=92&type=chunk) - The Company entered into a five-year facility lease agreement for a new production facility in Norton, Virginia, commencing October 1, 2025, with total cash payments of **$600 thousand**[96](index=96&type=chunk) - The Company is subject to litigation and other claims in the ordinary course of business but had no provision for liability under existing litigation as of June 30, 2025[95](index=95&type=chunk) [14. Related Party Transactions](index=24&type=section&id=14.%20Related%20Party%20Transactions) This note discloses transactions between the company and its related parties, including participation in offerings and dividend payments - Scot Cohen, CEO, and V4 Global LLC (controlled by Mr. Cohen) participated in the Series A Offering, acquiring **3,000 shares** of Series A Preferred Stock and Series A Warrants for **$3,000 thousand**[97](index=97&type=chunk) - Related parties, including entities controlled by the CEO, President, and a Board member, participated in the February 2025 private placement, acquiring Common Stock and PIPE Warrants for aggregate gross proceeds of **$2,565 thousand**[98](index=98&type=chunk) - Mr. Cohen earned **$60 thousand** in dividends on his Series A Preferred Stock for the six months ended June 30, 2025[97](index=97&type=chunk) [15. Major Customers and Related Information](index=25&type=section&id=15.%20Major%20Customers%20and%20Related%20Information) This note identifies major customers contributing significantly to the company's revenue and accounts receivable, and provides revenue by geographic region - For the three months ended June 30, 2025, three customers accounted for approximately **32%**, **23%**, and **10%** of total revenue, respectively[99](index=99&type=chunk) - At June 30, 2025, accounts receivable from four customers accounted for **15%**, **13%**, **11%**, and **10%** of net accounts receivable, respectively[101](index=101&type=chunk) Revenue by Geographic Region (in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $846 | $1,536 | $1,592 | $2,999 | | Europe, Middle East and Africa | $166 | $37 | $186 | $43 | | Asia Pacific | $- | $- | $- | $7 | | Total revenues | $1,012 | $1,573 | $1,778 | $3,049 | [16. W1 Acquisition](index=25&type=section&id=16.%20W1%20Acquisition) This note describes the acquisition of W1 Global, LLC, and the related accounting treatment - On February 18, 2025, the Company acquired substantially all assets of W1 Global, LLC, related to advisory and investigative professional services, recording **$54 thousand** as intangible assets (Customer Relationships) with a preliminary three-year life[103](index=103&type=chunk) [17. Subsequent Events](index=25&type=section&id=17.%20Subsequent%20Events) This note confirms the company's review of activities for any events requiring disclosure after the reporting period - The Company reviewed activities through August 14, 2025, and determined no subsequent events require disclosure[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and future outlook, including critical accounting policies and liquidity [Overview](index=26&type=section&id=Overview) This section introduces Wrap Technologies, its core products, and its target market within the public safety sector - Wrap Technologies is a global public safety technology and services company providing non-painful compliance tools and immersive training for law enforcement, including the BolaWrap® remote restraint device, Wrap Reality VR training, and Wrap Intrensic Body-Worn Camera/Digital Evidence Management solutions[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - The target market includes over **900,000 law enforcement officers** in the U.S. and over **12 million globally**, with exploration into military and private security sectors, and the non-lethal products market projected to reach **$16.1 billion by 2027**[107](index=107&type=chunk) - The BolaWrap 150, a new generation device, is electronically deployed, more robust, smaller, lighter, and simpler to use than its predecessor, the BolaWrap 100[106](index=106&type=chunk) [Business Outlook and Challenges](index=27&type=section&id=Business%20Outlook%20and%20Challenges) This section discusses the company's anticipated market opportunities, product adoption, and efforts in cost containment - The company anticipates increasing global recognition and market opportunities for its non-lethal products and training services due to growing demand for safer policing practices[114](index=114&type=chunk)[115](index=115&type=chunk)[119](index=119&type=chunk) - BolaWrap is used by over **900 U.S. law enforcement agencies** and in **62 countries**, with reported successful outcomes in **85%** of use cases, particularly for individuals with behavioral