Wrap Technologies, Inc.

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, Louis Springer.

Thank you. Good afternoon and welcome to RAP Technology's second quarter 2026 earnings conference call. I'm Louis Springer, Vice President of Finance. Joining me today is Scott Cohen, Chief Executive Officer, and Jared Novick, President and Chief Operating Officer. We appreciate your time and continued interest in RAP. 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. 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. 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. 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 second quarter ended June 30, 2026, the second quarter ended June 30, 2025. The earnings release will be available on the financial information section of our website at ir.rap.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 Scott.

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. Operations continue to become more efficient. We're expanding sales. We productize our training. We're growing our bull wrap programs and we have doubled our product offerings Today, 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, 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 RAP 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. But 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 bull wrap 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. 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. Polar App now has a solution these professionals can actually carry and our LMS allows us to deliver consistent and many more. 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 giving 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 bull wrap, can fund our body cameras, that are funding de-escalation training and virtual training. 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. And the third development is the Fresnel opportunity. We've been watching this technology for years, and I'll 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 couldn't 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. Fresnel's could see what other systems could not. This technology has are critical applications for our cities, our borders, and our national defense. More importantly, it gives RAC a structural advantage that competitors simply cannot copy, replicate, or acquire. RAC now holds an exclusive U.S. and NATO right to Tricor by Fresnel, a physics-based polymetric sensing technology that 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 RAP and for all of us. With that, Lou, it's back to you.