Wrap Technologies Inc (WRAP) 2022 Q2 法說會逐字稿

Good afternoon, and welcome to the Wrap Technologies' second-quarter 2022 earnings conference call. My name is Paul Manley and I'm Vice President of Investor Relations. Today, our reconstituted management team will discuss this past quarter's performance and provide update on its business assessment and our new multi (technical difficulty). On today's call, I'm joined by Wrap's Chief Executive Officer, TJ Kennedy; Wrap's President, Kevin Mullins; and Wrap's recently appointed Chief Financial Officer, Chris DeAlmeida.

I'd like to remind you that certain statements made during the call today constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities and Litigation Act of 1995 as amended. The forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties are described in our earnings press release and in our filings with the SEC. The forward-looking statements today are made as of the date of this call, and we do not undertake any obligation to update the forward-looking statements.

I will now turn the call over to TJ Kennedy.

Thank you, Paul, and good afternoon, everyone. I'm going to begin by providing a high-level overview of our Q2 activities and results. Chris DeAlmeida, our new CFO, will then discuss our financials before Kevin Mullins and I conclude by detailing management's new strategic roadmap.

Developing a multiyear strategic roadmap that targets growth, profitability, and intense value creation has been amongst our top priorities over the past 90 days. It's important to note that we view 2022 as a transitional year for Wrap, one that we are using for that strong foundation for long-term success.

After recently stepping into our new role, Kevin and I have invested a great deal of our time to conduct a bottoms-up assessment of the company. We have had exhaustive conversations with team members, the customers, distributors, and partners to understand what was working well and what needs to improve.

This process has helped us identify correctable issues and a number of opportunities for optimizing cost structures, improving margins, and accelerating our growth trajectory. Going forward, our new roadmap is going to guide our execution as we work to address legacy issues, capture opportunities, and accelerate our organization's maturation.

Briefly touching on Q2 results, I want to first highlight that operating expense was $5.2 million, representing a 32% decrease year over year. This significant reduction reflects new management's emphasis on implementing effective cost controls and achieving greater operational efficiency.

Revenue was $1.2 million in Q2, reflecting the expected first-half impact of transitioning customers from the BoloWrap 100 to the BoloWrap [150]. The transition had a larger impact on revenue due to the shutdown of the BoloWrap 100 production line prior to producing the next generation device, resulting in delays in getting devices to market.

Despite product challenges, sales headwinds, and lingering COVID-19 restrictions, we were able to achieve a gross margin of 39% in Q2, thanks to cost containment efforts and the early-stage transitions to the higher margin, BoloWrap 150.

During the quarter, we also continued to build more brand awareness in important areas. We grew trained law enforcement agencies to more than 1,130 in Q2, representing 41% year-over-year growth. Certified officer instructors grew to more than 3,660 in the quarter, up 31% from 2021.

Our brand traction validates that Wrap is uniquely positioned to deliver best-in-class technology and data-driven services that [will help] our law enforcement officers across the globe to have safer, more effective encounters with minimal support. New management is acting with urgency and purpose to capitalize on this distinct position.

With that said, I'd like to turn the call over to Chris. We are very excited to have Chris on the team and look forward to working closely with him as we execute on our strategic roadmap.

Thank you, TJ. Good afternoon, everyone. I'm excited to be a part of this new management team and look forward to helping drive future growth for Wrap. Since joining, I've had an opportunity to take a close look at our business model, provide input on a strategic roadmap. I agree with what TJ said that we have a clear opportunity in front of us.

I'd now like to discuss our financial results for the second quarter. During the second quarter of 2022, we generated net revenues of $1.2 million compared to $1.9 million for the prior year period. This includes approximately $200,000 in promotional discounts and incentives during Q2 2022 primarily related to the converting customers to BolaWrap 150.

Gross revenues before such discount for Q2 2022 were $1.4 million. We expect upfront product conversion discounts, which are customary in our industry, to decline after Q3 because we have phased out this upgrade close.

As noted, sales this quarter were largely impacted by the slow transition the BolaWrap 150. This is partially due to the time it takes to introduce for it's essentially a new device to agencies, especially in international geographies. It also take time to work through the approval and training processes to formally move agencies from our historic device to the newest generation.

Additionally, pandemic restrictions and supply chain disruptions have lingered. This leads us to reiterate that near-term sales growth, especially internationally, may be lumpy.

