Q2 2026 Wrap Technologies Inc Earnings Call

August 11, 2026

Operator: Good day, and thank you for standing by. Welcome to the Wrap Technologies, Inc. Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Webcast viewers can type in questions at any time via the webcast Q&A function. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lou Springer.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. Webcast viewers can type in questions at any time, via the webcast Q&A function. Please be advised that today's conference is being recorded.

Speaker #1: Oh, and I'd like to hand the conference over to your speaker today, Lou Springer.

Speaker #2: Thank you. Good afternoon, and welcome to WRAP Technologies' second quarter 2026 earnings conference call. I'm Lou Springer, Vice President of Finance. Joining me today are Scot Cohen, Chief Executive Officer, and Jared Novick, President and Chief Operating Officer.

Lou Springer: Thank you. Good afternoon, and welcome to Wrap Technologies' second quarter 2026 earnings conference call. I'm Lou Springer, vice president of finance. Joining me today is Scot Cohen, chief executive officer, and Jared Novick, president and chief operating officer. We appreciate your time and continued interest in Wrap. Before we begin, I want to remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal Securities regulations. Please review the forward-looking and cautionary statement section at the end of our second quarter 2026 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.

Louis Springer: Thank you. Good afternoon, and welcome to Wrap Technologies' Q2 2026 earnings conference call. I'm Lou Springer, vice president of finance. Joining me today is Scot Cohen, chief executive officer, and Jared Novick, president and chief operating officer. We appreciate your time and continued interest in Wrap. Before we begin, I want to remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal Securities regulations. Please review the forward-looking and cautionary statement section at the end of our Q2 2026 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.

Speaker #2: We appreciate your time and continued interest in WRAP. Before we begin, I want to remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Federal Securities Regulations.

Speaker #2: Please review the forward-looking and cautionary statements section at the end of our second quarter 2026 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.

Speaker #2: Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated.

Lou Springer: Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. Also, during today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating the company's financial performance.

Louis Springer: Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. Also, during today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating the company's financial performance.

Speaker #2: These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them.

Speaker #2: Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov.

Speaker #2: Also, during today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating the company's financial performance. Descriptions of those non-GAAP financial measures that we use and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release.

Lou Springer: Descriptions of those non-GAAP financial measures that we use and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release. Unless otherwise stated, all reported results discussed in this call will compare the Q2 ended 30 June 2026, to the Q2 ended 30 June 2025. The earnings release will be available on the financial information section of our website at ir.wrap.com. In addition, a replay of this earnings call will be posted to our website after the call. I will now hand it over to Scot.

Louis Springer: Descriptions of those non-GAAP financial measures that we use and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release. Unless otherwise stated, all reported results discussed in this call will compare the Q2 ended 30 June 2026, to the Q2 ended 30 June 2025. The earnings release will be available on the financial information section of our website at ir.wrap.com. In addition, a replay of this earnings call will be posted to our website after the call. I will now hand it over to Scot.

Speaker #2: Unless otherwise stated, all reported results discussed in this call will compare the second quarter ended June 30, 2026, with the second quarter ended June 30, 2025.

Speaker #2: The earnings release will be available in the financial information section of our website at ir.wrap.com. In addition, a replay of this earnings call will be posted to our website after the call.

Speaker #2: I will now hand it over to Scot.

Speaker #3: Thanks, Lou. And thank you, everybody, for joining the call today. We're coming off our best quarter in years. Revenue doubled quarter over quarter, and we doubled compared to the second quarter last year.

Scot Cohen: Thanks, Lou. Thank you everybody for joining the call today. We're coming off our best quarter in years. Revenue doubled quarter-over-quarter, and we doubled compared to the Q2 of last year. Operations continue to become more efficient. We're expanding sales. We productize our training. We're growing our BolaWrap programs, and we have doubled our product offerings. Today, we serve federal, state, and local private sector customers. The big difference now is the money is flowing from the states, local, and federal level, and we're following that money. There are funded requirements which we now have capabilities to service for the first time in a long time. We've transformed Wrap from a single-product company into a portfolio of solutions with a strong emphasis on scalable training delivered through our learning management system, and we've accomplished all this at a fraction of the expense of the past.

Speaker #3: Operations continue to become more efficient. We're expanding sales. We are productizing our training. We're growing our BolaWrap programs, and we have doubled our product offerings.

Speaker #3: Today, we can serve we serve federal, state, and local private sector customers. But the big difference now is the money is flowing from the state's local and federal level.

Speaker #3: And we're following that money. There are funded requirements which we now have capabilities to service for the first time in a long time. We transformed WRAP from a single product company into a portfolio of solutions, with a strong emphasis on scalable training, delivered through our learning management system, and we've accomplished all this at a fraction of the expense of the past.

Speaker #3: But that's not the real story. Three recent developments have put us in a truly unique position that we intend to capitalize on.

Scot Cohen: That's not the real story. Three recent developments have put us in a truly unique position that we intend to capitalize on. The first is the ATF determination issued in early July that BolaWrap is not classified as a firearm or a weapon. For years, that uncertainty limited our ability to pursue the private security market, a market significantly larger than the domestic law enforcement business. One company I spoke to last week employs more security guards than there are police officers in this entire country. In the past 30 days, we've had dozens of conversations with potential customers in this market, and we've already received our first grant-funded training order. This opportunity is significant, and the time to pursue it is right now. Security guards face many of the same challenges as our law enforcement officers do, but with one major difference.

Speaker #3: The first is the ATF determination issued in early July that bullrap is not classified as a firearm or a weapon. For years, that uncertainty limited our ability to pursue the private private security market, a market significantly larger than the domestic law enforcement business.

Speaker #3: One company I spoke to last week employs more security guards than there are police officers in this entire country. In the past 30 days, we've had dozens of conversations with potential customers in this market, and we've already received our first grant-funded training order.

Speaker #3: This opportunity is significant, and the time to pursue it is right now. Security guards face many of the same challenges as our law enforcement officers do.

Speaker #3: But with one major difference: most of them are unarmed, and they receive very little training. The average police officer receives roughly 800 hours of training before becoming before receiving their badge.

Scot Cohen: Most of them are unarmed, and they receive very little training. The average police officer receives roughly 800 hours of training before receiving their badge. By comparison, security guards receive fewer than 50 hours at best. The problem is access to the training, and it's the budget. BolaWrap now has a solution these professionals can actually carry, and our LMS allows us to deliver consistent, scalable training wherever they operate. Even more encouraging is the insurance companies that are interested in supporting its adoption, and we're going to get more into that when Jared presents. Dozens of conversations with private sector organizations have given us clear direction, and we're going for this market aggressively. The second development is the return of DOJ grant funding. We've identified 11 active programs that can fund the BolaWrap, can fund our body cameras, that are funding de-escalation training and virtual training.

Speaker #3: By comparison, security guards receive fewer than 50 hours at best. The problem is access to the training, and it's the budget. BolaWrap now has a solution these professionals can actually carry, and our LMS allows us to deliver consistent, scalable training wherever they operate. Even more encouraging is the insurance companies that are interested in supporting its adoption.

Speaker #3: And we're going to get more into that when Jared presents. Dozens of conversations with private sector organizations have given us clear direction, and we're going for this market aggressively.

Speaker #3: Dozens. The second development is the return of DOJ grant funding. We've identified 11 active programs that can fund the BolaWrap, can fund our body cameras, and that are funding de-escalation training and virtual training.

Speaker #3: Most of our customers are small, mid-sized departments, where grant funding is essential to purchasing equipment and providing effective training. The funding window has reopened, and we're positioned to help customers take advantage of it.

Scot Cohen: Most of our customers are small, mid-size departments where grant funding is essential to purchasing equipment, providing effective training. The funding window has reopened, and we are positioned to help customers take advantage of it. The third development is the Frenel opportunity. We have been watching this technology for years. I will spare you the long story, but when we received a call telling us that the tech was finally operational, we dug in. We saw it detect a wide range of threats, including drones that could not be tracked by some of the most advanced thermal systems. Its polarization layer identified both material characteristics and heat signatures. One screen was blue sky and the other screen was a clear threat. That conclusion was obvious to us. Frenel could see what other systems could not. This technology has critical applications for our cities, our borders, and our national defense.

