Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 09, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-55838 | |
Entity Registrant Name | Wrap Technologies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-0551945 | |
Entity Address, Address Line One | 1817 W 4th Street | |
Entity Address, City or Town | Tempe | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85281 | |
City Area Code | 800 | |
Local Phone Number | 583-2652 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | WRAP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 41,968,389 | |
Entity Central Index Key | 0001702924 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 11,688 | $ 5,330 |
Short-term investments | 6,500 | 13,949 |
Accounts receivable and contract assets, net | 1,949 | 2,830 |
Inventories, net | 6,520 | 3,975 |
Prepaid expenses and other current assets | 722 | 775 |
Total current assets | 27,379 | 26,859 |
Property and equipment, net | 588 | 758 |
Operating lease right-of-use asset, net | 232 | 285 |
Intangible assets, net | 2,588 | 2,569 |
Other assets | 69 | 100 |
Total assets | 30,856 | 30,571 |
Current liabilities: | ||
Accounts payable | 1,928 | 1,419 |
Accrued liabilities | 8,562 | 1,463 |
Customer deposits | 3 | 0 |
Deferred revenue- short term | 211 | 166 |
Operating lease liability - short term | 113 | 108 |
Total current liabilities | 10,817 | 3,156 |
Long-term liabilities: | ||
Deferred revenue- long term | 129 | 167 |
Operating lease liability - long term | 135 | 193 |
Total long-term liabilities | 264 | 360 |
Total liabilities | 11,081 | 3,516 |
Stockholders' equity: | ||
Preferred stock - 5,000,000 authorized; par value $0.0001 per share; none issued and outstanding | 0 | 0 |
Common stock - 150,000,000 authorized; par value $0.0001 per share; 41,986,952 and 41,175,993 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 4 | 4 |
Additional paid-in capital | 96,182 | 94,333 |
Accumulated deficit | (76,411) | (67,376) |
Accumulated other comprehensive loss | 0 | 94 |
Total stockholders' equity | 19,775 | 27,055 |
Total liabilities and stockholders' equity | $ 30,856 | $ 30,571 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued (in shares) | 41,910,687 | 41,175,993 |
Common stock, shares outstanding (in shares) | 41,910,687 | 41,175,993 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Product sales | $ 1,034 | $ 969 | $ 1,650 | $ 2,431 |
Other revenue | 168 | 196 | 263 | 333 |
Total revenues | 1,202 | 1,165 | 1,913 | 2,764 |
Cost of revenues | 534 | 708 | 893 | 1,640 |
Gross profit | 668 | 457 | 1,020 | 1,124 |
Operating expenses: | ||||
Selling, general and administrative | 4,745 | 3,764 | 8,286 | 8,370 |
Research and development | 1,002 | 1,476 | 2,073 | 2,971 |
Total operating expenses | 5,747 | 5,240 | 10,359 | 11,341 |
Loss from operations | (5,079) | (4,783) | (9,339) | (10,217) |
Other income (expense): | ||||
Interest income | 88 | 0 | 324 | 2 |
Other | (16) | (2) | (20) | (2) |
Total other income (expense) | 72 | (2) | 304 | 0 |
Net loss | $ (5,007) | $ (4,785) | $ (9,035) | $ (10,217) |
Net loss per basic and diluted common share (in dollars per share) | $ (0.12) | $ (0.12) | $ (0.22) | $ (0.25) |
Weighted average common shares used to compute net loss per basic and diluted common share (in shares) | 41,709,718 | 40,978,820 | 41,483,669 | 40,943,241 |
Comprehensive loss: | ||||
Net loss | $ (5,007) | $ (4,785) | $ (9,035) | $ (10,217) |
Net unrealized gain (loss) on short-term investments | 0 | 12 | 0 | (11) |
Comprehensive loss | $ (5,007) | $ (4,773) | $ (9,035) | $ (10,228) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance (in shares) at Dec. 31, 2021 | 40,851,945 | ||||
Balance at Dec. 31, 2021 | $ 4,000 | $ 91,025,000 | $ (49,759,000) | $ (6,000) | $ 41,264,000 |
Common shares issued upon exercise of stock options (in shares) | 50,000 | ||||
Common shares issued upon exercise of stock options | $ 0 | 75,000 | 0 | 0 | 75,000 |
Share-based compensation expense | $ 0 | 1,756,000 | 0 | 0 | 1,756,000 |
Common shares issued upon vesting of restricted stock units (in shares) | 90,216 | ||||
Net loss for the period | $ 0 | 0 | (10,217,000) | 0 | (10,217,000) |
Net unrealized gain (loss) on short-term investments | $ 0 | 0 | 0 | (11,000) | (11,000) |
Common shares issued for services (in shares) | 0 | ||||
Common shares issued for services | $ 0 | 0 | 0 | 0 | 0 |