Fortunately, a silver lining is that pending international orders pursued in the second quarter are expected to complete in future quarters. We continue to expect full-year 2022 revenue will increase due to growth in our domestic sales and international orders from our robust pipeline.

Our gross margin for the second quarter was 39% compared to 36% in Q2 of 2021, excluding approximately $700,000 of one-time expenses related to a line change and tradition -- transition to building the BolaWrap 150 in Q2 of 2021. As we stated before, our goal is to achieve 50% gross margins this year.

While this quarter was an improvement over last year, our gross margin this quarter was impacted by lower sales volume as well as working costs and promotional discounts that we anticipate will come down over the next few quarters.

With respect to promotional costs, we incurred $265,000 in the second quarter of 2022. This reflects the cost of demonstrations as well as training product delivered to law enforcement agencies or distributors. This is a decline from $379,000 of promotional costs in the prior year period.

R&D expense for the second quarter of 2022 was $1.5 million as compared to $1.2 million in the prior year period. This increase in R&D costs was a result of increased headcount and consulting costs related to finalizing enhancement and testing for the BolaWrap 150 and investments to improve our virtual reality software. Going forward, we have enacted cost containment initiatives to reduce our R&D spending.

SG&A expense for the second quarter of 2022 was $3.8 million, representing a $2.8 million reduction from Q2 2021 due to the significant cost containment efforts focused on reducing SG&A expense to be more in line with overall sales.

Share-based compensation decreased to $600,000 as compared to $2 million in the prior year period due to the stock price in Q2 as well as certain issuances of in stock in the prior year period.

We expect SG&A expense for the balance of 2022 to remain below the prior year due to massive cost-containment efforts.

Overall, our net loss of $4.8 million for the second quarter of 2022 or $0.12 per share compared to a net loss of $7.8 million for Q2 2021 or a $0.20 loss per share.

Our balance sheet remains strong with approximately $28.5 million of cash and short-term investments to support our growing needs.

With that, I will turn the call over to Kevin to discuss the recent improvements through our go-to market strategy.

Thanks, Chris. As TJ noted at the start of the call, we have spent the past 90 days assessing all facets of Wrap's business model, a key focus of our go-to-market strategy for both the BolaWrap 150 and Wrap Reality. We identified several areas of improvement and have already begun making investments.

The goal for the BolaWrap 150 is to achieve repeatable and predictable sale across domestic and international markets. To do this, we began to expand our sales function while also working to foster stronger relationships with key distributors, which we believe will drive robust, more predictable results.

With respect to sales, we are focusing on increasing sales success and driving more aggressive follow-up. To achieve this, we are moving new customer leads to a dedicated inside-sales function with a regionalized approach. We've also improved how we implement quotas and have developed commission incentives that are better aligned with our overall set of goals.

Additionally, we've initiated weekly pipeline management and sales commit call. This level of structure has created new transparency and accountability throughout our sales operations.

Another key decision in the strategic roadmap was to create a new customer success team, which will be laser focused on retaining and expanding existing customer relationships.

During our assessment, we determined only a marginal percentage of existing partner agency for operating at full deployment. Expansion sales in the public safety vertical, especially with our existing law enforcement agencies are more efficient, predictable, and occur at a faster rate than landing new customers.

We now have a dedicated team and a clear plan to growing our existing customer base while maintaining focus on expansion. We want to be customer obsessed, and we believe that this approach will be a driver of sustainable sales growth over quarters to come.

As previously noted, the transition from the BolaWrap 100 to the BolaWrap 150 caused disruptions in sales. Difficulties with the termination of a product line and a slow ramp up to full production created a negative impact on sales this year.

Momentum with our distribution channel partners was slow through Q2 as the BolaWrap 150 units were delivered, partner sales staff were trained on operation, and new branded marketing material collateral was provided. Thankfully, our channel partners are -- now have the proper training and the resources to market our solutions to drive faster revenue growth.

The transition from the BolaWrap 100 to the BolaWrap 150, we experienced multiple supply chain disruptions, which caused these delays in production of the new generation model. Now that we have identified these issues, we are actively working to mitigate any future delays. We continue to stock long lead parts and have begun to expand the number of suppliers for backup reserve of key components.

We are also focusing on gaining international traction to BolaWrap 150 and expect to see significant improvements to our international sales revenues in Q3 and Q4.

Lastly, we analyze our training programs as part of our strategic review and consider the immense value each provides through our agencies and partners. Based on our review, we decided to begin charging for training services. This decision is consistent with industry standards and has been further validated in discussion with our agency partners who did not raise concerns about this charge.

