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Good morning, everyone. Thank you for joining Wrap’s Q1 2025 Call. In attendance this morning is Scot 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 date 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 – now 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. Wrap’s 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 Scot.

Thanks, Lou [ph]. Good morning, everybody. I’m going to unpack some of the progress in 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 has 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 now 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 – I’m tracking over a dozen departments that are using the BolaWrap 2 to 3 to even 5 times more than anything on the belt today and this without solid support from our company. And we know this was a 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 they just haven’t been supported in the past. This new training we’re about to introduce should accelerate deployment, making our BolaWrap programs an obvious choice any time an officer is going hands on, which is 4,000 times a day in this country. We’re proving that BolaWrap 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. Then the number went up to 100, and then it went dark. Why? I’m going 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 customers, our customers that have BolaWraps 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 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 can – 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 are going to lean into it, we are going to make sure that this data is clear, we are going to continue to get more data, and we believe now that we have the right people and the right strategy to make these BolaWrap 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 BolaWrap 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 BolaWrap. So with that, thank you all for joining. We’re going to take it into Q&A. Jared is going to join me for this. So Lou, I know we’ve cast it out for questions, and I believe you have eight or nine of them to hit us with.

Yes. Okay. Here is the first question. What is Wrap doing to drive more sales and increased product awareness?

Well, I’ll start with this one. I find it to be pretty amazing that we’ve sold close to – over $30 million of the product without real data. The data was really hard to get, but we sold that based on what this product could do and what we thought it could do. But now we actually have the data to prove it, which is new. So we’re collecting that and already the conversations that we’ve had with some major cities, some actually some departments that canned the program, major cities that canned the program. In just recent conversation with them on this newly acquired information and data, already they’re looking to restart these programs. So, I believe data is going to drive everything. So, let’s just start with the data is going to get packaged in a way for everybody to see what we’re seeing, it will make it obvious that BolaWrap lowers use of force, bills both on workers’ comp, officer injury, subject injury and lawsuits. And it’s crystal clear with dozens of accounts, and there is no reason why that shouldn’t be widespread throughout this country. There is nothing those accounts are doing that differently that these other accounts can’t adapt to. And when we tell the – when I’ve been fortunate enough to get in front of some major cities in the last month or so, and the conversation is the same. Back it up and let’s get back into a conversation because we missed it. So look, for us, we’ve tightened up. Now we’ve gone to a – we’re building up our sales and marketing infrastructure. I said that on the phone. I just said this on the call. And you’re going to see a big focus now starting with – on sales and marketing because finally, we’ve got the data, which is our narrative. Data is going to drive decisions going forward. It’s something that politicians will understand, city leaders will understand and departments will understand. Jared, do you want to add to that?

[Indiscernible]

It is important. Good morning, everybody. Jared Novick. Look, we’re not in the business of selling snake oil, that’s how a lot of these conversations start when I talk about it. We have responsibility to shareholders and to our communities. And what we start with is, when we have these conversations is what’s the story, is it working. And when I talk to departments from Colorado to Texas to California, New Jersey, towns in Virginia, when you really talk to them, they themselves are surprised that it is working more and more frequently than they’re even reporting or writing down. That’s the hard work we’ve done. To make a compelling sales pitch, it has to be validated and we have validated through trusted conversations because as Scot has mentioned, that data is hard to get. The data doesn’t self-report. Should it report in the future, absolutely, that’s in the R&D effort. That’s in our product road map. But right now, we have what we have, which are trusted conversations. So before we go out there and repeat the same mistakes this company has had, unfortunately, over the last several years, is to have a real conversation with real data. Now that we have that, in a validated value proposition with the product and the technology that we have to support it, we’re ready to put that collateral and scale it broadly. The first step is to have the right message. The second one, for us, is not to sell things onesie-twosie or in an inefficient and costly way, we have to find an efficient, scalable way to sell, sell domestically and sell internationally. So, what we focused is we need a scalable and repeatable sales motion. That’s where we focused our efforts in Q1. I think have in our recent earnings report that we’ve signed something significant that we’re looking forward to announcing and that way, we can address things broadly. So, I feel very good about a validated message, about a validated product and trust that we are reestablishing because our brand matters and it means something. So that is a coordinated sales, marketing and product message. Our priority is go-to-market. It’s time, and as Scot is saying, the time is now.

