Wrap Technologies, Inc. (Nasdaq: WRAP) (“Wrap” or the “Company”), a
global leader in innovative public safety technologies and
services, today announced results for the fourth quarter and
full-year ended December 31, 2021.
Fourth Quarter 2021 Summary
- Net Revenues of $2.4 million, growth of 73% over prior
year Q4
- Gross Margin of 30.1% compared with 33.4% for prior
year Q4
- Launched upgraded version of flagship remote restraint
product in October 2021 – the BolaWrap 150
- Trained law enforcement agencies increased to 940,
growth of 109% from December 31, 2020
- Certified officer instructors increased to 3,250, up
139% from December 31, 2020
Full-Year 2021 Summary
- Net Revenues of $7.7 million in 2021, growth of 96%
over the prior fiscal year
- Gross Margin, excluding one-time non-cash line
improvement expense of $0.8 million, of 35.5% for 2021 compared
with 34.1% for 2020
- Announced a collaboration with Amazon Web Services
(“AWS”) to deliver WRAP Reality’s VR training platform to law
enforcement
- Continued strategy of releasing body-cam videos of
successful BolaWrap uses by law enforcement agencies – increases
awareness and educates public on de-escalation
effectiveness
- Published initial Environmental. Social, and Governance
(“ESG”) letter to stakeholders and became a participant of the
United Nations Global Compact
- Earned the ISO 9001:2015 Certification for our Quality
Management System
Commentary and Executive Search
Update
Scot Cohen, co-founder, director and a large
shareholder of Wrap, commented:
“Wrap delivered strong financial results and
continued establishing valuable brand awareness across global
markets in fiscal year 2021. This culminated in our best quarter of
total revenues in our history and full-year total revenue growth of
96%. Leadership is incredibility proud of how our team adapted and
retained focus during what was a year of change and transformation.
In our view, the past year was an important step on our path to
enhanced diversification, increased innovation and long-term value
creation.”
“Since announcing our leadership transition plan
in late January, the Board has been assessing Wrap’s go-forward
strategy and working with a national search firm to identify the
ideal chief executive officer to lead the Company during its next
phase. The Board continues to believe Wrap has significant
opportunities to grow and scale as the addressable market for
public safety technologies and services expands. To seize these
opportunities, we are looking for a leader with the ability to
diversify our mix of products, offerings and data-oriented services
beyond just BolaWrap and Wrap Reality. We are having advanced
discussions and look forward to announcing the appointment of
Wrap’s next chief executive officer once the Board’s search process
concludes.”
|
|
Three Months Ended |
|
Year Ended |
|
|
Unaudited |
|
December 31, |
|
December 31, |
|
|
(Amounts
in thousands, except per share data) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
Total revenues |
|
$ |
2,449 |
|
|
$ |
1,415 |
|
|
$ |
7,729 |
|
|
$ |
3,944 |
|
|
|
Net sales
growth(1) |
|
|
73 |
|
% |
|
464 |
|
% |
|
96 |
|
% |
|
466 |
|
% |
|
Gross margin
rate(2) |
|
|
30.1 |
|
% |
|
33.4 |
|
% |
|
25.8(2) |
|
% |
|
34.1 |
|
% |
|
Net loss |
|
$ |
(5,229 |
) |
|
$ |
(3,556 |
) |
|
$ |
(24,449 |
) |
|
$ |
(12,580 |
) |
|
|
Net loss per basic
and diluted share |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.37 |
) |
|
|
(1) As compared to the
prior-year period.(2) Excluding one-time expenses
of $0.7 million incurred in the 2Q21, the gross margin rate was
35.5% for the full-year 2021.
FOURTH QUARTER AND 2021 FINANCIAL AND OPERATIONS
HIGHLIGHTS
Net Sales
- Generated revenues of $2.4 million for 4Q21, 73% growth
compared to 4Q20. Revenues increased 96% year over year.
- International sales were 60% of total sales for the Full-Year
2021. This compares to 64% of total sales for the Full-Year
2020.
- We shipped products to 15 additional countries in 2021. This
brings us to having deployments in 51 countries.
- Backlog at the end of the 4Q21 was $0.3 million.