Balance (in shares) at Jun. 30, 2022 | 40,992,161 | ||||
Balance at Jun. 30, 2022 | $ 4,000 | 92,856,000 | (59,976,000) | (17,000) | 32,867,000 |
Balance (in shares) at Mar. 31, 2022 | 40,951,197 | ||||
Balance at Mar. 31, 2022 | $ 4,000 | 92,129,000 | (55,191,000) | (29,000) | 36,913,000 |
Share-based compensation expense | $ 0 | 727,000 | 0 | 0 | 727,000 |
Common shares issued upon vesting of restricted stock units (in shares) | 40,964 | ||||
Net loss for the period | $ 0 | 0 | (4,785,000) | 0 | (4,785,000) |
Net unrealized gain (loss) on short-term investments | $ 0 | 0 | 0 | 12,000 | 12,000 |
Balance (in shares) at Jun. 30, 2022 | 40,992,161 | ||||
Balance at Jun. 30, 2022 | $ 4,000 | 92,856,000 | (59,976,000) | (17,000) | 32,867,000 |
Balance (in shares) at Dec. 31, 2022 | 41,175,993 | ||||
Balance at Dec. 31, 2022 | $ 4,000 | 94,333,000 | (67,376,000) | 94,000 | $ 27,055,000 |
Common shares issued upon exercise of stock options (in shares) | 250 | 250 | |||
Common shares issued upon exercise of stock options | $ 0 | 0 | 0 | 0 | $ 0 |
Share-based compensation expense | $ 0 | 1,849,000 | 0 | 0 | 1,849,000 |
Common shares issued upon vesting of restricted stock units (in shares) | 734,444 | ||||
Common shares issued upon vesting of restricted stock units | $ 0 | 0 | 0 | 0 | 0 |
Net loss for the period | 0 | 0 | (9,035,000) | 0 | (9,035,000) |
Settlement – US Treasury bills | $ 0 | 0 | 0 | (94,000) | (94,000) |
Net unrealized gain (loss) on short-term investments | 0 | ||||
Balance (in shares) at Jun. 30, 2023 | 41,910,687 | ||||
Balance at Jun. 30, 2023 | $ 4,000 | 96,182,000 | (76,411,000) | 0 | 19,775,000 |
Balance (in shares) at Mar. 31, 2023 | 41,270,300 | ||||
Balance at Mar. 31, 2023 | $ 4,000 | 94,961,000 | (71,404,000) | 0 | 23,561,000 |
Common shares issued upon exercise of stock options (in shares) | 0 | ||||
Common shares issued upon exercise of stock options | $ 0 | 0 | 0 | 0 | 0 |
Share-based compensation expense | $ 0 | 1,221,000 | 0 | 0 | 1,221,000 |
Common shares issued upon vesting of restricted stock units (in shares) | 640,387 | ||||
Common shares issued upon vesting of restricted stock units | $ 0 | 0 | 0 | 0 | 0 |
Net loss for the period | $ 0 | 0 | (5,007,000) | 0 | (5,007,000) |
Net unrealized gain (loss) on short-term investments | 0 | ||||
Balance (in shares) at Jun. 30, 2023 | 41,910,687 | ||||
Balance at Jun. 30, 2023 | $ 4,000 | $ 96,182,000 | $ (76,411,000) | $ 0 | $ 19,775,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (9,035) | $ (10,217) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 403 | 380 |
Share-based compensation | 1,849 | 1,756 |
Warranty provision | (44) | 45 |
Non-cash lease expense | 53 | 49 |
Provision for doubtful accounts | (4) | 8 |
Changes in assets and liabilities: | ||
Accounts receivable | 884 | 2,446 |
Inventories | (2,545) | (467) |
Prepaid expenses and other current assets | 53 | 168 |
Accounts payable | 508 | (417) |
Operating lease liability | (52) | (41) |
Customer deposits | 3 | (39) |
Accrued liabilities and other | 7,149 | 106 |
Warranty settlement | (6) | (63) |
Deferred revenue | 8 | 79 |
Net cash used in operating activities | (776) | (6,207) |
Cash Flows From Investing Activities: | ||
Purchase of short-term investments | (2,645) | (14,890) |
Proceeds from maturities of short-term investments | 10,000 | 20,000 |
Capital expenditures for property and equipment | (66) | (168) |
Investment in long-term deposits | 0 | (2) |
Proceeds from long-term deposits | 31 | 0 |
Net cash provided by investing activities | 7,134 | 4,838 |
Cash Flows From Financing Activities: | ||
Proceeds from exercise of stock options | 0 | 75 |
Net cash provided by financing activities | 0 | 75 |
Net decrease in cash and cash equivalents | 6,358 | (1,294) |
Cash and cash equivalents, beginning of period | 5,330 | 4,937 |
Cash and cash equivalents, end of period | 11,688 | 3,643 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
Change in unrealized gain on short-term investments | (94) | (11) |
Right-of-use asset and liability recorded during period | 0 | 335 |
Patents and Trademarks [Member] | ||
Cash Flows From Investing Activities: | ||
Purchase of intangible assets | (176) | (102) |
Intangibles Other than Patents and Trademarks [Member] | ||
Cash Flows From Investing Activities: | ||
Purchase of intangible assets | $ (10) | $ 0 |
