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Date

Wednesday, May 13, 2026, at 4:30 p.m. ET

Call participants

  • Chief Executive Officer — Scot Jason Cohen
  • President and Chief Operating Officer — Jared Novick
  • Vice President of Finance — Louis Springer

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Takeaways

  • Total revenue -- $1.1 million, a 45% increase, driven by higher demand for BolaWrap 150 devices.
  • Product sales -- $900 thousand, up 186%, reflecting expanded adoption by domestic and international agencies.
  • Bookings -- $3.2 million, indicating ongoing pipeline conversion and future contract momentum.
  • Technology enabled services revenue -- $200,000, down from $500,000, with the decline offset by the wind down of certain advisory and investigative services.
  • Cassettes and consumables -- Represented a growing component of product revenue, consistent with an expanding installed base of BolaWrap field-use devices.
  • Gross profit -- $700,000, a 16% increase; gross margin was 62%, down from 78%, due to a higher share of lower-margin hardware sales.
  • Operating expenses -- $5.5 million, up from $4.5 million, including share-based compensation of $2.4 million and cash-based SG&A of $3 million.
  • Cash used in operating activities -- $1.2 million, an improvement of 59% from $3.1 million, reflecting disciplined cash management and reduced cash burn.
  • International expansion -- Agencies in India, Panama, Brazil, Malta, and the UK adopted BolaWrap, WrapReality, and counter-drone products, with follow-on orders.
  • Federal market positioning -- Continued pursuit of federal business with TAA-compliant products and expanded manufacturing capabilities for DOD and DHS procurement opportunities.
  • Recurring revenue -- Early momentum in subscriptions and software-driven sales (WrapVision, WrapTactics, WrapReality), with potential for improved revenue quality over time.
  • Drone and counter-drone orders -- Secured preorders in the UK, Europe, and Panama, with new R&D focus on net-based drone interdiction.
  • Leadership statement -- CEO Scot Jason Cohen said, "we continue to target 100% growth for this year," emphasizing strengthened conviction based on pipeline visibility and booking trends.

Summary

Wrap Technologies (WRAP +0.70%) reported measurable growth in revenue and bookings, alongside increased operating expenses tied to go-to-market execution. International and federal opportunities are being developed, with both hardware and subscription software products gaining initial traction beyond core domestic law enforcement customers. Management highlighted a pivot in capital strategy, noting that sustained performance may provide access to institutional financing options. The call documented progress toward agency-wide adoption of nonlethal response solutions and discussed ongoing efforts to professionalize executive leadership, including an active CFO search process.

  • Sustained international reorder activity for integrated nonlethal response solutions indicates agency reliance and engagement worldwide.
  • Management cited active R&D expansion into autonomous and net-based drone technology as part of the product strategy for adjacent market entry.
  • Vice President of Finance Louis Springer clarified that cash-based SG&A was $3 million compared to $2.5 million in the prior year period, reflecting investment in sales and expansion initiatives.
  • The shareholder base remains concentrated and "extremely sticky," with CEO Scot Jason Cohen highlighting law enforcement participants and stability over four years.
  • CEO Scot Jason Cohen stated, "If we can get through the second quarter and execute through this year, we will have plenty more financing options available to us."

Industry glossary

  • TAA-compliant: Satisfies the Trade Agreements Act, enabling eligibility for U.S. federal government procurement contracts.
  • DFRX: Drone Forensics and Response platform produced by Wrap Technologies for counter-drone operations.
  • SG&A: Selling, general, and administrative expenses, encompassing the overhead costs associated with operating the business.

Full Conference Call Transcript

Louis Springer: Thank you. Good afternoon, and welcome to Wrap Technologies First Quarter 26 Earnings Conference Call. I am Louis Springer, Vice President of Finance. Joining me today is Scot Jason 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. That are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 2000 and the Federal Securities Regulations.

Please review the forward looking and cautionary statement section at the end of our first quarter 26 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 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 any offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus 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 those 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 compared to first quarter ended 03/31/2026 with the first quarter ended 03/31/2025.