- We expect the pandemic to continue
to impact sales efforts in 2022, but on a diminishing basis both in
the U.S. and internationally.
Gross Profit
- Generated $0.7 million of gross
profit in 4Q21 and $2.0 million for the Full-Year 2021.
- We anticipate our gross margins to
improve as we ramp our revenue base and transition to the BolaWrap
150.
Selling, General and Administrative
(SG&A) Expense
- SG&A expense increased $0.4 million in 4Q21 compared to
4Q20. SG&A expense increased to $20.3 million in Full-Year 2021
compared to $11.7 million for Full-Year 2020.
- The 2021 increase was driven
primarily by a $2.6 million increase in non-cash share-based
compensation, $2.8 million in compensation and consultancy costs as
we invest in our sales force and training teams, and $1.6 million
of public reporting related expense.
- Travel expense increased modestly during 2021 as pandemic
restrictions abated.
Research and Development (R&D)
Expense
- R&D expense increased $1.2 million in 4Q21 to $1.9 million,
as compared to 4Q20, due primarily to the development of the new
BolaWrap 150, development of Wrap Reality, and other R&D
initiatives.
- R&D expense for the Full-Year 2021 was $6.2 million
representing a $3.4 million increase over Full-Year 2020 driven
primarily by BolaWrap 150 development.
- We continue to invest in R&D as
we expand important research initiatives in response to identified
market opportunities, including further development in WRAP
Reality.
Capital Structure and
Liquidity
- Cash, cash equivalents and
short-term investments were $34.9 million at year-end 2021 compared
to $41.6 million at year-end 2020.
- During 2021, received $12.0 million
in proceeds from the exercise of warrants and $1.7 million in
proceeds from the exercise of stock options.
Outlook
The Company is not providing formal guidance for
Fiscal Year 2022 at this time due its ongoing executive leadership
transition and other market factors. Overall, the Company expects
to achieve year-over-year growth in Fiscal Year 2022 thanks to
increased customer demand and heightened visibility for the
BolaWrap 150. With that said, the Company experienced supply chain
issues in deploying the new BolaWrap 150 that impacted the Company
through February 2022. It is anticipating that supply chain
constraints and geopolitical uncertainty could lead to softer sales
during the first half. The Company will update its outlook upon
reporting first quarter results.
Webcast and Earnings Conference
Call
The Company will host an investor conference
today at 5:00 pm ET to review its results. This call and all
supplemental information can be accessed on Wrap’s investor
relations website: https://wrap.com/investors/. The dial in
information for the investors is:
- PARTICIPANT DIAL IN (TOLL FREE):
1-877-270-2148
- PARTICIPANT INTERNATIONAL DIAL IN:
1-412-902-6510
(ask the operator to join the WRAP Technologies
conference call)
A recording of the conference call will be made
available on the Company’s investor relations website.
About Wrap Technologies
WRAP Technologies (Nasdaq: WRAP) is a global
leader in innovative public safety technologies and services. WRAP
develops creative solutions to complex issues and empowers public
safety officials to protect and serve their communities through its
portfolio of advanced technology and training solutions.WRAP’s
BolaWrap® Remote Restraint device is a patented, hand-held
pre-escalation and apprehension tool that discharges a Kevlar®
tether to temporarily restrain uncooperative suspects and persons
in crisis from a distance. Through its many field uses and growing
adoption by agencies across the globe, BolaWrap is proving to be an
effective tool to help law enforcement safely detain persons
without injury or the need to use higher levels of force.WRAP
Reality, the Company’s virtual reality training system, is a fully
immersive training simulator and comprehensive public safety
training platform providing first responders with the discipline
and practice in methods of de-escalation, conflict resolution, and
use-of-force to better perform in the field.WRAP’s headquarters are
in Tempe, Arizona. For more information, please visit wrap.com.
Use of Non-GAAP Information
Included in this press release are non-GAAP
operational metrics regarding agencies and training, amounts of
non-cash stock-based compensation expense and adjusted gross
margin, which the Company believes provide helpful information to
investors with respect to evaluating the Company’s performance.
Trademark InformationBolaWrap, Wrap and Wrap
Reality are trademarks of Wrap Technologies, Inc. All other trade
names used herein are either trademarks or registered trademarks of
the respective holders.