Great. On to question two. Are there any plans to shift sales efforts towards political leadership rather than police directly?

Lou, if you don’t mind, I’ll jump on that one real quickly. I’m actually calling from Washington, D.C. today. The answer is yes, and absolutely. A lot of these things you hear is about the use of force and use of force continuum. We’re on a national use of force conversation. And so we all know, if we look at that, there are things from verbal to hands on all the way up to lethal. And what we’re finding ourselves is at a much larger and broader conversation than just our individual product. We are finding ourselves in conversations about consent decrees, which is an interesting topic and a national conversation, quite frankly, that I think, will actually start servicing. It’s my instinct that this will happen in short order. What are major cities? What are we doing in America when it comes to addressing the critical needs that we see growing out in our communities? So, we find ourselves not just with Chiefs of Police, they matter, they are a key stakeholder, but we are also working at a federal level, at a political level because it takes a team, a coordinated effort with the right leaders, both domestically, we’re even able to, with our international interest, facilitate rooms with international policing as well. This is a global issue, and I know everyone feels that, they see the potential, this is a huge opportunity, it’s on our responsibilities collectively to lead that conversation. So our sales and marketing is not just focused on the individual buyer, which may be a police chief or it may be a City Risk Manager, it’s actually coordinated through political motions. It’s time we do that. That’s part of our federal strategy. And more recently, as everyone knows, we’ve actually able to scale through W1 and their talented personnel, industry and government contacts that are in play today that are valuable for our cause. And we have enough confidence not falling to sleep at the wheel here. We recognize that it’s a critical element to our planning, and we’re executing on that. And so we are – you have confidence not falling to sleep at the wheel here. We recognize that it’s a critical element to our planning, and we’re executing on that.

I’m going to add one thing to that. The same data that we’re now reintroducing to chiefs and trainers and lieutenants and everybody in our ecosystem that we’re positioning this product with, that the data is even a bigger sell to the politicians. And we’re seeing when we’re flashing and presenting now, even though it’s not as complete a set as I’d like, it’s enough, and we’re seeing the reactions from the politicians. It’s kind of mind-boggling that we’re able to position this before, the way we did, and like I said, sell as much as we’ve sold. But now, it’s going to – it should be a lot easier because we’ve got backup finally. It’s not just – the body cams were great, and it showed what it was able to do, but it wasn’t enough. So now we’re able to quantify it in ways that we haven’t been before and I think this is the unlock. We’re at that moment where we just should be unlocking the whole ecosystem.

I’ll give a concrete example of that just because I think the numbers matter. I’ll give you an example of – an example in Colorado. Again, because of sensitivity of data, I don’t want to do an attribution to the department level. But in the 12-month period in their crisis response teams or CIT teams, they have BolaWraps on the order of about 50. In a 12-month period, they’ve used it about 28 times, which is more than twice a month. When we ask them, in confidence, how are other uses of force happening that’s on the belt, it far exceeds that. And I would say that electronic weapons are below that number, even though there are more electronic weapons on the belt. It’s extremely validating to know that you have empirical data measured even when BolaWrap has a small number of deployments, the frequency of use is up. And even with a wider deployment of other things than traditional belt, that’s less frequently used. So we – this is a validation that we do have a place on the use of force continuum. We have to give someone an opportunity to have an advantage to do something responsibly for their safety, for their communities’ safety, to answer this right now. So I just want – I think it drives home the point, and this is the same thing that politicians want to know, where is it working, what is the data, and it’s a very positive message.