Speaker #3: And the third development for now is the Fresnel opportunity. We've been watching this technology for years, and I'll spare you the long story.

Speaker #3: But when we received a call telling us that the tech was finally operational, we dug in. We saw it detect a wide range of threats, including drones that couldn't be tracked by some of the most advanced thermal systems. Its polarization layer identified both material characteristics and heat signatures.

Speaker #3: One screen was blue sky, and the other screen was a clear threat. That conclusion was obvious to us. Fresnel's could see what other systems could not.

Speaker #3: This technology has critical applications for our cities, our borders, and our national defense. More importantly, it gives WRAP a structural advantage that competitors simply cannot copy, replicate, or acquire.

Scot Cohen: More importantly, it gives WRAP a structural advantage that competitors simply cannot copy, replicate, or acquire. WRAP now holds an exclusive US and NATO right to TPiCore by Frenel, a physics-based polarimetric sensing technology. It detects, identifies, and classifies objects based on the materials and shapes. It is one of the few technologies capable of addressing RF silent and camouflage targets in dense urban GPS-denied, cluttered, and RF-contested environments. In plain English, it can distinguish a drone from a bird under conditions where conventional systems struggle. No jamming, no spoofing, no countermeasures. Together, these three developments open new markets across private security, law enforcement, and national defense. This is a significant opportunity for WRAP and for all of us. With that, Lou, it is back to you.

Speaker #3: WRAP now holds an exclusive US and NATO right to TryCore by Fresnel, a physics-based polymetric sensing technology that identifies and classifies objects based on their materials and shapes.

Speaker #3: It is one of the few technologies capable of addressing RF-silent and camouflage targets in dense urban, GPS-denied, cluttered, and RF-contested environments.

Speaker #3: In plain English, it can distinguish a drone from a bird under conditions where conventional systems struggle. No jamming, no spoofing, no countermeasures. Together, these three developments open new markets across private security, law enforcement, and national defense.

Speaker #3: This is a significant opportunity for WRAP and for all of us. With that, Lou, it's back to you.

Speaker #2: Thank you, Scott. Second quarter 2026 financial highlights are as follows: Total revenue increased 103% to $2.1 million, compared to $1.0 million in the prior-year period.

Lou Springer: Thank you, Scot. Q2 2026 financial highlights are as follows. Total revenue increased 103% to $2.1 million compared to $1 million in the prior year period. Gross profits increased 217% to $1.5 million compared to $0.5 million in the prior year period, and gross margin expanded to approximately 75% compared to approximately 48% in the prior year period. Our loss from operations improved 21% to -$2.3 million compared to a loss of -$2.9 million in the prior year period. Net loss improved 39% to a loss of -$2.3 million compared to a loss of -$3.7 million in the prior year period. The prior year period quarter included a $0.9 million non-cash loss from the change in fair value of warrant liabilities that did not recur. Cash and cash equivalents were $4.8 million at 30 June 2026 compared to $3.5 million at 31 December 2025.

Louis Springer: Thank you, Scot. Q2 2026 financial highlights are as follows. Total revenue increased 103% to $2.1 million compared to $1 million in the prior year period. Gross profits increased 217% to $1.5 million compared to $0.5 million in the prior year period, and gross margin expanded to approximately 75% compared to approximately 48% in the prior year period. Our loss from operations improved 21% to $2.3 million compared to a loss of -$2.9 million in the prior year period. Net loss improved 39% to a loss of -$2.3 million compared to a loss of -$3.7 million in the prior year period. The prior year period quarter included a $0.9 million non-cash loss from the change in fair value of warrant liabilities that did not recur. Cash and cash equivalents were $4.8 million at 30 June 2026 compared to $3.5 million at 31 December 2025.

Speaker #2: Gross profits increased 217% to $1.5 million, compared to $0.5 million in the prior year period, and gross margin expanded to approximately 75%, compared to approximately 48% in the prior year period.

Speaker #2: Our loss from operations improved 21% to $2.3 million compared to a loss of $2.9 million in the prior year period. Net loss improved 39% to a loss of $2.3 million compared to a loss of $3.7 million in the prior year period.

Speaker #2: The prior-year period quarter included a $0.9 million non-cash loss from the change in fair value of warrant liabilities that did not recur. Cash and cash equivalents were $4.8 million at June 30, 2026, compared to $3.5 million at December 31, 2025.

Speaker #2: Lastly, total liabilities were reduced to $2 million at June 30, 2026, from $3.9 million at December 31, 2025, reflecting the termination of the company's former office lease.

Lou Springer: Lastly, total liabilities were reduced to $2 million at 30 June 2026 from $3.9 million at 31 December 2025, reflecting the termination of the company's former office lease. Now I will hand it over to Jared.

Louis Springer: Lastly, total liabilities were reduced to $2 million at 30 June 2026 from $3.9 million at 31 December 2025, reflecting the termination of the company's former office lease. Now I will hand it over to Jared.

Speaker #2: Now, I'll hand it over to Jared.

Speaker #3: Thanks, Lou. I'm about to describe a company that's changing. New markets. Bigger markets. A new revenue model, and a new platform. And let me tell you that story in five parts.

Scot Cohen: Thanks, Lou. I am about to describe a company that is changing. New markets, bigger markets, a new revenue model, and a new platform. Let me tell you that story in five parts. First, the environment around this company changed this year twice. Both were outside of WRAP. The first came from the Supreme Court in 2025. Barnes v. Felix rejected the narrow reading on the use of force. It is a Supreme Court decision, and the question of what an officer faced in the final seconds changed. The whole encounter now matters. What happened before it, what officers knew, and how the situation developed. That matters to us because our thesis has always been about creating another option earlier, before an encounter reaches its most dangerous point. The second came in June. ATF classified the BolaWrap 150 as an instrument of restraint and a rescue tool.

Jared Novick: Thanks, Lou. I am about to describe a company that is changing. New markets, bigger markets, a new revenue model, and a new platform. Let me tell you that story in five parts. First, the environment around this company changed this year twice. Both were outside of WRAP. The first came from the Supreme Court in 2025. Barnes v. Felix rejected the narrow reading on the use of force. It is a Supreme Court decision, and the question of what an officer faced in the final seconds changed. The whole encounter now matters. What happened before it, what officers knew, and how the situation developed. That matters to us because our thesis has always been about creating another option earlier, before an encounter reaches its most dangerous point. The second came in June. ATF classified the BolaWrap 150 as an instrument of restraint and a rescue tool.

Speaker #3: First, the environment around this company changed this year—twice. Both were outside of WRAP. The first came from the Supreme Court in 2025.

Speaker #3: Barnes v. Felix rejected the narrow reading on the use of force in the Supreme Court decision, and the question of what an officer faced in the final seconds changed.

Speaker #3: The whole encounter now matters. What happened before did. What officers knew, and how the situation developed, that matters to us because our thesis has always been about creating another option earlier, before an encounter reaches its most dangerous point.

Speaker #3: The second came in June. ATF classified the BolaWrap 150 as an instrument of restraint and a rescue tool. Under the federal statutes defining firearms and weapons, the BolaWrap 150 is neither.

Scot Cohen: Under the federal statutes defining firearms and weapons, the BolaWrap 150 is neither. You put those side by side. The constitutional lens has widened to what they call the totality of circumstances. The totality of the encounter now matters. The federal government has determined that our tool, built to create an option earlier, is no longer a weapon. Not only is it not a firearm, it is not a weapon. We did not manufacture the constitutional change. We did not control the federal classification. We built the technology that now sits at the intersection of both. That is a structural advantage, and it does not exist with this clarity until just a few short months ago when all this came into fruition. It is a big one. The second part is what we are selling. What we sell is changing. A BolaWrap in a holster is not a capability.