Cautionary Note on Forward-Looking Statements - Safe
Harbor Statement
This press release contains "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995, including but
not limited to: statements regarding the Company's overall
business; total addressable market; and, expectations regarding
future sales and expenses. Words such as "expect", "anticipate",
"should", "believe", "target", "project", "goals", "estimate",
"potential", "predict", "may", "will", "could", "intend", and
variations of these terms or the negative of these terms and
similar expressions are intended to identify these forward-looking
statements. Moreover, forward-looking statements are subject to a
number of risks and uncertainties, many of which involve factors or
circumstances that are beyond the Company's control. The Company's
actual results could differ materially from those stated or implied
in forward-looking statements due to a number of factors, including
but not limited to: the Company's ability to successfully implement
training programs for the use of its products; the Company's
ability to manufacture and produce product for its customers; the
Company's ability to develop sales for its new product solution;
the acceptance of existing and future products, including the
acceptance of the BolaWrap 150; the risk that distributor and
customer orders for future deliveries are modified, rescheduled or
cancelled in the normal course of business; the availability of
funding to continue to finance operations; the complexity, expense
and time associated with sales to law enforcement and government
entities; the lengthy evaluation and sales cycle for the Company's
product solution; product defects; litigation risks from alleged
product-related injuries; risks of government regulations; the
impact of health crises or outbreaks of disease, such as epidemics
or pandemics; the impact resulting from geopolitical conflicts and
any resulting sanctions; the ability to obtain export licenses for
countries outside of the US; the ability to obtain patents and
defend IP against competitors; the impact of competitive products
and solutions; and the Company's ability to maintain and enhance
its brand, as well as other risk factors mentioned in the Company's
most recent annual report on Form 10-K, quarterly report on Form
10-Q, and other SEC filings. These forward-looking statements are
made as of the date of this press release and were based on current
expectations, estimates, forecasts and projections as well as the
beliefs and assumptions of management. Except as required by law,
the Company undertakes no duty or obligation to update any
forward-looking statements contained in this release as a result of
new information, future events or changes in its expectations.
Contact:Paul M.
ManleyVP – Investor Relations(612)
834-1804pmanley@wrap.com Media Contact:
media@wrap.com
|
|
|
|
|
|
|
|
|
|
Wrap
Technologies, Inc. |
Condensed
Consolidated Balance Sheets |
(unaudited -
dollars in thousands) |
|
|
|
|
|
|
December
31, |
|
|
2021 |
|
|
2020 |
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
4,937 |
|
$ |
16,647 |
|
Short-term investments |
|
29,983 |
|
|
24,994 |
|
Accounts receivable, net |
|
3,859 |
|
|
1,871 |
|
Inventories, net |
|
1,566 |
|
|
2,655 |
|
Prepaid expenses and other current assets |
|
868 |
|
|
760 |
|
Total current assets |
|
41,213 |
|
|
46,927 |
|
Property and equipment, net |
|
976 |
|
|
357 |
|