health issues and domestic violence calls[116](index=116&type=chunk)[117](index=117&type=chunk) - Operating expenses decreased by **$0.9 million** for the three months and **$1.2 million** for the six months ended June 30, 2025, compared to 2024, due to cost containment initiatives[121](index=121&type=chunk) - The company had a backlog of approximately **$60 thousand** and deferred revenue of **$325 thousand** as of June 30, 2025, with expectations for continued growth in BolaWrap 150 and Wrap Reality sales[124](index=124&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the key accounting policies and estimates that require significant management judgment and can materially impact financial results - Key accounting policies requiring significant judgment include revenue recognition, share-based compensation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty liabilities, and warrants[132](index=132&type=chunk) - Warrants are now classified as equity-classified instruments as of June 30, 2025, following amendments, which is a significant change from previous liability classification[139](index=139&type=chunk) - Business combinations are accounted for using the purchase method, with acquired assets and liabilities recorded at fair value, and acquisition-related expenses expensed as incurred[140](index=140&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, comparing current period results to prior periods [Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 (Unaudited)](index=32&type=section&id=Three%20Months%20Ended%20June%2030,%202025,%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024%20%28Unaudited%29) This subsection analyzes the company's financial performance for the three months ended June 30, 2025, in comparison to the same period in 2024 Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :--- | :--- | :--------- | :--------- | | Product sales | $197 | $1,251 | $(1,054) | (84)% | | Managed services | $764 | $- | $764 | -% | | Other revenue | $51 | $322 | $(271) | (84)% | | Total revenues | $1,012 | $1,573 | $(561) | (36)% | | Cost of revenue | $525 | $589 | $(64) | (11)% | | Gross profit | $487 | $984 | $(497) | (51)% | | Selling, general and administrative | $2,986 | $3,475 | $(489) | (14)% | | Research and development | $354 | $679 | $(325) | (48)% | | Total operating expenses | $3,340 | $4,154 | $(814) | (20)% | | Loss from operations | $(2,853) | $(3,170) | $317 | (10)% | - Total revenues decreased by **36%** due to lower product orders, partially offset by new managed services revenue from the W1 acquisition[149](index=149&type=chunk) - Gross profit decreased by **51%** to **$0.5 million**, with gross margin falling to **48%** from **63%**, primarily due to lower BolaWrap 150 product sales volume[150](index=150&type=chunk) - Operating loss improved by **$0.3 million**, reflecting reduced revenues offset by lower operating costs from cost containment efforts[158](index=158&type=chunk) [Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024 (Unaudited)](index=33&type=section&id=Six%20Months%20Ended%20June%2030,%202025,%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024%20%28Unaudited%29) This subsection analyzes the company's financial performance for the six months ended June 30, 2025, in comparison to the same period in 2024 Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :--- | :--- | :--------- | :--------- | | Product sales | $550 | $2,578 | $(2,028) | (79)% | | Managed services | $1,000 | $- | $1,000 | -% | | Technology enabled services | $228 | $471 | $(243) | (52)% | | Total revenues | $1,778 | $3,049 | $(1,271) | (42)% | | Cost of revenue | $695 | $1,229 | $(534) | (43)% | | Gross profit | $1,083 | $1,820 | $(737) | (40)% | | Selling, general and administrative | $7,128 | $7,695 | $(567) | (7)% | | Research and development | $732 | $1,434 | $(702) | (49)% | | Total operating expenses | $7,860 | $9,129 | $(1,269) | (14)% | | Loss from operations | $(6,777) | $(7,309) | $532 | (7)% | - Total revenues decreased by **42%** to **$1.8 million**, primarily due to lower product orders, partially offset by managed services revenue from the W1 acquisition[161](index=161&type=chunk) - Gross profit decreased by **40%** to **$1.1 million**, with gross margin at **61%**, impacted by lower BolaWrap 150 sales volume[162](index=162&type=chunk) - Operating loss improved by **$0.5 million** to **$6.8 million**, reflecting reduced revenues offset by lower operating costs from cost containment efforts[168](index=168&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash, its current capital position, and future funding needs - As of June 30, 2025, the Company had **$4.2 million** in cash and cash equivalents and cumulative losses of **$105.1 