The earnings release will be available on the financial info section of our website at ir.rap.com. In addition, a replay of this earnings call will be posted on our website after the call. I will now hand it over to Scot.

Scot Jason Cohen: Thank you, Louis. Good afternoon, everybody, and thanks for joining us today. When we spoke in March, we told you that for the first time, we had visibility into our pipeline. And that we are targeting 100% revenue growth for 26. 1 quarter in, I can tell you that based on the information we have today, our conviction in that target has strengthened. The momentum we described coming out of the fourth quarter carried directly into the first quarter and has continued to build as we move into the second quarter. First quarter revenue grew 45% year over year. More importantly, product sales the core measure of agency adoption, with our technology grew 186%.

That growth was driven by increased domestic and international demand for the BolaWrap 150 line. Including continual reorders from a very active installed base. We believe these numbers indicate 2 things. First, the pipeline we talked about in Marcy is beginning to convert. And second, the agencies that have adopted BolaWrap are using it and expanding. Internationally, we are expanding our footprint We have expanded our footprint in India, Panama, Brazil, Malta, and The UK. Across the BolaWrap, WrapReality, our drone and counter drone solutions. We are seeing the reoccurring side of this business start to take shape.

Cassettes represented a growing number-- a growing component of product revenue in the quarter, consistent with the expanding base of BoRap devices in active field use. Subscription activity and wrap reality wrap tactics, and wrap vision is beginning to build behind that. Recurring revenue is a slower compounding story than our single large pro than a single large product order. But it is-- it is a meaningful contributor to the quality of our revenue base over time, and it is growing steadily.

On the innovation front, the early commercial traction we are seeing from the drone and counter drone reinforces our view that nonlethal response integrated with autonomous platforms is a real and emerging market. and 1 in which we believe we are well positioned for. Jared is going to cover that in detail shortly. I am now gonna turn it back over to Louis, who is going to walk you through the financial results and Jared will cover our operational progress and R&D growth initiatives. I will come back to discuss our outlook and priorities for the balance of 2026. Thank you.

Louis Springer: Thank you, Scot. The financial results in Q1 suggest that our strategy is beginning to translate into commercial traction. Total revenue for the first quarter was $1.1 million an increase of 45% compared to the $800 thousand in the prior year period. We saw our bookings grow to $3.2 million over the same period. Product sales increased 186% to $900 thousand compared to $300 thousand in the prior year quarter driven by increased domestic and international demand for the BolaWrap 150 product line. Cassettes and consumables represented a growing component of product revenue. Consistent with the expanding base of BolaWrap devices in active field use.

Technology enabled services revenue was $200 thousand compared to $500 thousand in the prior year period. The year over year change reflects the growth in WrapVision, and related software revenue. Offset by the wind down of certain advisory and investigative services. We are focusing technology enabled services revenue line on higher margin and software based offerings. Including WrapTactics, Wrap Reality, and WrapVision Evidence Management subscriptions. Gross profit increased 16% to $700 thousand. Compared to $600 thousand in the prior year period. Gross margin was 62% compared to 78% in the prior year period. The decline in gross margin percentage reflects the growth in hardware product sales in Q1, which carry lower margin than software subscription demand services.

We currently expect gross margins to improve as technology enabled services revenue grows as a proportion of total revenue. Throughout 2026. Although there can be no assurances that this mix and or shift will occur at the pace or magnitude we anticipate. Within selling, general, and administrative expense, share based compensation was $2.4 million for the first quarter compared to $1.7 million in the prior year period. Cash based SG&A was $3 million compared to $2.5 million in the prior year period. Reflecting investment in sales and go to market expansion. Total operating expenses were $5.5 million compared to $4.5 million in the prior year period.

Please note, as always, a reconciliation of GAAP to non GAAP measures can be found in our earnings release, which is posted on our website. Cash used in operating activities improved 59%. To $1.2 million compared to $3.1 million in the prior year period. Reflecting higher revenue dis discipline cost management and reduced cash burn even as we continue to invest in sales and go to market activities. We believe the first quarter results reflect a leaner, more focused business that is beginning to grow with the non lethal response framework we laid out last quarter. I will now hand it over to Jared to cover our operational highlights and strategic initiatives.