Operating lease right-of-use asset, net |
|
51 |
|
|
139 |
|
Intangible assets, net |
|
1,982 |
|
|
1,397 |
|
Other assets, net |
|
9 |
|
|
13 |
|
Total assets |
$ |
44,231 |
|
|
48,833 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
$ |
2,603 |
|
$ |
1,953 |
|
Customer deposits |
|
43 |
|
|
2 |
|
Deferred revenue |
|
155 |
|
|
16 |
|
Operating lease liability - short term |
|
56 |
|
|
94 |
|
Note payable to bank - short term |
|
- |
|
|
275 |
|
Total current liabilities |
|
2,857 |
|
|
2,340 |
|
Long-term liabilities |
|
110 |
|
|
79 |
|
Total liabilities |
|
2,967 |
|
|
2,419 |
|
Stockholders' equity |
|
41,264 |
|
|
46,414 |
|
Total liabilities and stockholders' equity |
$ |
44,231 |
|
|
48,833 |
|
|
|
|
|
|
Wrap
Technologies, Inc. |
|
Condensed
Consolidated Statements of Operations and Comprehensive
Loss |
|
(unaudited -
dollars In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
Year Ended
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
Product sales |
$ |
2,384 |
|
|
$ |
1,382 |
|
|
$ |
7,381 |
|
|
$ |
3,868 |
|
|
Other revenue |
|
65 |
|
|
|
33 |
|
|
|
348 |
|
|
|
76 |
|
|
Total
revenues |
|
2,449 |
|
|
|
1,415 |
|
|
|
7,729 |
|
|
|
3,944 |
|
|
Cost
of revenues |
|
|
|
|
|
|
|
|
Products and services |
|
1,711 |
|
|
|
942 |
|
|
|
4,987 |
|
|
|
2,601 |
|
|
Product line exit expense |
|
- |
|
|
|
- |
|
|
|
747 |
|
|
|
- |
|
|
Total cost
of revenues |
|
1,711 |
|
|
|
942 |
|
|
|
5,734 |
|
|
|
2,601 |
|
|
Gross profit |
|
738 |
|
|
|
473 |
|
|
|
1,995 |
|
|
|
1,343 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (i): |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,065 |
|
|
|
3,698 |
|
|
|
20,276 |
|
|
|
11,631 |
|
|
Research and development |
|
1,911 |
|
|
|
751 |
|
|
|
6,214 |
|
|
|
2,789 |
|
|
Total
operating expenses |
|
5,976 |
|
|
|
4,449 |
|
|
|
26,490 |
|
|
|
14,420 |
|
|
Loss from
operations |
|
(5,238 |
) |
|
|
(3,976 |
) |
|
|
(24,495 |
) |
|
|
(13,077 |
) |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Investment income |
|
9 |
|
|
|
2 |
|
|
|
31 |
|
|
|
83 |
|
|
Other |
|
- |
|
|
|
418 |
|
|
|
15 |
|
|
|
414 |
|
|
|
|
9 |
|
|
|
420 |
|
|
|
46 |
|
|
|
497 |
|
|
Net
loss |
$ |
(5,229 |
) |
|
$ |
(3,556 |
) |
|
$ |
(24,449 |
) |
|
$ |
(12,580 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per
basic common share |
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.37 |
) |
|
Weighted
average common shares used to compute net loss per basic common
share |
|
40,791,772 |
|
|
|
37,399,195 |
|
|
|
39,281,620 |
|
|
|
33,846,338 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
Net
loss |
$ |
(5,229 |
) |
|
$ |
(3,556 |
) |
|
$ |
(24,449 |
) |
|
$ |
(12,580 |
) |
|
Net unrealized gain on short-term investments |
|
(17 |
) |
|
|
8 |
|
|
|
(21 |
) |
|
|
15 |
|
|
Comprehensive loss |
$ |
(5,246 |
) |
|
$ |
(3,548 |
) |
|
$ |
(24,470 |
) |
|
$ |
(12,565 |
) |
|
|
|
|
|
|
|
|
|
|
(i) includes
stock-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
Year Ended
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
Selling,
general and administrative |
$ |
836 |
|
|
$ |
564 |
|
|
$ |
4,558 |
|
|
$ |
1,957 |
|
|
Research and
development |
|
210 |
|
|
|
111 |
|
|
|
798 |
|
|
|
280 |
|
|
Total stock-based compensation expense |
$ |
1,046 |
|
|
$ |
675 |
|
|
$ |
5,356 |
|
|
$ |
2,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wrap
Technologies, Inc. |
Condensed
Consolidated Statements of Cash Flows |
(unaudited -
dollars in thousands) |
