Wrap Technologies, Inc.

Good morning, everyone. Thank you for joining RAP's Q1 2025 call. In attendance this morning is Scott Cohen, Chief Executive Officer, and Jared Novick, President and Chief Operating Officer. At this time, 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 federal securities regulations. 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 data of this call. and the company is not obligated to publicly update or revise them. Statements are made during this call do not constitute an offer to sell or solicitation of any offer to buy any securities. Securities will not be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. Unless otherwise stated, all reported results discussed in this call compare the first quarter 2025 earnings. RAPS Q1 2025 financial results are as follows. Cash increased to $6.2 million up from $3.6 million in Q1 2024. Margins increased over 21 points from 56.6% in Q1 2024 to 77.8% in Q1 2025, with cost of revenues decreasing 73.4% from 640,000 to 170,000 respectively. Operating loss improved 5.2% from negative 4.1 million in Q1 2024 to negative 3.9 million in Q1 2025. Q1 2025 revenue was $765,000. Net income was $109,000 in Q1 2025 as compared to $117,000 in Q1 2024. I will now hand it over to Scott.

Thanks, Lou. Good morning, everybody. I'm going to unpack some of the progress from the first quarter along with some recent insights. We are in the earliest stages of building out our business, along with leading a very important discussion around use of force. In this country, 20,000 people a day are arrested, and 20% of the time, they resist. That's 4,000 people a day resist arrest. And 90% of the time, it goes hands-on. Why? because they're unarmed, they're not an immediate threat, or they're having a mental episode. And 10 years ago, it was very different. Body cams weren't on the scene. Policies haven't shifted the way they're shifting now. And as a result of these policies dramatically shifting, you're seeing big behavior change in the show of force and the use of force around guns, batons, pepper sprays, and tasers. 50% of the time officers go hands-on, they're getting hurt. And it's causing very large bills to society. Injury, workers' comp, and lawsuits are costing this country billions of dollars a year. And up until now, there's been no solve for this problem. After six months of deep conversations with customers, departments, politicians, and various individuals to get data from our program, we finally have enough where I'm going to present some facts that to me have been the driving force of what we're doing here. And to me, the opportunity is to support what we're already seeing, and I think we've got a path to do that. But we're tracking, oh, I'm tracking over a dozen departments that are using the bull wrap two to three, even five times more than anything on the belt today. And this is without solid support from our company. And we know this was a new business. It was a startup six years ago. It's a new device. I get it. Lots of turnover, lots of change. That's fine. But now we are absolutely clear. The data is in. The programs are thriving when we're connected, and we're going to lean into that and support them in ways that just haven't been supported in the past. This new training we're about to introduce should accelerate deployment, making our BOLORAT programs an obvious choice any time an officer's going hands-on, which is 4,000 times a day in this country. We're proving that BOLRAP makes an officer safer. What's driving all this is data, finally. It's not easy to get this data. We've been at this seven years. We thought the first 10 body cams, this was six years ago, we thought just 10 body cams would put us on the map and everybody, the rest of the country would follow suit. And the number went up to 100. And then it went dark. Why? come to find out use of force is a sensitive topic. Even the FBI struggles with collecting it. They say 60% of departments around the country report on it. But what makes it even tougher is 50% of the time our customers, 50% of the customers, our customers that have bull wraps don't even view it as a reportable use of force. So if they're not reporting it to their constituents, How are we supposed to know? And so it was getting connected with these customers in very difficult and sensitive conversations. Remember, these uses of force are active investigations or evidence. And if you say the wrong thing or somebody gets a hold of data, this could be reported up and all of a sudden you could have a federal monitor on you and consent decrees kick in and then you've lost control of your agency. So no Chief wants this to happen. This is a big fear. But now it's time to step into the light and execute. We're seeing the data. We're pressing policy at the state and federal levels, partnerships with communities and advocacy groups. We built out sales and marketing infrastructure in anticipation for a a real sweep in this country to get this product out there because we see it's working and it's working in dozens of accounts to levels that were a big surprise for us. And we know that that's just a starting point and that's going to accelerate. When that does, it's going to make this device clearly the most actively used device on the belt today. And we're already seeing it in a dozen or so accounts that we've been able to have contact with And it's not just by a little bit, it's by a lot. And the light needs to be shined on this for everybody to see because it's not going to go unnoticed. This is a very sensitive topic. We've got to solve for something that's causing this country a lot of pain and a lot of money. We have the only hands-on tool in the marketplace with more usage than any other tool on the belt with connected customers. You made the right bet with this device and with the recent field data received, we are clear this device will be a standard piece of equipment on every officer's belt. The data is coming from the customers. The data is telling us everything we need to know. We're going to lean into it. We're going to make sure that This data is clear. We're going to continue to get more data. And we believe now that we have the right people and the right strategy to make these BOLRAP programs thrive throughout the country and throughout the world. And yes, all the things that we talked about and introduced on our end-to-end solution, that's all coming. But first, we need to support the BOLRAP because it's working. It's working better than anybody knows, including us. And this is great news. It's inspiring. And it's going to drive us to build out this business and create real value for our shareholders. And I think put a place in public safety, make a real place in public safety for the bull wrap. So with that, thank you all for joining. We're going to take it into Q&A. Jared's going to join me for this. So Lou, I know we cast it out for questions and I believe you have a eight or nine of them to hit us with.

Yes. Okay, here's the first question. What is RAP doing to drive more sales and increased product awareness?