million**, with working capital, net of short-term warrants, increasing by **$3.6 million** compared to December 31, 2024[170](index=170&type=chunk) - The Company believes it has sufficient capital to fund operations for the next twelve months, with future liquidity expected from product sales, stock option/warrant exercises, and potential equity/debt financing[169](index=169&type=chunk)[170](index=170&type=chunk) - Proceeds from the 2025 Private Placement provided **$5.7 million** in financing activities for the six months ended June 30, 2025[195](index=195&type=chunk) - The Company has contractual obligations including a multi-year office lease in Coconut Grove (**$3.5 million** remaining) and a new manufacturing facility lease in Southwest Virginia (**$600 thousand** remaining), along with **$509 thousand** in purchase commitments[196](index=196&type=chunk)[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Wrap Technologies, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, concluding they were effective, with no material changes in internal control over financial reporting - The Executive Chairman and CEO concluded that disclosure controls and procedures were effective as of June 30, 2025[200](index=200&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, and other disclosures not included in the financial statements [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the financial statements for information regarding legal proceedings and claims arising in the ordinary course of business - Information on legal proceedings is incorporated by reference from Note 13 Commitments and Contingencies of the Notes to Consolidated Financial Statements[202](index=202&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) Management is not aware of any material changes to the risk factors previously discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024, were identified[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of the Company's equity securities during the six months ended June 30, 2025, other than those previously reported - No unregistered sales of equity securities occurred during the six months ended June 30, 2025, beyond those previously reported in a Current Report on Form 8-K[204](index=204&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults in the payment of principal, interest, or other material defaults with respect to any indebtedness - There has been no default in the payment of principal, interest, or any other material default with respect to any indebtedness of the Company[205](index=205&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[206](index=206&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information is reported[207](index=207&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report, including warrant amendments, certifications, and XBRL exhibits - Exhibits include Form of Series A Warrant Amendment and Form of 2025 Warrant Amendment, both dated June 30, 2025[209](index=209&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a)/15d-14(a) and Section 1350) are filed concurrently or furnished[209](index=209&type=chunk) - Extensible Business Reporting Language (XBRL) Exhibits are included, such as the Inline XBRL Instance Document and Taxonomy Extension Documents[209](index=209&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) This section contains the official attestations by the company's authorized officers, confirming the accuracy and completeness of the report [Signatures](index=43&type=section&id=SIGNATURES) The report is duly signed on behalf of Wrap Technologies, Inc. by Scot Cohen, Chief Executive Officer, and Jerry Ratigan, Chief Financial Officer, on August 14, 2025 - The report was signed by Scot Cohen, Chief Executive Officer, and Jerry Ratigan, Chief Financial Officer, on August 14, 2025[212](index=212&type=chunk)

[Executive Summary & Recent Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Recent%20Highlights) This section provides an overview of Wrap Technologies' Q2 2025 financial and operational performance, along with key business developments and strategic advancements [Q2 2025 Financial & Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20%26%20Operational%20Highlights) Wrap Technologies achieved significant cost reductions and cash flow improvements in Q2 2025, while strategically repositioning and reclassifying warrant liabilities to reduce future earnings volatility - Wrap Technologies, Inc. announced its Q2 2025 financial and operational results on August 14, 2025[1](index=1&type=chunk) Operating Expenses and Cash Flow Improvement | Indicator | Q2 2025 | Q1 2025 | Change (QoQ) | H1 2025 | H1 2024 | Change (YoY) | | :--------------------------------- | :------------- | :------------- | :---------- | :----------- | :----------- | :---------- | | Operating