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
Cash
Flows From Operating Activities: |
|
|
|
|
|
Net
loss |
|
$ |
(24,449 |
) |
|
$ |
(12,580 |
) |
|
Adjustments
to reconcile net loss to net cash |
|
|
|
|
|
used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
478 |
|
|
|
163 |
|
|
Share-based compensation |
|
5,356 |
|
|
|
2,237 |
|
|
Common shares issued for services |
|
239 |
|
|
|
- |
|
|
Product line exit expense |
|
747 |
|
|
|
- |
|
|
Debt forgiveness income |
|
|
- |
|
|
|
(417 |
) |
|
Gain on sale of assets |
|
(27 |
) |
|
|
- |
|
|
Warranty provision |
|
10 |
|
|
|
30 |
|
|
Inventory obsolescence |
|
- |
|
|
|
(68 |
) |
|
Software impairment charge |
|
170 |
|
|
|
- |
|
|
Changes in contingent liability |
|
(23 |
) |
|
|
- |
|
|
Non-cash lease expense |
|
88 |
|
|
|
122 |
|
|
Non-cash interest expense |
|
|
- |
|
|
|
2 |
|
|
Provision for doubtful accounts |
|
123 |
|
|
|
10 |
|
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(2,111 |
) |
|
|
(1,686 |
) |
|
Inventories |
|
|
559 |
|
|
|
(343 |
) |
|
Prepaid expenses and other current assets |
|
|
(109 |
) |
|
|
(508 |
) |
|
Accounts payable |
|
|
546 |
|
|
|
825 |
|
|
Operating lease liability |
|
|
(94 |
) |
|
|
(128 |
) |
|
Customer deposits |
|
|
41 |
|
|
|
(342 |
) |
|
Accrued liabilities and other |
|
|
(54 |
) |
|
|
493 |
|
|
Warranty settlement |
|
|
38 |
|
|
|
4 |
|
|
Deferred revenue |
|
|
(249 |
) |
|
|
(1 |
) |
|
Net cash
used in operating activities |
|
|
(18,223 |
) |
|
|
(12,187 |
) |
|
|
|
|
|
|
|
Cash
Flows From Investing Activities: |
|
|
|
|
|
Purchase of
short-term investments |
|
|
(55,014 |
) |
|
|
(34,980 |
) |
|
Proceeds
from maturities of short-term investments |
|
|
50,005 |
|
|
|
10,000 |
|
|
Capital
expenditures for property and equipment |
|
|
(995 |
) |
|
|
(249 |
) |
|
Investment
in patents and trademarks |
|
|
(187 |
) |
|
|
(129 |
) |
|
Purchase of
intangible assets |
|
|
(750 |
) |
|
|
(543 |
) |
|
Business
acquisition |
|
|
- |
|
|
|
(210 |
) |
|
Proceeds
from long-term deposits |
|
|
4 |
|
|
|
- |
|
|
Net cash used in investing activities |
|
(6,937 |
) |
|
|
(26,111 |
) |
|
|
|
|
|
|
|
Cash
Flows From Financing Activities: |
|
|
|
|
|
Sale of
common stock and warrants |
|
|
- |
|
|
|
12,400 |
|
|
Offering costs paid on sale of common stock and warrants |
|
- |
|
|
|
(733 |
) |
|
Proceeds
from exercise of warrants |
|
|
12,047 |
|
|
|
26,191 |
|
|
Offering
costs paid on exercise of warrants |
|
|
- |
|
|
|
(1,016 |
) |
|
Proceeds
from exercise of stock options |
|
|
1,678 |
|
|
|
705 |
|
|
Proceeds
from bank note |
|
|
- |
|
|
|
414 |
|
|
Repayment of
debt |
|
|
(275 |
) |
|
|
- |
|
|
Net cash
provided by financing activities |
|
|
13,450 |
|
|
|
37,961 |
|
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents |
|
|
(11,710 |
) |
|
|
(337 |
) |
|
Cash
and cash equivalents, beginning of period |
|
|
16,647 |
|
|
|
16,984 |
|
|
Cash
and cash equivalents, end of period |
|
$ |
4,937 |
|
|
$ |
16,647 |
|
|
|
|
|
|
|
|
Supplemental Disclosure of Non-Cash Investing |
|
|
|
|
|
and
Financing Activities: |
|
|
|
|
|
Business
acquisition liability |
|
$ |
- |
|
|
$ |
298 |
|
|
Business
acquisition cost in deferred revenue |
|
$ |
- |
|
|
$ |
15 |
|
|
Change in
unrealized gain on short-term investments |
|
$ |
(21 |
) |
|
$ |
15 |
|
|
Wrap Technologies (NASDAQ:WRAP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Wrap Technologies (NASDAQ:WRAP)
Historical Stock Chart
From Apr 2023 to Apr 2024