I’m going to just – I’m sorry, I’m going to rip just on that. One of our largest major – one of a major city of ours and largest customer spoken to the – so to six months ago, we had a meeting with the chief and his command staff, and we asked him what a successful BolaWrap program looks like to him. In his response, he thought about it for a second, he was a little off guard by the question, he hadn’t thought about before, but then he reflected and said usage. Show me that my – show this needs to be go to. I want to see this be the most actively deployed device on the belt. And so we took that back with us, and we started focusing on really got hammering down on the data and really looking at that. And this is what’s driving us. And in his department, right now, the usage is trending up. And the – as a result of a new policy that came into place about eight months ago, the usage of the other devices, this is a major city here, have dropped by close to 60% – almost 70%, okay? So here we have a major city that granted our program hasn’t taken off. It’s decent. We’ve just retrained them but policy went in place that took the other devices, TASER, pepper spray, baton and gun and dropped it by 65%. And you know what happened, it’s now hands-on, and they are going straight and it’s become a hands-on environment and that’s where we fit in. Usage is going down on the belt because of policies becoming harder and harder to use what’s on the belt today. And quite frankly, this is kind of happening organically for us. I mean, the policies, we didn’t force these policies. They’re just – it’s happening. And we’re seeing it change behavior, and I believe that’s part of the tailwinds that’s driving deployments. And we now have a way to better support it. We’re armed with our mistakes and some of our successes. We’re putting it together now and presenting a new way to go-to-market and a new way to train that’s starting to take hold. Very good. Let’s go to the next one.

Next question. Does Wrap engage with community leaders as part of its outreach plan?

I’ll take that. In the past, we have and it has been very effective. And there’s still efforts going on. But to be honest, not to the extent it should. This will be part and is part of our new go-to-market that will be unpacked throughout this year, but community leaders are extremely important and its advocacy groups as well. And we’re getting by – when we reach out to these groups, the buy-in is – it comes really, really easily. And again, I hate to keep beating this horse but the data is just supporting our thesis here. So there’s going to be alliances and partnerships. And yes, community plays a big role in all of this, and we need to lean into that. We know it. So look for that activity to start picking up.

Okay. Next question. How will the end of Governor Youngkin’s term and a potential new candidate impact Wrap’s outlook in Virginia?

Okay. Scot, I’ll take that one. Look, I think the impact should be negligible. This is the – the mental behavioral emergencies across America and particularly in Virginia, that applies to both sides of the aisle. Neither side wants to have a bad answer to what are we doing with communities in need, kids with autism that are going through an issue. I mean this is a publicly visible issue. Violence is not the answer on some of these – in many of these cases. And so the connections we’re making now and the momentum that we’re building will persevere through political changes left or right. Granted in America, there are a lot of topics that are polarized and the pendulum swings. This is not one of them. And so we’re building lasting and trusted connections, preserving the momentum we have now and in our efforts, both in Virginia and federally, the work we’re doing along the political leaders are attractive right down the middle issues. And so I feel that when we do the right job and the right messaging, that the impact should absolutely be negligible.

Thank you. Jared, to that end, in Virginia, what is the current status of the Virginia manufacturing facility?

I’m happy to say that the move is now complete. All restructuring costs associated with that are now done. It’s a tremendous achievement. It’s led with outstanding team members in our organization. We are now completely out of Arizona. The facility in Virginia is a temporary facility as our new building that was coordinated through Governor Youngkin’s office in Virginia Economic Development is underway and expected to be completed at the end of the year. Given our inventory levels, which is a positive thing, we’re able to meet demand as we see right now. Should we need to develop more BolaWraps, we have already in our inventory, the raw materials to convert them to finished goods for both BolaWrap 150 and the cassettes. So we’re in an outstanding position. We’ve moved quickly. We are now positioned and aligned fully in Virginia. We can meet demand with existing inventory. We have new people and created jobs in Southern – Southwest Virginia. And so Lou and Scot, I’m happy to report that, that’s all complete.

Great. Thank you. Next question. Can you provide an update on international orders, specifically, Chile and Italy?