Speaker #3: Now, you put those side by side. The constitutional lens has widened to what they call the totality of circumstances—the totality of the encounter now matters.

Speaker #3: And the federal government has determined that our tool, though it could create an option earlier, is no longer a weapon. Not only is it not a firearm, it's not a weapon.

Speaker #3: We didn't manufacture the constitutional change. We didn't control the federal classification. But we built the technology that now sits at the intersection of both.

Speaker #3: That's a structural advantage. And it doesn't exist with this clarity until just a few short months ago when all this came into fruition. It's a big one.

Speaker #3: The second the second part is what we're selling. What we sell is changing. A bullrap in a holster is not a capability. It becomes a capability when an officer recognizes the moment deploys it correctly under stress, and still has that proficiency months later.

Scot Cohen: It becomes a capability when an officer recognizes the moment

Jared Novick: deploys it correctly under stress, and still has that proficiency months later. We all know proficiency decays. A one-day certification class does not reliably survive a year on the street. So we did something about it. The real product is not the device. We are selling readiness, and WrapTactics is how we deliver it. We launched earlier this year, and as of this month, the core content library is complete. Here is what that changes. Instead of spending classroom time where we did instruction in person on foundational material that cannot be learned beforehand, we now send digital training in advance. Now we use in-person time for what actually requires being in the room for, scenario work of what they see in the streets every day, coaching, certification, and the customer relationship. Digital does not replace the instructor.

Speaker #3: We all know proficiency decays. But one day's certification class doesn't reliably survive a year on the street. So we did something about it. The real product isn't the device.

Speaker #3: We're selling readiness, and WRAP tactics is how we deliver it. We launched earlier this year, and as of this month, the core content library is complete.

Speaker #3: And here's what that changes. Instead of spending classroom time where we did instruction in person on foundational material that can't be learned be beforehand, we now send digital training in advance.

Speaker #3: And now we use in-person time for what actually requires being in the room. Scenario work of what they see in the streets every day.

Speaker #3: Coaching, certification, and the customer relationship. Digital does not replace the instructor. It makes the instructor more valuable. And it lets the relationship continue after the instructor leaves.

Jared Novick: It makes the instructor more valuable, and it lets the relationship continue after the instructor leaves. Commercially, that means we can take proficiency to market as a subscription. The customer stops buying a device and a single training day. They start buying a standard of readiness that we can help them maintain. Recurring training, recurring proficiency, recurring engagement. The recurring revenue is the economic consequence of this model. Let me be precise where we are. The capability is built, and it is ready to sell. This revenue is ahead of us, not behind us. The shift is real because it changes what we are from a company that closes a sale to a company that maintains a capability. Thirdly, our market just got materially larger. Everything so far has been about law enforcement. That has been our market. It is no longer the boundary of it. Start with private security.

Speaker #3: Commercially, that means we can take proficiency to market as a subscription. The customer stops buying a device and a single training day. They start buying a standard of readiness that we can help them maintain.

Speaker #3: Recurring training. Recurring proficiency. Recurring engagement. The recurring revenue is the economic consequence of this model. And let me be precise where we are: the capability is built, and it's ready to sell.

Speaker #3: This revenue is ahead of us, not behind us. The shift is real because it changes what we are—from a company that closes a sale, to a company that maintains a capability.

Speaker #3: Thirdly, our market just got materially larger. Everything so far has been about law enforcement—that's been our market. It's no longer the boundary of it.

Speaker #3: Start with private security. A significant portion of those officers are unarmed, and in some environments, they cannot be armed. But they're still expected to manage conflict, and respond when behavior escalates.

Jared Novick: A significant portion of those officers are unarmed, and in some environments, they cannot be armed. They are still expected to manage conflict and respond when behavior escalates. When it does, there is an enormous gap between the verbal command and then calling law enforcement. Sometimes the only real choice is to act or not act, and either way, the outcome carries legal consequence and suboptimal results. That gap is operational risk, and it is a liability for employers, insurers, property owners, and security providers, all of whom increasingly have to answer one question: What options were available, and what did we give these people before the situation became an emergency? A tool the federal government just declassified as not a firearm or not a weapon sounds to be a pretty good option for that. There are over 1.2 million licensed security officers in the United States.

Speaker #3: When it does, there's an enormous gap between the verbal command and then calling law enforcement. Sometimes, the only real choice is to act or not act.

Speaker #3: And either way, the outcome carries legal consequences and suboptimal results. That gap is operational risk, and it's a liability for employers, insurers, property owners, and security providers.

Speaker #3: All of whom increasingly have to answer one question. What options are available, and what did we give these people before the situation became an emergency?

Speaker #3: Well, a tool the federal government just declassified is not a firearm and not a weapon. It sounds to be a pretty good option for that.

Speaker #3: There are over 1.2 million licensed security officers in the United States. That's a larger population than all of law enforcement. But the number isn't the point.

Jared Novick: That is a larger population than all of law enforcement. The number is not the point. The point is why it exists now. This is not Wrap marketing the same product to a new segment. The regulatory change altered the addressability of the product, and the service architecture I just described gives us a way to support those customers. Fourth, we are working on federal opportunities built on the same logic. We are putting resources in Washington, DC. The logic is early response and options in environments where use of force carries significant legal and, most important, public scrutiny. We are aligning ourselves where the money is. I want to be disciplined here. Prospective federal opportunities are not in our guidance, and I am not asking anyone to assign value to those contracts we have not won. It is not theoretical either. We have announced this.

Speaker #3: The point is why it exists now. This isn't WRAP marketing the same product to a new segment. The regulatory change altered the addressability of the product.

Speaker #3: And the service architecture I just described gives us a way to support those customers. Fourth, we're working on federal opportunities built on the same logic.

Speaker #3: We are putting resources in Washington, D.C. The logic is early response and options in environments where use of force carries significant legal and, most important, public scrutiny.

Speaker #3: And we're aligning ourselves where the money is. Now, I want to be disciplined here. Prospective federal opportunities are not in our guidance, and I'm not asking anyone to assign value to those contracts we haven't won.

Speaker #3: It isn't theoretical either. We've announced this. WRAP received a purchase order from the Department of Homeland Security, and in the second quarter, we delivered training to DHS.

Jared Novick: Wrap received a purchase order from the Department of Homeland Security, and in Q2, we delivered training to DHS, completing what we believe is an initial phase of support to their operational requirements. Timing matters here. Public safety funding is reopening. At the same time, federal and defense investment is accelerating around autonomous systems and counter-UAS in response to those technologies. It is a matter of time, but those threats that we see across the ocean and internationally are now here in the homeland, and we need to face that reality and start thinking about the integration of those technologies into public safety. Those sound like separate markets, but underneath them is the same problem we have been describing all call. The environments may differ but the core capability that addresses them does not. Fifth, this is lastly, where does this all go?

Speaker #3: Completing what we believe is an initial phase of support to their operational requirements. Timing matters here. Public safety funding is reopening. At the same time, federal and defense investment is accelerating around autonomous systems and counter-UAS, and the response of those technologies.

Speaker #3: It's a matter of time, but those threats that we see across the ocean and internationally are now here in the homeland, and we need to face that reality and start thinking about the integration of those technologies in public safety.

Speaker #3: Those sound like separate markets, but underneath them is the same problem we've been describing all call. The environments may differ, but the core capability that addresses them does not.

Speaker #3: And fifth, this is lastly: where does this all go? Everything today follows one line—a device that gives officers an earlier option, training that keeps our customers and keeps it usable, a commercial model that keeps customers engaged.

Jared Novick: Everything today follows one line, a device that gives the officer an earlier option, training that keeps our customers and keeps it usable, a commercial model that keeps customers engaged, and a regulatory change that opens our new, bigger markets. Each step makes the next one possible. Our strategy reflects the convergence of funding, regulation, technology, and customer need. I am going to make some points here. We are following the funding. Public safety funding is returning. Counter-UAS is moving from defense to Department of Homeland Security and public safety. Detection is the common requirement. Better sensing buys time, and time creates options. Our Frenel investment gives WRAP a truly differentiated position in this direction. The ATF classification expands our core addressable market. We are moving from products to readiness, and consequently, subscription.