Expenses (in millions) | $3.3 | $4.5 | -26% | $7.9 | $9.1 | -14% | | Net Cash Outflow from Operating Activities (in millions) | - | - | - | $5.0 | $7.2 | -$2.2 | | Cash and Cash Equivalents, End of Period (in millions) | $4.2 | - | +16% (vs. Dec 31, 2024) | - | - | - | - The company successfully amended terms of outstanding warrants, reclassifying liabilities to additional paid-in capital, reducing future non-cash fair value changes and earnings volatility[4](index=4&type=chunk) H1 2025 Revenue | Period | Revenue (in millions) | | :--- | :-------------- | | Q2 2025 | $1.0 | | H1 2025 | $1.8 | [Other Recent Business Developments](index=1&type=section&id=Other%20Recent%20Business%20Developments) Wrap Technologies advanced product innovation with WrapVision, appointed a new CFO, and strengthened its market position in pre-escalation law enforcement tools following a Supreme Court ruling - Wrap launched WrapVision, an all-in-one North American-made body camera solution for law enforcement, public safety, and healthcare[3](index=3&type=chunk) - Wrap announced the appointment of Gerald "Jerry" Ratigan as the company's Chief Financial Officer[8](index=8&type=chunk) - The Supreme Court's Barnes v. Felix ruling expanded officer liability during pre-escalation, aligning with Wrap's mission and potentially accelerating BolaWrap® adoption[8](index=8&type=chunk) - The company expects to take possession of its new manufacturing facility in Norton, Virginia by the end of August 2025[8](index=8&type=chunk) [About Wrap Technologies, Inc.](index=2&type=section&id=About%20Wrap%20Technologies%2C%20Inc.) This section details Wrap Technologies' company overview and its comprehensive product portfolio, including non-lethal tools and training solutions for public safety [Company Overview](index=2&type=section&id=Company%20Overview) Wrap Technologies, Inc. is a global leader in public safety technology and non-lethal tools, addressing complex challenges for public safety organizations through innovation - Wrap Technologies, Inc. (Nasdaq: WRAP) is a global leader in innovative public safety technology and non-lethal tools[5](index=5&type=chunk) [Product Portfolio](index=2&type=section&id=Product%20Portfolio) Wrap Technologies offers a diverse public safety product portfolio, including the non-lethal BolaWrap® 150, immersive VR training simulator Wrap Reality™ VR, and North American-made WrapVision body camera system, enhancing law enforcement efficiency and safety [BolaWrap® 150](index=2&type=section&id=BolaWrap%C2%AE%20150) BolaWrap® 150 is a non-pain compliance tool providing a safer pre-escalation option for law enforcement, reducing injury risks for officers and suspects - BolaWrap® 150 is a non-pain compliance tool that provides a safer pre-escalation option for law enforcement through multi-sensory cognitive distraction, reducing injury risks for officers and suspects[6](index=6&type=chunk) - The device is used by over **1,000 agencies in the U.S.** and **60 countries globally**, supported by IADLEST certified training[6](index=6&type=chunk) [Wrap Reality™ VR](index=2&type=section&id=Wrap%20Reality%E2%84%A2%20VR) Wrap Reality™ VR is an immersive training simulator designed to enhance decision-making under pressure, offering realistic interactive scenarios for first responders - Wrap Reality™ VR is a fully immersive training simulator designed to improve decision-making under pressure, providing first responders with realistic interactive scenarios reflecting modern law enforcement challenges[7](index=7&type=chunk) [WrapVision](index=3&type=section&id=WrapVision) WrapVision is a new body camera and evidence management system designed for efficiency, security, and transparency, meeting the stringent demands of modern law enforcement - WrapVision is a new body camera and evidence management system designed for efficiency, security, and transparency, meeting the stringent demands of modern law enforcement[9](index=9&type=chunk) - WrapVision cameras, powered by IONODES, feature seamless cloud integration, adhere to TAA compliance and GSA contract requirements, are manufactured in North America, and are planned to be 'Made in USA' by late 2025, ensuring data integrity and eliminating foreign surveillance risks[10](index=10&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Wrap Technologies' condensed consolidated balance sheets, statements of operations, and cash flows, highlighting key financial performance indicators [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Wrap Technologies' balance sheet shows a slight increase in total assets and a significant decrease in total liabilities due to warrant liability