Building our go-to-market strategy is a fundamental component of our strategic roadmap, and we have given focus to maximizing processes for our future sales success.

And now I'll turn it back over to TJ to discuss key decisions from our strategic roadmap in detail.

Thanks, Kevin. Management has already begun executing on various strategic roadmap initiatives that we believe will support enhanced sales, increased product innovation and diversification, and long-term value creation. I am confident we have the right plan and the right team in place to drive that plan forward.

Our comprehensive roadmap is centered on sustainably growing revenue, driving stronger margins, and supporting long-run profitability. To achieve sustained revenue growth, we made the decision to double-down the BoloWrap 150 as our key product.

We're focused on driving recurring sales in the US, ramping up sales of the new BoloWrap 150 internationally, and implementing a customer success function to help us expand existing agencies to full patrol-wide BoloWrap deployment. In support of these priorities, we have added the inside-sales function Kevin mentioned to improve the number of new qualified leads, and started pursuing additional distributor and partner relationships.

To drive stronger margins and support long-run profitability, our strategic roadmap also accounts for improved pricing on BolaWrap 150 devices and cassettes as well as monetizing our valuable training services.

We did not initially implement a price increase for the BolaWrap 150, which includes significant upgrades and is a higher-margin product than the BolaWrap 100. This is being adjusted in the immediate term with a plan to continue building incremental increases into our pricing structure for future releases.

On the training front, we have proven the importance of these services and we'll begin charging accordingly. We also reviewed Wrap Reality closely and identified that much of the implementation around sales have yet to be captured.

We looked at the various sales and support models and have now made improvements to how we sell Wrap Reality, resulting in new wins, which has solidified our virtual reality offering as a SaaS model going forward. We have developed a detailed sales plan for Wrap Reality and have put in place key leadership to successfully operate our SaaS business.

We have made many of the changes referenced above with urgency and purpose. We are confident that the new initiatives from our strategic roadmap will become increasingly evident in the quarters to come.

Our commitment to action and cost reduction should be evidenced by the 32% reduction in operating expenses achieved in the second quarter referenced earlier. Rightsizing our operating expenses remains a major priority in the strategic roadmap for management, and we expect to continue to focus on reducing cash burn for future quarters.

We have made significant improvements to expenses across employees, contractors, travel, and consultants to ensure our long-term success and to accelerate our journey to becoming a profitable business. This leaner structure will allow us to be nimble, preserve our cash on hand, and keep us close to our customers and our partners.

In addition to the initiatives I've already touched on, I want to highlight some of the other important changes. We have implemented our mission, vision, and core values. We have made the decision to deliver the BolaWrap 150 to the marketplace for the next five to 10 years to give certainty to our customers and our distributors.

We will be innovating new products through our R&D efforts, but these will be additive to the BolaWrap 150 and not replace it to avoid getting into any revenue or longevity issues that occurred with the BolaWrap 100 to 150 transition. We believe these strategic roadmap decisions have created a new long-term, sustainable business model for Wrap and will drive positive change throughout our organization.

So to reiterate, the outcome of our assessment for Wrap strategic roadmap: we are a stable business in a market that has demand for non-lethal and non-injurious restraint solutions for public safety. We continue to reduce OpEx significantly and expect our cash burn to continue to improve.

We do not believe we need to raise additional capital to fund ongoing operations for the long term. We have improved our go-to-market approach to drive repeatability, and we are in a transition year, but expect to drive continued success to breakeven by the end of 2023.

By containing costs, optimizing pricing, and sustaining sales growth, we expect to reduce losses and improve cash flow. We believe we have a viable path to reaching that breakeven position by the end of 2023 and potentially achieving profitability by the end of 2024.

In addition to the specific initial initiatives developed, we now have a clearer sense of the whitespace Wrap fills in the force continue. The portion of the less lethal market were BoloWrap excels has little competition. It is also the area of everyday policing that most emergency calls for service take place.

BoloWrap is now considered by many departments as not elevating to the level of a higher level of use of force, and usage is rewarded as force avoidance or prevention. The prevention, of course, by using BolaWrap and the leveraging of Wrap Reality to train officers through virtual reality simulation training is the future of law enforcement.

Wrap Reality simulations run the gamut, from working through verbal commands and efforts around de-escalation through the use of BolaWrap and handcuffs, and all the way up to the use of multiple different firearms. We are proud to be a leader in the market of virtual reality training for law enforcement, corrections, and societal reentry. This further reinforces that we are uniquely positioned to deliver best-in-class technologies, software, and services that can help change and improve the future of law enforcement across the world.