Speaker #3: And a regulatory change that opens our new, bigger markets. Each step makes the next one possible. Our strategy reflects the convergence of funding, regulation, technology, and customer need.

Speaker #3: I'm going to make some points here. We are following the funding. Public safety funding is returning. Counter-UAS is moving from defense to homeland security and public safety.

Speaker #3: The detection is the common requirement. Better sensing buys time and time creates options. Our Fresnel investment gives WRAP a truly differentiated position in this direction.

Speaker #3: The ATF classification expands our core addressable market. We are moving from products to readiness, and consequently, to subscription. These markets are connected by one strategic thesis.

Jared Novick: These markets are connected by one strategic thesis: detect risk earlier, make better decisions, enable an earlier and more appropriate response. The technologies we build around that thesis have valuable adjacencies. It is not just about counter-UAS. Border security and maritime surveillance. We hear about autonomous platforms. We hear about ISR from the military, and potentially, our technologies have space-based applications. This is the logic behind WrapShield. We are not abandoning our core. We are taking the competency at the center of WRAP, earlier intervention, and extending it across a larger set of markets, customers, and funded opportunities. Scot, back to you.

Speaker #3: Detect risk earlier. Make better decisions. Enable an earlier and more appropriate response. And the technologies we build around that thesis have valuable adjacencies. It's not just about counter-UAS.

Speaker #3: Border security and maritime surveillance—we hear about autonomous platforms. We hear about ISR from the military, and potentially, our technologies have space-based applications. This is the logic behind WRAP Shield.

Speaker #3: We're not abandoning our core. We're taking the competency at the center of WRAP—earlier intervention—and extending it across a larger set of markets, customers, and funded opportunities.

Speaker #3: Scott, back to you.

Speaker #2: Thanks, Jared. Let me leave you with where I think all this goes. The market indicators are clear. The ATF determination cracked open a private market that's been untapped.

Scot Cohen: Thanks, Jared. Let me leave you with where I think all this goes. The market indicators are clear. The ATF determination cracked open a private market that has been untapped, and that market is driven by risk mitigation, which puts us directly inside the insurance conversation. Expect partnerships. Expect additional pipeline. With Frenel, we have already started building WrapShield into a platform that will eventually carry the full envelope of integrated solutions and establish a multi-channel revenue model underneath it. I can tell you we have already had much larger conversations with international customers and with our own government about how to move that vision forward. Frenel is an example of what happens when you get ahead of the game. We chose to build a solution to evolving threats instead of reacting after our competitors had secured their positions, and traction had followed.

Speaker #2: That market is driven by risk mitigation, which puts us directly inside the insurance conversation. Expect partnerships. Expect additional pipelines. With Fresnel, we've already started building WRAP Shield into a platform that will eventually carry the full envelope of integrated solutions and establish a multi-channel revenue model underneath it.

Speaker #2: I can tell you we can have much larger conversations with international customers and with our own government about how to move that vision forward.

Speaker #2: Fresnel is an example of what happens when you get ahead of the game. We chose to build a solution to evolving threats instead of reacting after our competitors had secured their positions.

Speaker #2: And traction had followed. This kind of foresight has to become a permanent part of how WRAP builds its business, and we intend to keep expanding it by continuously adding new solutions and new products.

Scot Cohen: This kind of foresight has to become a permanent part of how WRAP builds its business, and we intend to keep expanding it by continuously adding new solutions and new products. Some of these conversations we are handling directly with governments. Others will require partnerships and players deeply and already entrenched in the space. It has been 30 days, and we can already see where this is going. There is a category being created here, and no one else is building it. Others sell cameras, radios, electrical weapons. We are building a layer that sits between the tool and the moment of life that is at stake, backed by the training that makes it accountable and the sensing that makes it intelligent. This is the company we intend to be, and we intend to own that category. We do not take any of these advantages for granted.

Speaker #2: Some of these conversations we are handling directly with governments. Others will require partnerships and players already deeply entrenched in the space. It has been 30 days, and we can already see where this is going.

Speaker #2: There is a category being created here and no one else is building it. Others sell cameras, radios, electrical weapons. We are building a layer that sits between the tool and the moment of life that's at stake.

Speaker #2: Backed by the training that makes it accountable, and the sensing that makes it intelligent, this is the company we intend to be. And we intend to own that category.

Speaker #2: We do not take any of these advantages for granted. From this moment, we will move quickly on hires, partnerships, and on execution. Lou, I know we've got a bunch of questions in the hopper.

Scot Cohen: From this moment, we will move quickly on hires, partnerships, and on execution. Lou, I know we've got a bunch of questions in the hopper. I think it's time to get to our Q&A.

Speaker #2: I think it's time to get to our Q&A.

Speaker #1: Absolutely. If we don't get to all of our questions, everyone is welcome to email irwrap.com because we do have a lot here. And we are time constrained.

Lou Springer: Absolutely. If we don't get to all of our questions, everyone is welcome to email ir@wrap.com because we do have a lot here, and we are time-constrained. The first question came in from our investor relations inbox, and it says, "Where is the company at with Chile? What is the latest updates?

Louis Springer: Absolutely. If we don't get to all of our questions, everyone is welcome to email ir@wrap.com because we do have a lot here, and we are time-constrained. The first question came in from our investor relations inbox, and it says, "Where is the company at with Chile? What is the latest updates?

Speaker #1: So the first question came in from our investor relations inbox. And it says, where is the company at with CHILI? What is the latest update?

Speaker #3: Let me take that one. We actually met with our distributor just a couple of weeks ago. They came to visit us here in Miami.

Scot Cohen: Let me take that one. We actually met with our distributor just a couple of weeks ago. They came to visit us here in Miami. They're still expecting business this year, but they have cited a funding gap with the Chilean government. At this point, we're waiting for funding to become available. There is an opportunity that we're pursuing right now to see if our government will fund, which they have funded Chile's public safety business in the past, INL has, which we're actively exploring. But for now, we don't have any Chile business in our forecasted revenue for 2026. We're playing it safe with Chile. They've indicated, and they put large numbers in their budget for all of us to see. We've seen it. But we're not putting it in our forecast, and that's where we stand. We'll update as we get updates directly from the customer.

Speaker #3: They're still expecting business this year, but they have cited a funding gap with the CHILI and government. So at this point, we're waiting for funding to become available.

Speaker #3: There is an opportunity that we're pursuing right now to see if our government will fund, which they have funded Chile's police public safety business in the past—INL has.

Speaker #3: Which we're actually actively exploring. But for now, we don't have any CHILI business in our forecasted revenue for 2026, so we're playing it safe with CHILI.

Speaker #3: They've indicated and they put large numbers in their budget for all of us to see. We've seen it. But we're not putting it in our forecast.

Speaker #3: And that's where we stand. We'll update as we get updates directly from the customer. The next question.

Lou Springer: Okay.

Louis Springer: Okay.

Scot Cohen: Next question.

Speaker #1: The next question also came in through our investor relations inbox. What is the company's plans with insurance companies?

Lou Springer: The next question also came into our investor relations inbox. "What is the company's plans with insurance companies?

Louis Springer: The next question also came into our investor relations inbox. "What is the company's plans with insurance companies?

Speaker #3: Yeah, Scott, I can start that. Let's talk about this one together. Insurance companies are in our future. And it's because the ATF declassification changed our world.

Jared Novick: Yeah, Scot, I can start that. Let's talk about this one together. Insurance companies are in our future, and it is because the ATF declassification changed our world. We always thought about insurance companies in the past. We were kind of stymied by the classification of a firearm and a weapon. We knew insurance had plays somehow through risk pools that I think, Scot, you know more about than I do in the past, to law enforcement. But excitingly, the active conversations we have is now that we are no longer a firearm and no longer a weapon. We know insurance has to be part of our service as an integrated service to private companies or even security markets directly. The insurance company conversation that we have learned at some of these big box stores, retailers or critical infrastructure or healthcare or transportation, they surely use security guards, and they should.