Jared Novick: Thank you, Louis. As we look beyond the headline financial results, the first quarter also provided early evidence that our go to market strategy is beginning to gain traction in areas we have prioritized for growth. Let me describe this in the following key areas. Non lethal response at scale. We see agencies are increasingly interested in moving away from single device purchase to agency wide adoption. In the first quarter, we saw this validated as agencies began to make that transition. The integrated program approach, of hardware technology training and policy is what is resonating.

When it comes to federal and defense market entry, our strategy is supported by federal consultants and advisers that continue to position our portfolio for DOD, DHS, and other federal customers. We continue to focus on TAA compliant products, made in America manufacturing efforts, procurement infrastructure through Carahsoft as our master government aggregator give us the foundation to compete for that work. When it comes to counter UAS and our advancements there, our R&D investments into drone to drone and drone to person capabilities are showing traction. We have preorders for both drone and counter drone systems.

With recent orders across The UK and Europe, and follow on DFRX orders from our partner in Panama, and our R&D expansion into net based drone interdiction reflect that a market is moving from concept to procurement. International reorders and engagements across The UK, Europe, India, Panama and Malta during and after the quarter supported the view that demand for integrated nonlethal response solutions is broad based and global. I will now hand it back to Scot to discuss our outlook for the balance of 2026.

Scot Jason Cohen: Thanks, Jared. Putting all this together, we continue to target 100% growth for this year. What has changed in our visibility into our pipeline, and our conviction? The contracts that we are currently pursuing for 2026 and 2027, if awarded, have the potential for a meaningful increase in the scale of this business. However, these opportunities do remain subject to competitive processes and government funding decisions and other factors outside of our control. But in summary, Q1 showed early evidence that our go to market strategy is beginning to convert into measurable commercial traction with revenue growth, stronger product sales, and expanding bookings and lower operating cash use. We are seeing customers move towards broader nonlethal response adoption.

While early drone and counter drone preorders suggest that our recent R&D investments may open additional markets beyond the core handheld BolaWrap platform. Our focus for the balance of 2026 is straightforward. Continue converting pipeline, deepen agency wide adoption, advance federal and international opportunities, and execute against our 100% revenue target for this year. To all you shareholders, thank you. Thank you for your continued support and confidence. All right, Louis. I am going to turn it over to you. I think we have got how many questions do we get today?

Louis Springer: We had 4 questions come in.

Scot Jason Cohen: Alright. Let's hear them. So first question that came in should shareholders view the current financing approach as a temporary bridge during the company's scaling phase? Or as the capital structure model management expects to continue utilizing going forward. Alright. I am going to take that 1 since I have been leading and driving a lot of the capital-- all of the financing. So look, it is-- it is really straightforward. The more liquidity in our stock, the more options you have. The and to get institutional quality investors, they are looking for fundamentals in this business. We finally have them. We finally have pipeline that we can show. We finally have a sales rep.

We finally have fiscal discipline that is showing up in our numbers. And if we can continue to drive the top line like what is unfolding here, we are going to be a lot of different financial options for us. It has been a tough You guys know how much money I put into this company. I am participating in these rounds. It was not something I was anticipating doing, but I am standing up for this company.

I am standing up for what we are building, and I am not stopping because we have got really important work in front of us. it is not easy taking in money for a company that has not been formed because we have not. it is been really tough. But if things continue, and I have never the company's never given out guidance, but if we can execute on this, we will have finally, for the first time, some real financing options. I hope that answered your first question. Second, The second is what specific indicators should shareholders watch for evidence of the company reducing its long term reliance on higher diluted financing structures?

Louis Springer: The first thing you need to do is put the fundamentals in place and put up numbers, which thankfully we are doing now with visibility, which we will be talking about the whole be this will be unfolding throughout the year.

