Wrap Technologies, Inc. Q2 FY2025 earnings call

• Completed restructuring efforts by the end of Q2. - Undertook a go-to-market pivot with a renewed strategy and solution offering. - BolaWrap deployments are increasing across diverse law enforcement agencies. - The unanimous Supreme Court decision on Barnes v. Felix had a positive impact. - Redefined the message to the 'era of pre escalation', relaunched the BolaWrap 150, optimized pricing models, and introduced integrated systems. - Executed a full-scale relaunch and rebrand on social media. - Applied for just under $1 million in DoJ funded grants for pre-escalation tools, tactics, and training. - Amended warrant terms to reclassify warrant liabilities to additional paid-in capital.

In the second quarter, revenue was $1 million for the quarter and $1.8 million year-to-date. Operating expenses decreased by 26% from Q1 to Q2 2025, dropping to $3.3 million from $4.5 million. Year-to-date operating expenses are down 14% compared to the same period last year, at $7.9 million versus $9.1 million. Cash and cash equivalents increased 16% to $4.2 million as of June 30, 2025, up from $3.6 million on December 31, 2024.

• Anticipate an increase in the volume and size of purchase orders, shifting from one-time product sales to multiyear Wrap subscription offerings. - Newly launched WrapReady and WrapPlus bundles, supported by integrated cassette programs and a learning management system, are expected to meet growing customer demands. - Believe these enhanced offerings aligned with the new go-to-market strategy will drive growth.

Q: How do you plan to accelerate adoption among law enforcement agencies in the U.S. and internationally?

A: Policies and regulatory changes are driving adoption. We've been getting connected with departments, trainers, and command staff. Using a learning management system to deliver consistent messaging. Seeing programs scale with high deployment data.

Q: How do you plan to penetrate non-law enforcement sectors, for example, corrections, private security, schools, hospitals?

A: Inquiries are coming directly to us. We have repeatable success in hospitals, correction facilities, etc. Data and success stories are spreading, leading to penetration in these sectors.

Q: What's the status of the company's move to Virginia? And when do you expect production to ramp up as a result?

A: We are fully moved into Virginia. We have a production facility scheduled with the state of Virginia for an official launch. We are ready to scale production in response to our growing pipeline.

Q: How do you see onetime sales versus subscription services as a portion of your revenues?

A: We are transitioning to a recurring subscription-based revenue model to deliver more value to customers. WrapReady and WrapPlus packages are expected to achieve the objective of driving more recurring revenue.

Q: Last earnings call, you spoke heavily about procuring accurate data surrounding BolaWrap deployments. What figures have you been able to come up with in comparison to other devices used by departments you're partnered with?

A: We are collecting more data. We are getting data through trainers, visits, and calls. The data is driving adoption, with repeatable usage in connected departments.