Note 1 - Organization and Summa
Note 1 - Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Business Description Wrap Technologies, Inc., a Delaware corporation (the “ Company we us our Common Stock Nasdaq Basis of Presentation The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“ SEC U.S. GAAP Annual Report Where necessary, the prior year’s information has been reclassified to conform to the current year presentation. Principles of Consolidation The Company has one VR Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (e.g., stock-based compensation valuation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty reserve, accrued expense and recognition and measurement of contingencies) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenue and expense during the reporting period. Actual results could materially differ from those estimates. Loss per Share Basic loss per common share is computed by dividing net loss for the period by the weighted-average number of shares of Common Stock outstanding during the period. Diluted net loss per Common Share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential Common Stock instruments outstanding to be antidilutive. Stock options and restricted stock units exercisable or issuable for a total of 4,117,586 and 6,458,823 shares of Common Stock were outstanding at June 30, 2023, and 2022, respectively. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company. Recent Issued Accounting Guidance The Company has reviewed recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations. |
Note 2 - Revenue and Product Co
Note 2 - Revenue and Product Costs | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | 2. REVENUE AND PRODUCT COSTS Revenue consists of product revenue and other revenue. Product sales include BolaWrap products and accessories. Other revenue includes VR revenue, service, training and shipping revenue. Periodically, certain customers request bill and hold transactions for future delivery as scheduled and designated by them. In such cases, revenue is not recognized until after control, title and risk of ownership has transferred which is generally when the customer has requested such transaction under normal billing and payment terms and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed quality control inspections, and (iii) has been tagged and packed for shipment, separated from other inventory and ready for physical transfer to the customer. The value associated with custodial storage services is deemed immaterial in the context of such contracts and in total, and accordingly, none of the transaction price is allocated to such service. The timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally has an unconditional right to consideration when customers are invoiced, and a receivable is recorded. A contract asset is recognized when revenue is recognized prior to invoicing, or a contract liability (deferred revenue) when revenue will be recognized subsequent to invoicing. The Company recognizes an asset if there are incremental costs of obtaining a contract with a customer such as commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract. The Company may receive consideration, per terms of a contract, from customers prior to transferring goods to the customer. The Company records customer deposits as a contract liability. Additionally, the Company may receive payments, most typically for service and warranty contracts, at the onset of the contract and before the services have been performed. In such instances, a deferred revenue liability is recorded. The Company recognizes these contract liabilities as revenue after all revenue recognition criteria are met. The table below details the activity in our contract liabilities during the six months ended June 30, 2023. Customer Deferred Deposits Revenue Balance at January 1, 2023 $ - $ 333 Additions, net 3 124 Transfer to revenue - (117 ) Balance at June 30, 2023 $ 3 $ 340 Current portion $ 3 $ 211 Long-term portion $ - $ 129 At June 30, 2023, the Company’s deferred revenue of $340 consisted of $217 related to VR, $17 related to training and $106 related to BolaWrap extended warranties and services. At December 31, 2022, the Company’s deferred revenue of $333 consisted of $198 related to VR, $11 related to training and $124 related to BolaWrap extended warranties and services. Estimated costs for the Company’s standard warranty, generally one-year, are charged to cost of products sold when revenue is recorded for the related product. Royalties are also charged to cost of products sold. |