Speaker #3: I mean, we always thought about insurance companies in the past. We were kind of stymied by the classification of a firearm and a weapon.

Speaker #3: We knew insurance had played somehow through risk pools that I think, Scott, you know more about than I do in the past, to law enforcement.

Speaker #3: But, excitingly, the active conversations we have is now that we're no longer a firearm and no longer a weapon, we know insurance has to be part of our service as an integrated service to private companies.

Speaker #3: Or even security markets directly. So, the insurance company conversation that we've learned at some of these big box stores, retailers, or critical infrastructure, or healthcare, or transportation—they surely use security guards.

Jared Novick: The insurance company conversation that we have learned at some of these big box stores, retailers or critical infrastructure or healthcare or transportation, they surely use security guards, and they should.

Speaker #3: And they should. But when we make a value proposition, the security guard companies say, "We do whatever our customer wants us to," which then means they point right back to the customer we're trying to support.

Jared Novick: But when we make a value proposition, the security guard companies say, "We do whatever our customer wants us to," which then means they point right back to the customer we are trying to support. When we go to that customer, we now can say, and the aim is, "Well, we have a device that is a rescue tool, no longer a firearm. Alongside our insurance, where we hope to be a provider for us, we can give you preferred terms." It is a value proposition. And what we can do as WRAP, as the orchestrator of all this, is coordinate across three parties, the insurance underwriter, the security guard, both armed or unarmed provider, and ultimately all of us focused on the customer. We think this is central. Insurance companies are central to our go-to-market to take a large bit of the private security space.

Speaker #3: So when we go to that customer, we now can say—and the aim is—well, you know, we have a device that's a rescue tool.

Speaker #3: No longer a firearm. Alongside our insurance—what we hope to be a provider for us—we can give you preferred terms. It's a value proposition.

Speaker #3: And what we can do as WRAP as the orchestrator of all this is coordinate across three parties. The insurance underwriter, the security guard, both armed or unarmed provider, and ultimately all of us focused on the customer.

Speaker #3: So we think this is central. Insurance companies are central to our go-to-market to take a large bit of the private security space.

Speaker #2: Let me add to that. So, on the public safety side, law enforcement side, I remember from almost day one, we had a meeting. It was right when we launched the company—we were in San Diego at an entrepreneur's home that was hosting us.

Scot Cohen: Let me add to that. On the public safety side, law enforcement side, I remember from almost day one, we had a meeting. It was right when we launched the company. We were in San Diego at an entrepreneur's home that was hosting us, and he started talking to us about insurance, saying, "Guys, the PDs are not your play. It is the insurance companies. You need to focus on the insurance companies." We all thought that was a good idea, but we had no real clear plan for it. And just thinking back over the years, there has been plenty, lots of insurance pools, insurance carriers, reinsurance companies approaching us for years. And in fact, two states where we have got backing from insurance companies, one was paying for 50% of the device, and the other was paying for 100% of the device.

Speaker #2: And he started talking to us about insurance, saying, "Guys, the PDs aren't your play. It is the insurance companies. You need to focus on the insurance companies."

Speaker #2: We all thought that was a good idea, but we had no really clear plan for it. And just thinking back over the years, there have been plenty of insurance pools, insurance carriers, and reinsurance companies approaching us for years.

Speaker #2: And in fact, two states where we've got backing from insurance companies were paying—one was paying for 50% of the device, and the other was paying for 100% of the device.

Speaker #2: This is seven, eight years ago. So early, early days. Now that we've developed the learning management system and we're launching that and we've got a training line that we're actually we're actually we're putting a lot of effort into and it's supporting the bull wrap.

Scot Cohen: This is seven, eight years ago, so early days. Now that we have developed the learning management system, and we are launching that, and we have got a training line that we are putting a lot of effort into, and it is supporting the BolaWrap. That training is now going to make this much more attractive to insurance companies. The training is focused on outcomes. The training is focused on sight, sound, and sensation, all three elements. It also now is in training, it is considering the human factors. What happens with officer judgment? How to improve your judgment, how to make decisions in time-set risk situations. How to use persuasion skills. All that is being trained now in a new partnership that we are into on the LMS, and you are going to hear more about it. That training line, that was not available to our customer base for years. It has only become available now.

Speaker #2: That training is now going to make this much more attractive to insurance companies. The training is focused on outcomes. The training is focused on sight, sound, and sensation.

Speaker #2: All three elements. It's also now in training. It's considering the human factors. What happens with officer judgment? How do you improve your judgment? How do you make decisions in risky and time-risk situations?

Speaker #2: How to use persuasion skills? All that's being trained now in a new partnership that we're that we're into on the LMS. And you're going to hear more about it.

Scot Cohen: How to use persuasion skills. All that is being trained now in a new partnership that we are into on the LMS, and you are going to hear more about it. That training line, that was not available to our customer base for years. It has only become available now.

Speaker #2: But that training line—we didn't have that. That was not available to our customer base for years; it's only become available now. I believe that's going to get the insurance business on the law enforcement side much more engaged, re-engaged in the very near future.

Scot Cohen: I believe that is going to get the insurance business on the law enforcement side much more engaged, re-engaged, in the very near future. This reclassification by the ATF, I think that is going to bode really well. We have had two conversations with large insurance companies, and they were really focused on that fact. So there is a lot more coming, and there is a lot more to unpack about the ATF and that determination. But I could tell you right now, the insurance companies, it was a wake-up to them, and it is good to be back in touch with them on the public safety side. But Jared was just giving you a recent conversation we are having on the private side, which we are very encouraged about.

Speaker #2: And this reclassification by the ATF, I think that's going to bode really well. We've had two conversations with large insurance companies and they were really focused on that fact.

Speaker #2: So there's a lot more coming, and there's a lot more to unpack about the ATF and that determination. But I can tell you right now, for the insurance companies, it was a wake-up for them.

Speaker #2: And it's good to be back in touch with them on the public safety side. But Jared was just giving you the recent conversation we're having on the private side, which are very encouraged to them.

Speaker #1: Great. The next question comes from our chat. What are the latest updates with WRAP Reality?

Lou Springer: Great. The next question comes from our chat. What are the latest updates with Wrap Reality?

Louis Springer: Great. The next question comes from our chat. What are the latest updates with Wrap Reality?

Jared Novick: I will take it.

Speaker #3: Oh, yeah. Yeah. Okay. Our virtual reality is great. I mean, when we go to our customers, they are continually impressed by the depth and breadth of what it offers.

Scot Cohen: Yeah.

Jared Novick: Okay. Our virtual reality is great. When we go to our customers, they are continually impressed about the depth and breadth of what it offers. Accordingly, we've resourced that product line appropriately. We've made significant updates in care and feeding and maintenance of the system. It's both hardware and software updates. It's a very compelling value proposition at the price point. It falls in line with de-escalation training, and it falls in line with our go-to-market of blended training, both digitally through the LMS, in person, and to follow up on readiness with virtual reality. New scenarios have been added, and honestly, we see the recent developments from Barnes v. Felix and the totality of circumstances ripe for application into virtual reality and how that's trained and delivered. Virtual reality is with us. It's core to us. It's not on the periphery. It's central.

Speaker #3: And accordingly, we've resourced that product line appropriately. We've made significant updates in care and feeding and maintenance of the system. It's both hardware and software updates.

Speaker #3: It's a very, very compelling value proposition at the price point. It falls in line with de-escalation training, and it falls in line with our go-to-market of blended training—both digitally through the LMS, in person, and to follow up on readiness with virtual reality.

Speaker #3: New scenarios have been added, and honestly, we see the recent developments from Barnes v. Felix and the totality of circumstances as ripe for application into virtual reality.

Speaker #3: And how that's trained and delivered. Virtual reality is with us. It's core to us—it's not on the periphery; it's central. And we're going to continue to deliver that and integrate it more closely as a cohesive product and service to departments.