I’ll take that. Italy, I don’t have an update on, but let me just shed some light on Chile since it’s a big event for our company and a lot of eyes on it, obviously. So Chile started, I think, the whole three, maybe even four years ago. And that started with a – I think we got the first devices to them less than – it was probably two years ago. They started off with 500. They doubled it and then they went to 2,000. And what moved it forward was the results that they had. Our understanding is they’ve had hundreds of deployments, which drove them to a decision that they wanted to standardize on this equipment. This is – and this became – and then they made that public. We saw that they passed the budget a line item for it. We are in regular contact with our team there. And we’re being told it’s a this year event. Every indication is it’s a this year event. It’s a multiyear rollout. And it’s actually – they’re indicating it’s much bigger than what we – what they told us, which was it’s going to be full deployment around the Carabineros, which is 33,000 officers, and they’ve made that public. So we’re receiving the information like you’re receiving the information, they’re making it public. But every indication is it’s a go. And we’re anticipating it, we’ve all been anticipating it. But what’s interesting about it is we’ve had a lot of other countries indicate and let us know that they’re watching and they’re talking to the Chilean police about our program. But we’re also seeing – we’re seeing acceleration in other countries. So I’m very optimistic on Chile. It’s obviously big for us, but guess what? There’s a lot more countries out there, and we’ve got probably 10-plus pilots going in different stages with national police forces. And of course, we hear this through our distribution, but I’m seeing programs advance, and I really don’t think we have a – there’s no hands-on device out there that competes with this. So I feel like, again, as this data starts to make its way into the world and shows the usage here in the United States, I think it’s just going to accelerate everything that we’re doing around the globe. And the international opportunities here are absolutely massive, as you guys know. You can see what’s going on with Chile. They’ve made it public, but I don’t see – I really don’t see how – I think this is going to be right for every national police force around the world. That’s my feeling on it. I feel like this is a blockbuster product. We’re seeing the behavioral change right now in the United States with the data we’re looking at. And it’s not just to this country, it’s going to expand overseas. So I feel like the overseas opportunity is just as exciting as the domestic opportunity on the BolaWrap. Jared, do you want to comment on that?

Yes, I’ll just also add. What we – when I look at Chile, which is a tremendous opportunity in itself, I look at it, how can we replicate this elsewhere. And part of that strategy is an accomplishment we had in the first quarter, which is bringing on the former Chief Banking Officer at EXIM Bank, the United States Export and Import Bank, as an adviser to our company. EXIM provides financing solutions for devices or technologies that are mainly assembled or manufactured in America. We are all proud to say that this is – BolaWrap is an assembled in the USA. product. It is financeable through EXIM options. And so while Chile is an example where they may do it themselves, the international interest and signal that, that represents affords us the opportunity to use it as a model, as an exemplar to other countries who also have national policing concerns. Recently, Scot and I were also in D.C. being invited to the embassies of many countries. And they’re having questions with them and when we’re sitting down with ambassadors and then they’re asking because Chile is an example that’s in the public view, it’s in the papers. What are you doing? How can we have a same and similar program? And each country is unique. The process is a little different, but that’s our responsibility. In response to that, we – in building out our sales and marketing engine as a repeatable motion, we’re looking at not just a domestic and repeatable, scalable domestic model. We have ways to now revamp our international go-to-market. Look, we’re all in a reputable publicly traded company, and we need reputable ways to go in effectively with distributors. We’re going to do that. And so Chile is a wonderful opportunity by itself. Other countries are heating up as well. We do have the inventory to address the need and the excellent accomplishment this quarter only increases the likelihood of having a U.S. bank-backed financial solution to move into these countries.

Great. Thank you. Next question. What happened with the LAPD testing of the BolaWrap a few years back?