After being here for a few months, I can tell you why I'm more optimistic and excited about the enormous market opportunity for Wrap. With our strategic roadmap in place, I am determined to lead us through this transformative period and establish a foundation for long-term success.

I will now turn the call back over to Paul to facilitate the Q&A.

Thank you, TJ. We will now take questions from our three covering analysts. We will start with Greg Gibas from Northland Capital Markets. Please go ahead, Greg.

Hey, good afternoon, TJ, Chris, and Kevin. Thanks for taking the questions. Okay. Also kind of thanks for the commentary on the new strategic roadmap and outlook.

If I could kind of follow up on that. First, you mentioned expecting a cash flow breakeven by the end of 2023, profitability breakeven by the end of 2024. Wondering, I guess, maybe what your estimate of the sales you would need to achieve those two milestones would be?

Sure. I'll go ahead and answer that. As we move forward, we believe at the end of next year, getting to sales that are around $5 million a quarter or slightly better are going to greatly help us get to that breakeven element. We're keeping our operating expenses very much focused and continuing to reduce operating expenses below that $5 million mark as we go forward.

So we think that's a good place to target. Obviously, our quarterly revenue would grow to $6 million or $7 million. And with better margins as we move forward, we believe that that will give us a good annualized future size of the company that will be profitable by the end of 2024 under -- where we're driving right now. And we're not putting this out of guidance, but it's certainly what we're striving for.

Great. Yeah, fully understood. Very helpful. And I wanted to congratulate you on the new international sale that you press released as well, a new customer base in the Middle East. But wondering if you could maybe comment on the relative size of that order, the size of the organization, and maybe whether you think there will be additional sales from that customer?

Yes, great question. Definitely, you know, a six-figure sale or it. But at the end of the day, it's a very large customer, very large agency nationwide. And we believe that it has a lot of sales volume to be had in the future. So this was the initial rollout.

One of the things with these large international customers are often very slow to get under contract, to the point we've got to with this customer here to become our 54th international customer out there. But once they are under contract, one of the things we're really going to focus on is expanding them and being able to grow in some of these agencies that are extremely large compared to most US police departments. That give us a lot of runway in the future for long-term growth.

Great. And I guess just a follow-up there, would that -- would you recognize that sales all in Q3? Or do you expect that kind of being a multi-quarter delivery timing? How you're thinking about that?

We think about that one being in Q3, and future sales would be in future quarters as we go forward.

Okay, great. I guess just last one for me. I wanted to turn -- maybe focus towards the domestic policing departments. And maybe get an understanding of maybe the percentage of departments that have been introduced to the BolaWrap or at least that you've kind of gotten in front of to date. You know, I know there's no maybe exact number, but I'm just trying to get a sense of maybe your penetration or kind of mind share there.

Yes. So today, when you look at the domestic police agencies that we have that are currently using Bola or Bola-deployed in one fashion or another, we're over 800 agencies. There's about 18,000 US police departments. So if you look at that, it's just under 4.5% that we currently have product in.

As far as the ones we presented to beyond that, it probably, as you know, two times that number. So at the end of the day, we presented the 10% or 15%. Some of these are still in a buying process. Although the US buying process is typically much faster than international, it can still be a lengthy process that can go on for 90 or 180 days or more.

I do think we have a very big addressable market in the US both to continue to expand into. But even on top of that, with the agencies we were in today, the 800-plus, one of the things we determined under the strategic roadmap is we need to do a more thorough job of working to expand them to full deployment, where all patrol officers in the field are equipped with a BolaWrap device.

And to do that, we think that's a little bit more low-hanging fruit, to be able to have a broader expansion that happens and moving them from, say, 20% of the department or 30% of the department to a full deployment across that department for all officers out in the field.

Okay. Makes sense. Thanks, guys. Appreciate it.

Thank you very much, Greg.

We'll now move on to Allen Klee from the Maxim Group. Please go ahead, Allen.

Yes, hi. Could you -- I thought I heard you mention something that you're still trying to get to 50% gross margin by the end of this year. Can -- are you confident in that? And talk to me about kind of what the steps are that are going to get you there.

Good question, Allen. And we are confident in that because the better margins that we have on the BolaWrap 150 lead us to believe that we will be 50%-plus by the end of the year. We have been definitely hit on those margins when it comes to the amount of discounts that we've had related to trade-ins for the most part. Trade-ins certainly are significant impact on that.