Note 3 - Financial Instruments
Note 3 - Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 3. FINANCIAL INSTRUMENTS Assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets and assets and liabilities measured at fair value on a non-recurring basis or disclosed at fair value, are categorized based upon the level of judgment associated with inputs used to measure their fair values. The accounting guidance for fair value provides a framework for measuring fair value and requires certain disclosures about how fair value is determined. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance also establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1 Level 2 Level 3 The Company’s cash equivalent Money Market Funds and short-term investments consisting of U.S. Treasury bill securities and Certificate of Deposits are classified as Level 1 because they are valued using quoted market prices. The following table shows the Company’s cash and cash equivalents, Money Market Funds and short-term investments by significant investment category as of June 30, 2023, and December 31, 2022. As of June 30, 2023 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 2,774 $ - $ - $ 2,774 U.S. Treasury securities in short-term investments - - - - Certificate of Deposits 6,500 - - 6,500 Total Financial Assets $ 9,274 $ - $ - $ 9,274 As of December 31, 2022 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 3,004 $ - $ - $ 3,004 U.S. Treasury securities in short-term investments 9,849 100 - 9,949 Certificate of Deposits 4,000 - - 4,000 Total Financial Assets $ 16,853 $ 100 $ - $ 16,953 Unrealized gains or losses resulting from our short-term investments are recorded in accumulated other comprehensive gain or loss as they are classified as available for sale. During the three and six months ended June 30, 2023, a $0 gain and $0 loss was recorded to accumulated other comprehensive gain (loss), respectively. During the three and six months ended June 30, 2022, a $12 gain and $11 loss was recorded to accumulated other comprehensive gain (loss), respectively. Our financial instruments also include accounts receivable, accounts payable, accrued liabilities and business acquisition liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. |
Note 4 - Inventories
Note 4 - Inventories | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 4. INVENTORIES Inventory is recorded at the lower of cost or net realizable value. The cost of substantially all the Company’s inventory is determined by the FIFO cost method. Inventories consisted of the following: June 30, 2023 December 31, 2022 Finished goods $ 3,793 $ 2,293 Work in process - - Raw materials 2,727 1,682 Inventories - net $ 6,520 $ 3,975 |
Note 5 - Property and Equipment
Note 5 - Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | 5. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: June 30, 2023 December 31, 2022 Production and lab equipment $ 506 $ 513 Tooling 490 448 Computer equipment 561 531 Furniture, fixtures and improvements 181 181 1,738 1,673 Accumulated depreciation (1,150 ) (915 ) Property and equipment, net $ 588 $ 758 Depreciation expense was $118 and $236 for the three and six months ended June 30, 2023, respectively, and $124 and $237 for the three and six months ended June 30, 2022, respectively. |
Note 6 - Intangible Assets, Net
Note 6 - Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | 6. INTANGIBLE ASSETS, NET Intangible assets consisted of the following: June 30, 2023 December 31, 2022 Amortizable intangible assets: Patents $ 744 $ 575 Trademarks 157 150 Purchased software 1,962 1,962 2,863 2,687 Accumulated amortization (629 ) (462 ) Total amortizable 2,234 2,225 Indefinite life assets (non-amortizable) 354 344 Total intangible assets, net $ 2,588 $ 2,569 Amortization expense was $85 and $167 for the three and six months ended June 30, 2023, respectively, and $73 and $143 for the three and six months ended June 30, 2022, respectively. At June 30, 2023, future amortization expense is as follows: 2023 (9 months) $ 259 2024 518 2025 513 2026 290 2027 42 Thereafter 612 Total estimated amortization expense $ 2,234 |