I’ll take it. Several years of a pilot did not go well. You can blame, point fingers, politics, attrition in our company, leadership, training, the weather, there’s a ton of excuses, but the bottom line is it just didn’t go off the right way. I’ve got my opinion on it. But I will tell you that not unlike any other major city, there’s been several – well, let’s put it this way. There’s been several high-profile major cities that had BolaWrap programs going on that canned their programs, did not move forward. This was in the paper. It was talked about, it was in the media, and it looked like a pretty – it looked pretty dismal to see a major city cancel or not move forward. But just recently, when sharing the data that we’re recently getting, it’s totally changed. It’s changed the conversation; it’s changed the mindset. It’s put us in a different discussion. And I would not be surprised if LA or any major city that’s had the BolaWrap program, that’s thinking about a program, we will be in front of soon with these results, have a very hard time believing they’re just not going to move forward with us because the data is speaking for itself. Granted, it’s not going to be easy, nothing is easy, but it’s black and white and we’re seeing the reaction on the other side. It’s really good. It’s real. BolaWrap is working. It’s working really, really well. And we’re seeing adoption that we believe – and we think we have now better methods in training and a way to deliver it that’s going to take what we’re already doing, which quite frankly, hasn’t been a straight shot, but it’s absolutely going to accelerate. So look for LA and other major cities to certainly – we are certainly going to be putting this in front of them, and we believe it’s so compelling that they’re just going to have to start their programs again. That’s my view on it. We’re sitting on really good information that we just got it. We just really in the last six months, put it together, it’s sensitive, like Jared said, it’s super sensitive. But it’s our job and responsibility and our duty to get this in front of them and get this in front of the media to spread the word because it’s working and it’s working better than any of us knew.

Great. Thank you. Final question here. With all of these new hires, is Wrap building something similar to Kroll Associates?

Hey. Lou, I’ll take that one. Kroll Associates is a model that I’m familiar with. And the answer to that is, in some ways, yes, we are; in some ways, no. How are we doing something similar? We have tremendous talent that we’re able to pull together more recently. Our press releases have announced former leaders out of the FBI, DEA, intelligence community, sensitive components out of the Pentagon. And so these are individuals with highly accomplished careers that have global networks, sometimes with other national police or other government agencies. And in that way, that’s a model in some ways that Kroll has used to expand their global footprint and form trusted relationships in the private sector that are putting to use a lot of the tradecraft and methodologies and technologies that were formally only used in the government, but now are being given to private companies and high net worth individuals. So there is overlap in that way. The way that it’s different, and I think this is a very important note to make, is that what’s the revenue model behind it. Professional services, while it gives an immediate opportunity for revenue growth, can at times be bumpy, and we know that it has to be we want to build a scalable technology, tech-enabled business. So the way that we’re dissimilar, and I know Kroll has evolved as well, is that what we’re going to do is have these individuals be more of a managed service that support our BolaWrap program today. Many of these are law enforcement professionals. They give us the credibility and prestige that this technology requires. And so when we look at our revenue model going forward and give continuous value to our customers, they’re coming to a knowledge pool of experience that is top-notch and a global leader of that. And when it comes to their investigative services or their support across technologies, look, technology is wonderful and so is AI, but there’s still a human connection when it comes to corporate clients, Global 100 customers, high net worth, you need to have the experience and the tradecraft to apply those technologies. So when it comes to revenue models, we are going to have a managed service that’s tech-enabled and a recurring business line there that both bolsters the BolaWrap program and expand our offerings to increase revenue expansion.

And I’m going to add to it. It was a thought and a theory before the acquisition, but we knew after lots of meetings with them that we realize they have reached deep reach not only in our state department, but embassies across the world. And we thought that they could help us push, get information in country and help us push through embassy to shine light on our program to get the backing from the U.S. in country. And it turns out that some of our biggest opportunities right now are overseas. We’re able to work through our embassies and support our distributors in what’s happening on the ground in these countries in ways that we never were able to do in the past. And that is being well received with our distributors. That’s giving us another next connectivity point that we never had before. And with this financing option that Jared mentioned coming through Exim Bank, it’s a very good value prop with good relationships, solid relationships that go back whole careers. And I think that teamwork with the local on the ground blocking and tackling that’s going on with our reach through embassies and State Department and W1’s global network, it’s really allowing us to get much more clearer and get much more intentional about where to spend time, and we’re seeing the effect of that. And I believe it’s just accelerating deals and it’s actually making these opportunities bigger. So the W1 acquisition has got – it’s just more than the investigative side. It’s much more than that. And it’s actually turning out exactly what we thought, which is going to help us accelerate deals, large deals overseas. So we’re very pleased and I think we’re ahead of plan already. So they’re doing great. And its capability we never had, and at the end of the day, you’re talking about people and relationships and teamwork and it feels really good, and we’re off to a great start. Lou, I think is that the last one?