Jared Novick: We can continue to deliver that and integrate it closer as a cohesive product and service to departments.

Speaker #1: Thank you. The next question comes from our investor relations inbox: Are you going to be raising money? If yes, what would it be for?

Lou Springer: Thank you. The next question comes from our investor relations inbox. Are you going to be raising money? If yes, what would it be for?

Louis Springer: Thank you. The next question comes from our investor relations inbox. Are you going to be raising money? If yes, what would it be for?

Speaker #3: I'll take that one.

Scot Cohen: I'll take that one. As in the past, we regularly explore financing options that we believe are beneficial to all shareholders. As we look forward, we continue to be thoughtful and disciplined about how we capitalize this business. As everybody knows, I'm a significant shareholder in this company, so dilution affects me alongside of every other shareholder. I am highly sensitive to it. Any capital decision we make needs to be weighed against the value we believe the capital can create.

Speaker #2: As in the past, we regularly explore financing options that we believe are beneficial to all shareholders. As we look forward, we continue to be thoughtful and disciplined about how we capitalize this business.

Speaker #2: As everybody knows, I'm a significant shareholder in this company. So dilution affects me alongside of every other shareholder. I am highly sensitive to it.

Speaker #2: Any capital decision we make needs to be weighed against the value believed that capital can create.

Speaker #1: Thank you. The next question comes from our chat. Are you pursuing anything with border or DHS?

Lou Springer: Thank you. This next question comes from our chat. Are you pursuing anything with Border or DHS?

Louis Springer: Thank you. This next question comes from our chat. Are you pursuing anything with Border or DHS?

Speaker #3: Well, border and DHS. Kind of two things to me. I mean, well, look, we are pursuing things with both border and DHS. The answer to that is yes.

Jared Novick: Well, Border and DHS are kind of two things to me. Well, look, we are pursuing things with both Border and DHS. The answer to that is yes. The way we look at that is DHS is very broad in the duties that they have to our country. It is both in carrying out an important law enforcement function, and also concerned on the borders of our country, clearly. And our role in that applies. When it comes to federal law enforcement, again, referenced in our earnings script, we had a purchase order from DHS. We delivered training, which means we have to know how to integrate into their operations and be clear about our value that we deliver. When it comes to Border, this is where WrapShield becomes increasingly important. Drones are a problem.

Speaker #3: So the way we look at that is, DHS is very broad in the duties that they have to our country. It's both in carrying out an important law enforcement function and also concerned on the borders of our country, clearly.

Speaker #3: And our role in that applies. When it comes to federal law enforcement—again, referenced in our earnings script—we had a purchase order from DHS.

Speaker #3: We delivered training, which means we have to know how to integrate into their operations and be clear about the value that we deliver. But when it comes to border, this is where WRAP Shield becomes increasingly important.

Speaker #3: Drones are a problem. Bad guys with drones are a problem. And you need to detect them as early as possible. And yes, the government and DHS have a lot to do with the detection of drones.

Jared Novick: Bad guys with drones are a problem, and you need to detect them as early as possible. Yes, the government and DHS has a lot to do with the detection of drones, but there are blind spots. These RF silent drones present a unique problem, which means you have to go to some other type of phenomenology or physics to get into that. Part of the allure and then motivation and subsequent investment into Frenel is that it is a differentiated way in its application for early detection of some of our nation's most emerging threats. Our conversation in DHS is largely on different fronts. First is supporting via BolaWrap and everything we went through today for law enforcement, and then delivering and being part of an integrated system which starts with detection, and Frenel is a way to do that.

Speaker #3: But there are blind spots. These RF silent drones present a unique problem. Which means you got to go to some other type of phenomenology or physics to kind of get into that.

Speaker #3: And so part of the allure and the motivation and subsequent investment into Fresnel is that it's a differentiated way—and its application—for early detection of some of our nation’s most emerging threats.

Speaker #3: So our conversation in DHS is largely on different fronts. First is supporting via BOLA WRAP and everything we went through today. For law enforcement.

Speaker #3: And then delivering and being part of an integrated system, which starts with detection. And Fresnel is a way to do that. But I know, Scott, when you think 'border,' you think of more than just the US border.

Jared Novick: But I know, Scot, when you think Border, you think of more than just the US border.

Scot Cohen: Look, everybody knows a large part of our revenues come from overseas, and when we're overseas, we're typically talking about national police forces. In those conversations, it's very common to have an interior minister present or involved in the decision-making, particularly when you're talking about a countrywide deployment with the national police force standardizing on some of this equipment. The same people that we're meeting on the BolaWrap programs, when we're talking about training, when we're talking about our cameras, and speaking about VR too, are the same customers we find ourselves in a Frenel threat detection. They are worried just like ours about their borders, and they're spending quite a bit of money to protect the borders just like we are.

Speaker #2: Everybody knows a large part of our revenues come from overseas. And when we're overseas, we're typically talking about national police forces.

Speaker #2: In those conversations, it's very common to have an interior minister present or involved in the decision making. Particularly when you're talking about a country-wide deployment.

Speaker #2: With the national police force standardizing on some of this equipment, the same people that we're meeting on the BolaWrap programs when we're talking about training, when we're talking about cameras and speaking about VR too, are the same customers we find ourselves in with Fresnel threat detection.

Speaker #2: They are worried, just like ours, about their borders. And they're spending quite a bit of money to protect the borders, just like we are.

Speaker #2: So the same events that are happening here are happening all over our country's allied countries, and we're finding ourselves very easily in that conversation.

Scot Cohen: The same events that are happening here are happening all over our countries, allied countries of ours, and we're finding ourselves very easily in that conversation, and we're in a position to compete for that business. That's exactly what we're going to do because Frenel has such a unique advantage. It's different than anything that's been out there. Nothing's been presented like this, and it's a really simple demonstration. You show the threats with our technology, and then you look at the most modern advanced thermal detectors with RF detection and maybe some other capability, and you just simply can't see the threats the same way as we're able to image it. It feels really good to go into accounts that we've been in for years and been in different places in the sales cycle.

Speaker #2: And we're in a position to compete for that business. And that's exactly what we're going to do. Because Fresnel has such a unique advantage.

Speaker #2: It's different than anything that's been out there. Nothing's been presented like this, and it's a really simple demonstration. You show the threats with our technology.

Speaker #2: And then you look at the most modern, advanced thermal detectors with RF detection and maybe some other capability, and you just simply can't see the threats the same way as we're able to image it.

Speaker #2: So it feels really good to go into accounts that we've been in for years and different sales and different places in the sales cycle.

Speaker #2: Some we've already sold to, and they're repeat customers, growing their business, growing their programs. And some we're still trying to crack. But very easily, almost effortlessly, we find ourselves in a threat detection discussion about Fresnel, and the question—it's really not a sales pitch.

Scot Cohen: Some we've already sold to, and they're repeat customers growing their business, growing their programs, and some we're still trying to crack. But very easily, almost effortlessly, we find ourselves in a threat detection discussion about Frenel. It's really not a sales pitch, it's, "When can we see this? And what's the supply chain look like?" That becomes the question. I've had it enough where we're not going to be having a sales issue. We're going to have a delivery issue. This technology speaks for itself, and the problem it solves is very obvious. That's what I've got to say on Border.

Speaker #2: It's when can we see this, and how many, which the supply chain looks like. That becomes the question. And I've had enough where we don't—we're not going to be having a sales issue.

Speaker #2: We're going to have a delivery issue. Technology speaks for itself, and the problem it solves is very obvious. That's what I've got to say on border.

Speaker #2: And just a lot of the clients that were already dealing many of them so far at least, it's only been a month or so and change, but trust me, we're out talking to our most closest relationships and the reaction is when can we get a demonstration?

Scot Cohen: Just a lot of the clients that we're already dealing, many of them, so far at least, it's only been a month or so and change, but trust me, we're out talking to our most closest relationships, and the reaction is, "When can we get a demonstration?" We're going to be busy in the next 12 months. We're going to be very busy.