reclassification, leading to a substantial increase in total stockholders' equity Balance Sheet Key Data (in thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------- | :------------- | | Cash and Cash Equivalents | $4,177 | $3,610 | | Total Assets | $15,612 | $15,121 | | Warrant Liabilities | $0 | $10,131 | | Total Liabilities | $3,851 | $14,871 | | Additional Paid-in Capital | $120,783 | $105,326 | | Total Stockholders' Equity | $11,761 | $250 | - Warrant liabilities decreased from **$10,131 thousand** on December 31, 2024, to **$0** on June 30, 2025, primarily due to reclassification to additional paid-in capital[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) In Q2 2025, Wrap Technologies experienced a year-over-year decrease in total revenue but significant growth in managed services revenue; despite operating expense reductions, net loss expanded due to fair value changes in warrant liabilities Statements of Operations and Comprehensive Loss Key Data (in thousands) | Indicator | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------- | :------------- | :------------- | :----------- | :----------- | | Product Sales Revenue | $197 | $1,251 | $550 | $2,578 | | Managed Services Revenue | $764 | $0 | $1,000 | $0 | | Technical Support Services Revenue | $51 | $322 | $228 | $471 | | Total Revenue | $1,012 | $1,573 | $1,778 | $3,049 | | Selling, General and Administrative Expenses | $3,181 | $3,475 | $7,266 | $7,695 | | Research and Development Expenses | $162 | $679 | $594 | $1,434 | | Total Operating Expenses | $3,343 | $4,154 | $7,860 | $9,129 | | Operating Loss | $(2,856) | $(3,170) | $(6,777) | $(7,309) | | Change in Fair Value of Warrant Liabilities | $(871) | $2,738 | $3,158 | $6,917 | | Net Loss | $(3,727) | $(385) | $(3,618) | $(268) | | Basic and Diluted Net Loss Per Share | $(0.07) | $(0.02) | $(0.07) | $(0.02) | - Managed services revenue significantly increased to **$764 thousand** in Q2 2025 from **$0** in the prior year, with H1 managed services revenue reaching **$1,000 thousand**[17](index=17&type=chunk) - Despite a year-over-year decrease in operating expenses, net loss significantly increased due to a change in fair value of warrant liabilities from **$2,738 thousand** in Q2 2024 to **($871) thousand** in Q2 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In H1 2025, Wrap Technologies saw reduced cash outflows from operating activities and a substantial increase in cash inflows from financing activities, primarily from warrant and common stock issuance, leading to a significant increase in cash and cash equivalents Cash Flow Statement Key Data (in thousands) | Indicator | H1 2025 | H1 2024 | | :--------------------------------- | :------------- | :------------- | | Net Cash Outflow from Operating Activities | $(5,009) | $(7,249) | | Net Cash (Outflow) Inflow from Investing Activities | $(153) | $4,890 | | Net Cash Inflow from Financing Activities | $5,729 | $468 | | Net Increase (Decrease) in Cash and Cash Equivalents | $567 | $(1,891) | | Cash and Cash Equivalents, End of Period | $4,177 | $2,064 | - Cash inflows from financing activities primarily stemmed from **$5,729 thousand** generated by the issuance of warrants and common stock[19](index=19&type=chunk) - Non-cash investing and financing activities included **$12,159 thousand** from the reclassification of warrant liabilities to additional paid-in capital[19](index=19&type=chunk) [Additional Information](index=3&type=section&id=Additional%20Information) This section includes important legal and corporate details, such as trademark information, cautionary notes on forward-looking statements, and investor relations contact information [Trademark Information](index=3&type=section&id=Trademark%20Information) This report mentions Wrap, the Wrap logo, BolaWrap®, Wrap Reality™, and Wrap Training Academy as trademarks of Wrap Technologies, Inc., some registered in the U.S. and abroad - Wrap, the Wrap logo, BolaWrap®, Wrap Reality™ and Wrap Training Academy are trademarks of Wrap Technologies, Inc., some of which are registered in the U.S. and abroad[11](index=11&type=chunk) [Cautionary Note on Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20on%20Forward-Looking%20Statements) This press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially, including compliance with Nasdaq listing standards, product training and sales capabilities, market acceptance, funding availability, regulatory risks, and geopolitical conflicts - This press release contains "forward-looking statements" subject to various risks and uncertainties that could cause actual results to differ materially[12](index=12&type=chunk) - Risk factors include the company's ability to maintain Nasdaq listing standards, successfully implement product training programs, manufacture and sell products, achieve market acceptance, secure funding, navigate complexities of government sales, address product defects, manage litigation risks, comply with government regulations, respond to health crises, mitigate geopolitical conflicts, and protect intellectual property[12](index=12&type=chunk) [Investor Relations Contact](index=3&type=section&id=Investor%20Relations%20Contact) Investors can contact Wrap Technologies' investor relations department via phone or email - Investor Relations contact information: phone (800) 583-2652, email ir@wrap.com[13](index=13&type=chunk)