Scot Jason Cohen: So I went as you are on that path, we get to engage with different types of funds, different types of brokers, that actually have fundamental investors that are interested in a financial story with some big upside associated with it. So that-- those are-- that is activity that we are getting ready for because finally, the company can stand. I used to be on the buy side. I was on the front on the on the sell side. So I know this arena extremely well. And I know how much time can get wasted on the road, and I know what funds are looking to invest in. And we are definitely investable.

When you put the-- you put the numbers together with the story that is unfolding here, I think we are going to have a lot of financial-- a lot better financial options going forward. So you could and the first sign is when we actually do it. When we actually put up a deal, that with some with some institutions that everybody can see, and it is-- those are bigger transactions. And you can see those funds will hopefully be active filers in small cap companies. With long term positions. But I will say this. Being real about our cap table, I am very proud of that cap table. There are-- there are still we have some extremely sticky shareholders.

We pulled the shareholder base 3.5 years ago, maybe 4 years ago, and found that over 1/3 of our cap table were people associated with law enforcement. That is that made me very proud. And that is a really good indicator the industry is buying in on what this technology is about. So and if you look at our top holders, you can look at some of the small, but our top holders have been in place for from the beginning. it is had very little change in the in that whole shift. So I am I am thankful and grateful that people have been supporting us for years and have not stopped.

Those financings that have taken place, those smaller financings, let's call them 3 to 5 we could have taken in bigger money possibly, but hard to get real fundamental people involved, and you cannot go out to the street and keep talking about this because it puts pressure on the stock. You have to be very, very careful. So again, the thing that makes me proud, not only do we have a large amount of our cap tables coming from people that are associated with law enforcement, But our top holders and most of our holders have not moved their positions. Some of them increased. But they have not moved.

So and particularly the people that have invested in those the pipes, the 3 or 4 last deals that we have done, they are still in there inside. Barely any of them have sold their positions. So that is not easy to do. It you need to have trust with that investor, and I think we have established that But it is time. I think we all want a different class of investors in. We can access them if we keep doing exactly what we are on a path to start to access that kind of capital. If we can get through the second quarter and execute through this year, we will have plenty more financing options available to us.

Next question, Louis. Next question is investors have seen extended periods where the CEO simultaneously has held multiple executive and financial reporting functions. Is there a plan to search for a CFO?

Jared Novick: Oh, yeah. There certainly is. Look. We have had plenty of C suite turnover. I could tell you with and you could see evidence by today's call, we were ahead of time for the first time in a long time. Our systems are in place, and our controls are the best they have ever been. So big thanks out to Yulu and Brian and the rest of the team. They have done a great job to get us here, and get us finally in a good place financially. But we are going to-- I am going to be looking for a CFO that can help talk to capital markets, help tell our story and get in front of investors.

But in order to do that, you better have the numbers to because you will not even get the meeting. You will be wasting time. So I think we are coming up to that point. We are in the lockout. We have done interviews. And we will find the right candidate But the good news is our financial infrastructure is the best it is ever been. Jared, do you have anything to add to that?

Scot Jason Cohen: it is a priority of company. Leadership matters. it is leadership. So it is it is 1 of the key initiatives of the company to find top talent in these positions.

Louis Springer: Right. Okay, Louis. What else we got?

Scot Jason Cohen: Final question. How should shareholders interpret the 04/10/2020 trading session where trading volume dramatically exceeded historical norms without any repricing of the equity.

Louis Springer: Great question. I am still scratching my head how that happened. I am going to leave it to algorithms. I think an algo must have gotten ahold of us, and traded back and forth because as soon as-- I saw no big changes in the cap table. Subsequent to that event. So if I saw a large movement in the share any of the large shareholders, I could tell you that I was from, but it was not. I saw no movement in the cap table. So, unfortunately, it was a bit of a head fake. It was exciting day. I did not know where it was coming from, but my best guess is an algo. All right.

Scot Jason Cohen: That concludes our question and answer portion.

Louis Springer: 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 first quarter 26 earnings conference call. Thank you.

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