Note 7 - Accounts Payable and A
Note 7 - Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable includes $40 and $127 due to related party Syzygy Licensing, LLC (“ Syzygy The Company consummated an offering of Series A Convertible Preferred Stock and Warrants (“ Offering Accrued liabilities consist of the following: June 30, 2023 December 31, 2022 Patent and legal costs $ 103 $ 135 Accrued compensation 777 1,100 Warranty costs 75 125 Pre-funding of the sale of shares, preferred stock and warrants 7,350 - Taxes and other 257 103 Total $ 8,562 $ 1,463 Accrued compensation includes $80 and $1,022 in employee bonuses and commissions payable at June 30, 2023 and December 31, 2022, respectively. Changes in our estimated product warranty costs were as follows: Six Months Ended June 30, 2023 2022 Balance, beginning of period $ 125 $ 96 Warranty settlements (6 ) (63 ) Warranty provision (44 ) 45 Balance, end of period $ 75 $ 78 |
Note 8 - Stockholders' Equity
Note 8 - Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Equity [Text Block] | 8. STOCKHOLDERS' EQUITY The Company’s authorized capital consists of 150,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.0001 per share (“ Preferred Stock |
Note 9 - Share-based Compensati
Note 9 - Share-based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | 9. SHARE-BASED COMPENSATION On March 31, 2017 , Plan , The Company generally recognizes share-based compensation expense on the grant date and over the period of vesting or period that services will be provided. In April 2023 the Company recognized severance acceleration of $178 of share-based compensation expense resulting from the resignation of the Company’s Chief Executive Officer and Chief Operating Officer due to a reduction in force that resulted in changes in the composition of the executives of the Company. In January 2022 the Company recognized severance acceleration of $242 of share-based compensation expense resulting from the resignation of the Company’s Chief Executive Officer as part of a management transition plan. Stock Options The following table summarizes stock option activity for the six months ended June 30, 2023: Weighted Average Options on Common Shares Exercise Price Remaining Contractual Term Aggregate Intrinsic Value Outstanding January 1, 2023 5,491,399 $ 3.72 5.96 $ 92 Granted 60,000 $ 1.34 Exercised (250 ) $ 1.5 Forfeited, cancelled, expired (1,982,900 ) $ 4.14 Outstanding June 30, 2023 3,568,249 $ 3.37 8.08 $ 7 Exercisable June 30, 2023 1,052,714 $ 4.56 6.79 $ 0 At June 30, 2023, there were 1,954,019 service-based stock options outstanding, and 1,614,230 performance-based stock options outstanding, which performance-based stock options were granted in April 2022 to the Company’s former Chief Executive Officer and President, subject to future market capitalization targets. 1,049,145 of the 3,568,249 stock options granted included in the table above were granted in April 2022 outside the Plan as an employment inducement grant, but are subject to the terms and conditions of the Plan. The Company uses the Black-Scholes option pricing model to determine the fair value of service-based options granted. The following table summarizes the assumptions used to compute the fair value of options granted to employees and non-employees: For the Six Months Ended June 30, 2023 2022 Expected stock price volatility 49 % 49 % Risk-free interest rate 3.64 % 1.09 % Expected life of options 6.66 1.82 Weighted-average fair value of options granted $ 0.55 $ 1.32 Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of awards. The Company’s estimated volatility was based on an average of the historical volatility of peer entities whose stock prices were publicly available. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price. The Company records forfeitures as they are incurred. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options. The dividend yield of zero The Company used the Monte Carlo Simulation Model to value at the grant date the aggregate of 1,614,230 market condition performance options granted in April 2022 to the Company’s former Chief Executive Officer and President. The assumptions used in the Monte Carlo Simulation were stock price on date of grant of $2.89, contract term of 10 years, expected volatility of 49% and risk-free interest rate of 2.9%. Vesting is based on sustained market capitalization of $250 million, $500 million and $1 billion and resulted in implied service periods ranging from approximately 4 to 7 years. Stock option expense was $255 and $567 for the three and six months ended June 30, 2023, respectively, and $408 and $1,145 for the three and six months ended June 30, 2022, respectively. Restricted Stock Units The Plan provides for the grant of restricted stock units (“ RSUs Service-Based RSU's Weighted Average Grant Date Fair Value Weighted Average Vesting Period (Years) Unvested at January 1, 2023 922,057 $ 2.88 2.11 Granted - service based 625,896 $ 1.31 Vested (734,444 ) $ 2.87 Forfeited and cancelled (264,172 ) $ 2.49 Unvested at June 30, 2023 549,337 $ 2.03 1.88 RSU expense was $966 and $1,282 for the three and six months ended June 30, 2023, respectively, and $319 and $611 for the three and six months ended June 30, 2022, respectively. Share-Based Compensation Expense The Company recorded share-based compensation for options and RSUs in its statements of operations for the relevant periods as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Selling, general and administrative $ 990 $ 591 $ 1,552 $ 1,485 Research and development 231 136 297 271 Total share-based expense $ 1,221 $ 727 $ 1,849 $ 1,756 As of June 30, 2023, total estimated compensation cost of stock options granted and outstanding but not yet vested was $2,609 which is expected to be recognized over the weighted average period of 3.12 years. As of June 30, 2023, total estimated compensation cost of RSUs granted and outstanding but not yet vested was $1,115 which is expected to be recognized over the weighted average period of 1.82 years. |
Note 10 - Defined Contribution
Note 10 - Defined Contribution Plan | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Defined Contribution Plan [Text Block] | 10. DEFINED CONTRIBUTION PLAN The Company has a defined contribution savings plan for all eligible U.S. employees established under the provisions of Section 401(k) of the Internal Revenue Code. This plan was formed on January 1, 2022. Eligible employees may contribute a percentage of their salary subject to certain limitations. The Company’s contributions for each of the three and six months ended June 30, 2023 and year ended December 31, 2022 was $0. |
Note 11 - Commitments and Conti
Note 11 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 11. COMMITMENTS AND CONTINGENCIES Related Party Technology License Agreement The Company is obligated to pay royalties and development and patent costs pursuant to an exclusive Amended and Restated Intellectual Property License Agreement dated as of September 30, 2016, with Syzygy, a company owned and controlled by stockholder/consultant Mr. Elwood Norris and stockholder/consultant Mr. James Barnes. The agreement provides for royalty payments of 4% of revenue from products employing the licensed ensnarement device technology up to an aggregate of $1,000 in royalties or until September 30, 2026 , Service Provider Agreement Pursuant to the Professional Services and Technology Acquisition Agreement (the “ Agreement Service Provider Technology, Services, and License Purchase Commitments At June 30, 2023, the Company was committed for approximately $3,878 for future component deliveries that are generally subject to modification or rescheduling in the normal course of business. Indemnifications and Guarantees Our officers and directors are indemnified as to personal liability as provided by the Delaware law and the Company’s articles and bylaws. The Company may also undertake indemnification obligations in the ordinary course of business related to its operations. The Company is unable to estimate with any reasonable accuracy the liability that may be incurred pursuant to any such indemnification obligations now or in the future. Because of the uncertainty surrounding these circumstances, the Company’s current or future indemnification obligations could range from immaterial to having a material adverse impact on its financial position and its ability to continue in the ordinary course of business. The Company has no liabilities recorded for such indemnities. Regulatory Agencies The Company is subject to oversight from regulatory agencies regarding firearms that arises in the ordinary course of its business. Litigation Shareholder Derivative Litigation On November 13, 2020, Naresh Rammohan filed a shareholder derivative action in the US District Court for the Central District of California against current and former Company officers as well as current and former Company directors alleging unjust enrichment, breach of fiduciary duty, waste of corporate assets, and contribution claims under the Securities Exchange Act of 1934, docketed as Case No. 2:20-cv-10444-DMG-PVCx. The derivative action was dismissed with prejudice by stipulation of the parties on May 3, 2022. |