At the end of the day, we do believe once those trade-ins work off -- and I think Q3 will still have a significant number of trade-ins. But in Q4, we think that the trade-ins will diminish. We actually ended our trade-in discount program at the end of Q2. We have honored those into Q3 that already had proposals in front of them to do some trade-in. So we know we'll have more here in Q3.

But we believe the trade-ins are going to subside. And when they do, that higher margin products should be producing 50%-plus. So that's why we have some confidence in that, our cost to produce that is less and it is a higher-margin product.

Great. Can you give us some -- any commentary on the larger agencies in the US? What the status is of penetrating them?

Yes, we've continued to penetrate additional major cities in the US. The Major Cities Chiefs Association, MCCA, is where we kind of measure what the large metro agency here in the US. Two notable ones that we added here in the past quarter: Fairfax County Police Department was added and we've had another one added here in Q3.

So we continue to add to some of the larger departments that are certainly growing sizes and certainly in the top 75 police departments in the US. And we'll continue to look at how do we drive those to greater deployment even from that initial deployment that we have. So it's an exciting time for us as these departments continue to come onto the BoloWrap family and also in Wrap Reality, where we're able to deploy more of a virtual reality with them as well.

Maybe a follow-up on that is: any update on the LAPD trial?

LAPD trial continues. And we'll hopefully have more in the not-too distant future on that. But I will say very positive interactions with LAPD and been supporting them in that trial for the next phase of that that will be coming up. So don't have a lot to announce today, except for its moving forward and should have more in the next month or so.

Great. My last question is international. You didn't really sell anything material in this current quarter. Do you feel that the market has opened up in terms of being able to travel and to most of the places in that? How do you think about the timing? I mean, you just announced an order today, but just in general, the timing of international picking up.

Yeah. Good question. Definitely travel has hurt us on the international side. Also, the BolaWrap 100 to 150 transition, many of those agencies were on BolaWrap 100. So transitioning to the 150 has also taken some time.

I do believe here later in Q3 and in Q4, we'll see more of those coming to fruition because travel did open up in 2022. The end of 2021 was difficult, especially Q4. APAC just opened up in the past few weeks with New Zealand, Australia, and some others that were having a lot of travel restrictions. So some of that that just opened up will take longer for us to be able to get face-to-face and present to them. So it's not gone as far as the headwinds around COVID-related travel.

One other thing is we have had sales team members that have been impacted by COVID. Even in the last two weeks, it continues to hit our workforce and we have them staying home at times when that happens. And so we do have a small workforce. So when that happens, we have some folks off the road.

But long term, I do believe that the international travel for us has opened back up. You're seeing the additional sales into the Middle East. That's an area that's quite strong for us as well as EMEA, and we'll continue to push that overall.

Great. Thank you so much.

Thank you very much, Allen.

Our final analyst is Jon Hickman from Ladenburg Thalmann. Please go ahead, Jon.

Jon, I think you might be muted. Can you check your phone?

Can you hear me now?

Yes. Please go ahead. Thank you.

Okay. So most of my questions have been answered, but I was wondering if you could talk a little bit about the inside sales force, how that's going to work there. You say these guys are going to follow up on leads? Can you elaborate?

Absolutely. Yes. I'm going to have Kevin Mullins who's going to talk about what we've done there. Go ahead, Kevin.

Sure. So what we've done building the inside sales structure, and so really doing outbound as well as inbound really kind of managing the lead process. So we marry that, that group with our regional sales leaders that are out there. And so being able to kind of -- as these leads are coming in, being able to properly kind of transition, though, that we run them through the sales funnel.

I mean, something that we really never had before. It was a very more of a horizontal process. And now we've built scalability in that, making it more vertical and then also working directly with those channel partners out there. And so we've done a lot on the channel partner side, looking at the distributors, looking at metrics, how they perform, and how we can make that process easier, smoother, and ultimately allowing us to be able to scale.

So who are they talking to at an agency?

So typically it can vary from agency size, the different demographics that are out there, those leads coming in. We have a lot of leads coming in, and we've never really had a lead problem. It's just being able to follow up and being able to drive that lead all the way through the sales (technical difficulty).

So maybe from anywhere -- from an offer, they had an inquiry on it. We're getting a lot of inbound leads coming from the different types of events that we do, different types of webinars, outreaches that we have, coming through our website. So it will vary. But again, we do not feel we have encountered any [problems].