Speaker #2: So we're going to be busy in the next 12 months. We're going to be very busy.

Speaker #1: Thank you. All right, the next question came in through our Investor Relations inbox. You've mentioned that DC is a big part of your strategy.

Lou Springer: Thank you. All right, the next question came in through our investor relations inbox. You have mentioned that DC is a big part of your strategy. What are you doing there?

Louis Springer: Thank you. All right, the next question came in through our investor relations inbox. You have mentioned that DC is a big part of your strategy. What are you doing there?

Speaker #1: What are you doing there?

Speaker #3: I'll take an example. I'll take this first thing. Look, I have my roots in D.C. in many ways. And to me, the first question says, what's your federal strategy?

Jared Novick: I will take this first. Look, I have my roots in DC in many ways, and to me, the first question that says, "What is your federal strategy?" We are going to follow the money. You have got to go where the money is, which means the government knows they have a problem. When they have a problem, they put down a requirement. When they write down the requirement, they allocate budget against it. So the DC being part of our strategy can be as simple as that for now, which is requirements, funding, and then our job is to marry our emerging capabilities, the solutions we have presented, both from BolaWrap 150 to WrapShield, and map our capability to funding that is already been identified. You cannot blood from a turnip, is what they say, right? So you have got to go where the money is.

Speaker #3: The thing that we're going to follow the money. You got to go where the money is. Which means the government knows they have a problem when they have a problem, they put down a requirement.

Speaker #3: When they write down the requirement, they allocate budget against it. So the DC being part of our strategy can be as simple as that for now, which is requirements funding and then our job is to marry our emerging capabilities, the solutions we've presented both from BOLA WRAP 150 to WRAP Shield and map our capability to funding that's already been identified.

Speaker #3: You can't get blood from a turnip, is what they say, right? So you've got to go where the money is. And so that means, federally in DC, there are a couple of different categories.

Jared Novick: That means federally in DC, there are a couple different categories. First, there is DHS and others, and we have capabilities that marry to those requirements, and we know there is money there, so we put effort against that. Then there is the Department of Defense, when we talk about early threat detection with now through Frenel, early threat detection with Frenel. So our DC strategy is to align our capabilities to where there is funding and requirements, and then to put the people in our company who can work those channels appropriately to make that marriage.

Speaker #3: First, there's DHS and others. And we have capabilities that are married to those requirements. And we know there is money there, so we put effort against that.

Speaker #3: Then there's the Department of War. When we talk about early threat detection, with now through Fresnel, early threat detection with Fresnel. So our DC strategy is to align our capabilities to where there is funding and requirements and then to put the people in our company who can work those channels appropriately to make that marriage.

Speaker #4: I'm going to just add to this. It's actually reminds me of the first business that I started 25 years ago. With a couple of partners.

Scot Cohen: I am going to just add to this.

Jared Novick: Yeah.

Scot Cohen: It actually reminds me of the first business that I started 25 years ago with a couple partners. We were literally matching money to companies that needed it. There were funds that literally had a specific investment profile that they were looking for. We knew the companies that had gaps in their balance sheet that needed to be filled. We were connecting buyers to sellers. It is not that difficult. What I really like about what Jared Novick was just saying, what I am realizing, we started this company. We had to create our own requirement. There was no requirement out for what we have created, a remote restraint device, a device that uses no pain to bring a subject into compliance, a device that use sight and sound in restraint. There was none.

Speaker #4: We were literally matching money to companies that needed it. There were funds that literally had a specific investment profile that they were looking for.

Speaker #4: And we knew the companies that had gaps in their balance sheet that needed to be filled. We're connecting buyers to sellers. It's not that difficult.

Speaker #4: And what I really like about what Jared was just saying, and what I'm realizing, is that when we started this company, we had to create our own requirements.

Speaker #4: There was no requirement out for what we've created: a remote restraint device. A device that uses no pain to bring anyone into subject and compliance.

Speaker #4: A device that uses sight and sound in restraint.

Jared Novick: That got sidetracked as a firearm.

Speaker #3: That got sidetracked as a firearm.

Scot Cohen: It got sidetracked as a firearm. There you go.

Speaker #4: And it got sidetracked as a firearm. There you go. So you know how hard that push was? I didn't. If I knew what I knew, probably never would have launched it.

Jared Novick: Yeah.

Scot Cohen: You know how hard that push was? I did not.

Jared Novick: Yeah.

Scot Cohen: If I knew what I knew, probably never would've launched it.

Jared Novick: Yeah.

Speaker #4: It was way harder. There were no requirements for this, so we had to do what we did. We talked to no insurance companies. We bring in prototypes.

Scot Cohen: It was way harder. There were no requirements for this.

Jared Novick: Yeah.

Scot Cohen: We had to do what we did. We are talking to insurance companies, we are bringing prototypes, we are doing the dog and pony show. Look how great this is. Look, we have revised this, we have optimized this. The device has gotten a lot better, and it works so much better than in the past. We are having consistent outcomes with it. We are training it in a much more connected way. And finally, we have a way to answer the training issue, which is how do you scale training? Well, we are just about to launch that and show our customers how you scale training. What I love about this, where we are going to, the requirements are there federally already. They are there. They are in place. And part of our Hill strategy is we are identifying the money and we are going right for it. We are going where the money is.

Speaker #4: We're doing the dog and pony show. Look how great this is. Look, we revised this. We've optimized this. The device has gotten a lot better.

Speaker #4: And it works so much better than in the past. We're having consistent outcomes with it. We're training it in a much more connected way.

Speaker #4: And finally, we have a way to answer the training issue, which is: how do you scale training? Well, we’re just about to launch that and show our customers how you scale training.

Speaker #4: So what I love about this where we're going to the requirements are there federally already. They're there. They're in place. And so part of our hill strategy is we're identifying the money and we're going right for it.

Scot Cohen: What I love about this, where we are going to, the requirements are there federally already. They are there. They are in place. And part of our Hill strategy is we are identifying the money and we are going right for it. We are going where the money is. It is really simple, and that is a big part of our DC strategy. Yes, there are bills we are going to introduce, and yes, there is legislation and policies that we want to bring forward, all of that. Yes. But right now, there is plenty of money that is already available, that is stated requirements, and we are going for that money. We are going to connect those dots.

Speaker #4: We're going where the money is. It's really simple. And that's a big part of our DC strategy. Yes, there's bills we're going to do.

Scot Cohen: It is really simple, and that is a big part of our DC strategy. Yes, there are bills we are going to introduce, and yes, there is legislation and policies that we want to bring forward, all of that. Yes. But right now, there is plenty of money that is already available, that is stated requirements, and we are going for that money. We are going to connect those dots.

Speaker #4: And yes, there's legislation and policies that we want to bring forward—all of that, yes, yes, yes. But right now, there's plenty of money that's already available that's stated requirements, and we're going for that money.

Speaker #4: We're going to connect those dots.

Speaker #1: Thank you. The next question came into our investor relations inbox. You're targeting 100% growth year-over-year. Is there anything that you feel didn't materialize that caused you to miss the target?

Jared Novick: Thank you.

Louis Springer: Thank you. The next question came into our investor relations inbox. You are targeting 100% growth year-over-year. Is there anything that you feel that didn't materialize that caused it to miss the target?

Lou Springer: The next question came into our investor relations inbox. You are targeting 100% growth year-over-year. Is there anything that you feel that didn't materialize that caused it to miss the target?

Speaker #4: Let me take it. Our prior guidance on our projected revenue growth was a good faith estimate at the time. And we do not have any information today that would cause us to update it.

Scot Cohen: Let me take it. Our prior guidance on our projected revenue growth was a good faith estimate at the time, and we do not have any information today that would cause us to update it. At this time, we recognize the nature of our business. One or two meaningful orders, particularly the timing of those orders, can obviously have a significant impact on where we ultimately finish the year. We are not backing away from any opportunities that we are pursuing right now. We are not changing our expectations today. We also want to be transparent with our shareholders that as the year progresses and we gain greater visibility into the timing of those opportunities, the target could move either up or down, and I just want to be super clear on that.