Financial Results - Wrap Technologies reported total revenues of $1.0 million for Q2 2025, a decrease from $1.6 million in Q2 2024, and $1.8 million for the six months ended June 30, 2025, compared to $3.0 million in the same period of 2024 [16][16] - The company experienced a gross profit of $487,000 for Q2 2025, down from $984,000 in Q2 2024, and a gross profit of $1.1 million for the six months ended June 30, 2025, compared to $1.8 million in the same period of 2024 [16][16] - Operating expenses were reduced by 26% in Q2 2025 to $3.3 million from $4.2 million in Q1 2025, and by 14% year-to-date to $7.9 million from $9.1 million in the same prior year period [6][6] - The net loss for Q2 2025 was $3.7 million, compared to a net loss of $385,000 in Q2 2024, and the net loss for the six months ended June 30, 2025, was $3.6 million compared to $268,000 in the same period of 2024 [16][16] Cost Reduction and Cash Flow - The company achieved a reduction in net cash used in operations by $2.2 million during the six months ended June 30, 2025, down to $5.0 million from $7.2 million in the same period in 2024 [6][6] - Cash increased by 16% to $4.2 million at June 30, 2025, up from $3.6 million at December 31, 2024 [6][6] Strategic Initiatives - Wrap Technologies launched WrapVision, an all-in-one body-worn camera solution for law enforcement, public safety, and healthcare [6][6] - The company appointed Gerald "Jerry" Ratigan as Chief Financial Officer [6] - The Supreme Court's ruling in Barnes v. Felix expanded officer liability to the pre-escalation period, aligning with Wrap's mission and positioning BolaWrap® for accelerated adoption [6][6] Product Development - The BolaWrap® 150 solution is designed to provide law enforcement with a safer choice for managing non-compliant subjects, used by over 1,000 agencies across the U.S. and in 60 countries [5][7] - Wrap Reality™ VR is a training simulator aimed at enhancing decision-making under pressure for first responders [8] - WrapVision is designed for efficiency, security, and transparency, capturing and managing digital evidence with superior video quality [9][10] Balance Sheet and Equity - As of June 30, 2025, total assets were $15.6 million, with total liabilities significantly reduced to $3.9 million from $14.9 million at the end of 2024 [14][15] - The company successfully amended the terms of certain outstanding warrants, allowing for reclassification to additional paid-in capital, which will reduce earnings volatility going forward [6][6]

Core Viewpoint - Wrap Technologies, Inc. has launched Project PAN-DA, a handheld counter-drone system derived from its BolaWrap® 150 platform, aimed at addressing the growing global counter-unmanned aircraft systems (C-UAS) market, projected to reach $6.8 billion by 2030 [1][6]. Company Overview - Wrap Technologies is a leader in innovative public safety technology, focusing on non-lethal tools and solutions for law enforcement and public safety organizations [14]. - The company has a proven track record with its BolaWrap® 150 device, which is used by over 1,000 law enforcement agencies worldwide [15]. Product Development - Project PAN-DA is designed to engage and disable small unmanned aerial systems (sUAS) at close range, providing a cost-effective and reusable alternative to traditional missile interceptors and electronic jamming systems [3][4]. - The system utilizes Wrap's patented tether-and-anchor technology, allowing for multiple engagements per unit, enhancing operational efficiency [3][4]. Market Context - The global counter-drone market is expected to grow from $1.9 billion in 2023 to over $6.8 billion by 2030, driven by the increasing use of small UAS in criminal and military activities [6]. - PAN-DA is positioned as a last-line kinetic defense option that complements existing detection and electronic countermeasure systems [6]. Research and Development - Following the successful proof of concept for Phase One, Wrap's engineering teams will focus on enhancing the system's range, area-of-effect, and cost-effectiveness to adapt to evolving drone threats [8].