One example, Jon, this week, if I could add to that, is that we had a chief call earlier this week, who definitely was excited to embrace BoloWrap, have it be part of their department. And it was actually the chief himself who called. He had budget in place and he had seen some local news about another department that had purchased BoloWrap recently, and that was driving him to reach out and get a quote to equip his agency.

And so it's everyone, from the chief on down to an individual officer. More often than not, it's part of the department that's focused on less-than-lethal weapons and specifically making sure that the right equipment is in the hands of officers in the field.

Okay. My last question has to do with cartridge sales versus devices. Can you break that down a little bit? Or is there any statistics around repeat purchases of cartridges?

Sure. As we look at the cartridge sales and device sales and they continue to grow over time, we recommend typically to a new department that they would deploy 12 cartridges or purchase 12 cartridges when they purchase device. Six for training, six for in-field use. And then of course, those cartridges have to be replaced over time.

So as we look from a sheer number standpoint, cartridges are always going to -- or cassettes are actually always going to be way outweigh from the device standpoint.

As we look at Q2, it was relatively flat compared to Q1. We do anticipate that those sales will continue to drive higher as we go throughout the year, particularly some of the international stuff. And then with all the focuses we're making on the domestic side, that that will continue to grow as we move through 2023.

So do you have any -- I mean I know you give us -- occasionally, you'll send out press release with a use case, an agency somewhere around the states. Do you have any statistics at all on how many use cases they're getting on a weekly basis? Anything like that?

One of the things that's hard is there's no mandatory reporting to us to how often is a device used in the field. We do have some departments that do provide body-worn video to us. Often, this is delayed for prosecution or for evidence purposes or other things. Sometimes it's a little more recent, especially if they're dealing with, you know, an individual in crisis, and it's not necessarily a criminal; it's a protective custody event.

But we also don't get them from all departments. Everybody has different rules and regulations around; others report. Some of our agencies are very proactive and some others are not. Without an electronic notification to know that how often a device is being used, we mostly are going off of agency self-reporting.

We do try to share those use cases just to show the different ways it's being utilized. I think you've seen in the past few weeks, we put out BolaWraps that have been done around the torso and the arms, ones have been done around the legs, ones have been done in bad weather, in good weather. We try to share where we can.

We also have different videos we use in training with the officers to really just help them understand what the use cases are, but we are seeing a broad amount of deployment.

One of the things you've noticed in what I discuss today was just we're seeing a push for departments to use it earlier in the interaction. Many of our interactions today, BoloWrap actually gets deployed in the first one, two, or three minutes of a call because they're trying to prevent it from escalating into something more serious.

And so I think as we see more of these interactions that happen earlier in the interaction before it escalates, we're going to see, A, more usage in general; and B, we're going to see usage that hopefully prevents it from going into any other further use of force down the road. So this is super important for us.

Okay. Thanks. Appreciate your answers.

All right. Thank you, Jon, and thanks again to each one of you, analysts, that are writing research on it. We really appreciate your support.

With that, I'm going to turn the call back over to TJ for his closing comments.

I just want to end today's call with my excitement to have the additional management team in place here today. It's great to have Chris on board and joining our team. And also just that after the first 90 days of building a strategic roadmap, we have spent countless hours listening to our employees, our customers, our distributors, our partners, a lot of time with agencies talking about the key factors around the strategic roadmap and getting feedback before we went final on that and rolled it out across the company in the past week.

And really important as we move forward that we're going to continue to listen to those customers and partners and distributors as well as our team as we go ahead. And I am more excited today than I ever have been because of the opportunity that is sitting in front of us for Wrap.

If I look back to when Kevin and I came on board in late April to where we are today and the changes that we've already implemented in the first few months, I really believe this is going to be an exciting time for us this year of 2022 and this transition and how much of an impact, I think, that will have over the next four to eight quarters is just going to be dramatic.

I think when we are able to see the results of this driving us forward that the opportunities are there for Wrap. The market in public safety is seeking not only BoloWrap, but Wrap Reality. And having the ability to have both of those tools that focus on preventing escalation, they focus on deescalating situations and avoiding injury does not only help us save lives, it also allows us to save careers, and save the careers of those law enforcement officers who have additional options now on their belt to be able to make such a difference and such an impact in the lives of the citizens that they serve each day.

So with that, I just want to wrap up that I think the opportunity ahead of us is tremendous. I'm super excited to be here and really excited to work with the Wrap team as we go forward, being able to meet the needs of law enforcement globally and saving lives and saving careers.