Speaker #4: So at this time, we recognize the nature of our business. One or two meaningful orders, particularly the timing of those orders can obviously have a significant impact on where we ultimately finish the year.

Speaker #4: We're not backing away from any opportunities that we're pursuing right now, and we're not changing our expectations today. We also want to be transparent with our shareholders that, as the year progresses and we gain greater visibility into the timing of those opportunities, the target could move either up or down.

Speaker #4: And I just want to be super clear on that.

Speaker #1: Got it. Thank you. The next question came in through our chat. Does the ATF desk declassification apply to any other product lines besides BOLA WRAP?

Jared Novick: Got it. Thank you.

Louis Springer: Got it. Thank you. The next question came in through our chat. Does the ATF declassification apply to any other product lines besides BolaWrap?

Lou Springer: The next question came in through our chat. Does the ATF declassification apply to any other product lines besides BolaWrap?

Speaker #3: Yeah, the short answer is no. It just applies to BOLAWRAP 150. Look, it was a great effort by our company to work in concert with everyone, and we like that ruling clearly on the BOLAWRAP 150.

Jared Novick: Yeah. The short answer is no, it just applies to BolaWrap 150. Look, it was a great effort by our company to work in concert with everyone, and we like that ruling clearly on the BolaWrap 150. When we look at our entire product suite, and with the recent announcement of Wraptor MX, our company will again work closely with the ATF, and we are hopeful. But to answer it directly, ATF declassification only applies to BolaWrap 150 at this time.

Speaker #3: Now, when we look at our entire product suite, and with the recent announcement of Raptor MX, our company will again work closely with the ATF.

Speaker #3: And we're hopeful. But to answer it directly, ATF declassification only applies to BOLA WRAP 150 at this time.

Speaker #1: Got it. All right. This question came in through our investor relations inbox. Can you walk us through management history and relationship with Fresnel before WRAP made its investment into the company?

Lou Springer: Got it. All right. This question came in through our investor relations inbox. Can you walk us through management's history and relationship with Frenel before Wrap made its investment into the company, and when those relationships began and how the opportunity came about?

Louis Springer: Got it. All right. This question came in through our investor relations inbox. Can you walk us through management's history and relationship with Frenel before Wrap made its investment into the company, and when those relationships began and how the opportunity came about?

Speaker #1: And when those relationships began and how the opportunity came about?

Speaker #4: Sure. The opportunity was actually been on our radar for years. We first became aware of it through one of our largest customers. But about six months ago, when we saw the technology operationalize, our perspective changed significantly.

Scot Cohen: Sure. The opportunity has actually been on our radar for years. We first became aware of it through one of our largest customers. But about 6 months ago, when we saw the technology operationalized, our perspective changed significantly. At that point, we brought the opportunity to the board, and I think it is important to understand the level of experience around that table. We have a retired Navy admiral with direct experience in this area of warfare who has evaluated technologies like these professionally almost his whole career. We have a private equity manager with decades of invest experience managing over USD 1 billion. And we have significant operational technical expertise on this board. So this was not a casual decision. The board conducted a robust evaluation of the technology, the market opportunity, and it is a strategic fit where WRAP is going, and they green-lighted it, period. That is what happened.

Speaker #4: At that point, we brought the opportunity to the board. And I think it's important to understand the level of experience around that table. We have a retired Navy admiral with direct experience in this area of warfare, who's evaluated technologies like these professionally almost his whole career.

Speaker #4: We have a private equity manager with decades of investor experience managing over a billion dollars. And we have significant operational technical expertise on this board.

Speaker #4: So this was not a casual decision. The board conducted a robust evaluation of the technology, the market opportunity, and it is a strategic fit where WRAP is going.

Scot Cohen: So this was not a casual decision. The board conducted a robust evaluation of the technology, the market opportunity, and it is a strategic fit where WRAP is going, and they green-lighted it, period. That is what happened. We saw something operationally that changed our perspective. We put it in front of people with the experience to challenge the thesis. They did the work. We made the decision to move forward.

Speaker #4: And they greenlighted it, period. That's what happened. We saw something operationally that changed our perspective. We put it in front of people with the experience, the challenge of thesis, they did the work, we made the decision to move forward.

Scot Cohen: We saw something operationally that changed our perspective. We put it in front of people with the experience to challenge the thesis. They did the work. We made the decision to move forward.

Speaker #1: How are we doing on time, Scott?

Lou Springer: How are we doing on time, Scot?

Louis Springer: How are we doing on time, Scot?

Speaker #2: You know, Lou, we've got to wrap things up. So, if you don't mind, let's just do one more and we'll call it a day.

Scot Cohen: You know, Lou, we have got to wrap things up, so if you do not mind, let us just do one more, and we will call it a day.

Speaker #1: You got it. The last question came in through our investor relations inbox. If revenue does approximately double this year, what happens to cash consumption?

Lou Springer: You got it. The last question came into our investor relations inbox. If revenue does approximately double this year, what happens to cash consumption? At what level does the existing business become sustainably cash flow breakeven without relying on additional equity?

Louis Springer: You got it. The last question came into our investor relations inbox. If revenue does approximately double this year, what happens to cash consumption? At what level does the existing business become sustainably cash flow breakeven without relying on additional equity?

Speaker #1: And then at what level does the existing business become sustainably cash flow break even without relying on additional equity?

Speaker #4: We're not changing our spending profile today. We're currently operating around a $3 3 million break even. And we don't anticipate any dramatic increase in spending in the near term.

Scot Cohen: We are not changing our spending profile today. We are currently operating around a $3 million breakeven, and we do not anticipate any dramatic increase in spending in the near term. That said, based on everything that we are seeing in front of us today, there is absolutely a scenario where we might accelerate it. Frankly, our bias right now is towards acceleration because of the opportunities we are actually seeing. We are going to let the market and the opportunities earn that investment. If we begin to see the traction develop the way we believe it can, we will be prepared to increase our investment to capture it. We will be prepared to access the capital markets to support that growth. The message is no significant change in spending today. Based on what we are seeing, we could become much more aggressive.

Speaker #4: That said, based on everything that we're seeing in front of us today, there is absolutely a scenario where we might accelerate it. And, frankly, our bias right now is toward acceleration because of the opportunities we're actually seeing.

Speaker #4: But we're going to let the market and the opportunities earn that investment. If we begin to see the traction develop the way we believe it can, we will be prepared to increase our investment to capture it.

Speaker #4: And we will be prepared to access the capital markets to support that growth. So the message is no significant change in spending today. But based on what we're seeing, we could become much more aggressive.

Speaker #4: As such, it is not possible to accurately predict the amount of revenue we'll need to become profitable.

Scot Cohen: As such, it is not possible to accurately predict the amount of revenue we will need to become profit.

Speaker #1: Thank you. That concludes our question and answer portion. I know we didn't have time to get to all of the questions, so if you have more, please send them in to ir@wrap.com, and we will get back to you.

Lou Springer: Thank you. That concludes our question and answer portion. I know we did not have time to get to all of the questions, so if you have more, please send them in to ir@wrap.com and we will get back to you. On behalf of Scot, Jared, and the entire Wrap team, thank you for your engagement and support. We look forward to updating you on our progress. This concludes Wrap Technologies's Q2 2026 earnings conference call. Thank you.

Louis Springer: Thank you. That concludes our question and answer portion. I know we did not have time to get to all of the questions, so if you have more, please send them in to ir@wrap.com and we will get back to you. On behalf of Scot, Jared, and the entire Wrap team, thank you for your engagement and support. We look forward to updating you on our progress. This concludes Wrap Technologies's Q2 2026 earnings conference call. Thank you.

Speaker #1: On behalf of Scott, Jared, and the entire WRAP team, thank you for your engagement and support. We look forward to updating you on our progress.

Speaker #1: This concludes WRAP Technologies' second quarter 2026 earnings conference call. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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