Core Insights - Wrap Technologies, Inc. is launching a research and development initiative to adapt its BolaWrap® 150 technology for the counter-unmanned aircraft systems (C-UAS) market, introducing the Wrap-Merlin 1, a modular drone-mounted payload designed to neutralize hostile drones mid-flight without high costs associated with missiles or single-use interceptors [3][10]. Product Development - Wrap-Merlin 1 can mount one to six BolaWrap® 150 cassettes on an FPV drone platform, featuring a remote deployment mechanism and first-person-view targeting system, allowing for effective engagement of hostile drones [4][6]. - The product is designed for rapid deployment and reloading, providing a cost-effective alternative to traditional counter-drone solutions [5][7]. Market Integration - Wrap-Merlin 1 is engineered for integration with Department of Defense (DoD) Blue UAS-approved platforms, allied drone systems, and commercial security operations, supporting NATO-aligned and commercial FPV drone platforms [5][6]. - The open-architecture design allows for quick customization and mission-specific configurations, addressing urgent operational needs for domestic agencies and forward-deployed forces [6][9]. Market Opportunity - The global counter-UAS market is projected to grow from $1.9 billion in 2023 to over $6.8 billion by 2030, driven by increasing drone incursions over military and critical infrastructure sites [10]. - By adapting its existing technology for aerial applications, Wrap has the potential for a cost-efficient entry into the defense sector, which is experiencing strong funding momentum from the U.S. Department of Defense and allied governments [10][11]. Development and Testing - Wrap-Merlin 1 is currently undergoing development testing in both C-UAS environments and live battlefield settings to refine its performance and ensure interoperability across platforms [8][9].

Core Insights - Wrap Technologies, Inc. has launched WrapVision, a next-generation body-worn camera platform designed for law enforcement, public safety, and healthcare professionals, emphasizing compliance with the Trade Agreements Act and North American manufacturing [1][2][13] Product Features - WrapVision features a 6000 mAh battery providing up to 12 hours of operation, a 180° x 180° distortion-free lens, an 8MP high-resolution sensor, and integrated LTE, Wi-Fi, Bluetooth, and VPN for secure live streaming [4] - The platform is compatible with major video management systems like Genetec and Milestone, promoting flexibility and avoiding proprietary ecosystem lock-in [3][4] Strategic Positioning - The launch of WrapVision aligns with the increasing focus on officer safety, community trust, and data security, positioning the company as a reliable partner for U.S. agencies [2][5] - The product aims to address a growing, regulation-driven market segment with high demand for trusted, domestic solutions, supporting Wrap's multi-channel, subscription-driven revenue strategy [8] Data Governance and Security - WrapVision's North American manufacturing and TAA compliance are critical for safeguarding mission-critical data, ensuring adherence to stringent federal sourcing standards [6] - The company offers secure North American exclusive data centers to protect sensitive public safety video and evidence from unauthorized access and cyber threats [7] Cost Efficiency - WrapVision is competitively priced, expected to deliver cost savings over other body-worn camera platforms, and is ready for immediate deployment [8]