Note 12 - Related Party Transac
Note 12 - Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | 12. RELATED PARTY TRANSACTIONS Commencing in October 2017 the Company began reimbursing Mr. Elwood Norris, a former officer, current 10% stockholder and consultant of the Company, $1.5 per month on a month-to-month basis for laboratory facility expense, for an aggregate of $4.5 and $9 during the three and six months ended June 30, 2023, and 2022, respectively. Mr. Norris retired as the Company’s Chief Technology Officer effective June 30, 2021, and commencing July 1, 2021, was engaged as a month-to-month consultant. Mr. Norris was paid a monthly fee of $7.5 per month for aggregate consulting payments of $22.5 and $45 during each of the three and six months ended June 30, 2023 and 2022. See Notes 7, 11 and 14 for additional information on related party transactions and obligations. |
Note 13 - Major Customers and R
Note 13 - Major Customers and Related Information | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Concentration Risk Disclosure [Text Block] | 13. MAJOR CUSTOMERS AND RELATED INFORMATION For the three months ended June 30, 2023, revenue from two three For the six months ended June 30, 2023, revenue from three one At June 30, 2023, accounts receivable from three one The following table summarizes revenue by geographic region. Revenue is attributed to countries based on customer’s delivery location: For the Three Months For the Six Months Ended June 30, Ended June 30, 2023 2022 2023 2022 Americas $ 1,168 $ 1,090 $ 1,878 $ 2,285 Europe, Middle East and Africa 35 73 36 247 Asia Pacific (1 ) 2 (1 ) 232 Total $ 1,202 $ 1,165 $ 1,913 $ 2,764 |
Note 14 - Subsequent Events
Note 14 - Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 14. SUBSEQUENT EVENTS Registered Direct Offering On June 29, 2023, the Company entered into a Securities Purchase Agreement with a founder and director of the Company and certain accredited and institutional investors (collectively, the “ Investors Offering Series A Preferred Warrants Closing Although the Closing occurred subsequent to June 30, 2023, the Company received approximately $7.35 million in gross proceeds from the Offering on June 30, 2023 following the execution of the Securities Purchase Agreement and prior to the Closing, which amount is reflected in cash and cash equivalents, with an offset to accrued expense, each as reflected in the Company’s Condensed Consolidated Balance Sheet at June 30, 2023. At the Closing, the Company received additional gross proceeds from the Offering of approximately $2.65 million. After payment of placement agent fees and costs of the Offering, the net proceeds from the Offering were approximately $9 million. The Company intends to allocate the proceeds from the Offering to scale the Company’s sales team, support marketing efforts, and fuel the evolution and diversification of the Company’s product offerings. The Company has evaluated other events subsequent to June 30, 2023 through the date the accompanying financial statements were filed with the Securities and Exchange Commission and noted that, other than as set forth above, there have been no other events or transactions which would affect the Company’s financial statements for the quarter ended June 30, 2023. Acquisition of Intrensic, LLC On August 9, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Intrensic, LLC, a Delaware limited liability company (“ Intrensic Sellers Membership Interests Intrensic Closing Purchase Price Intrensic Acquisition The Purchase Agreement contains representations, warranties and covenants of the Company and Sellers that are customary for a transaction of this nature, a customary indemnification provisions whereby Sellers will indemnify the Company for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of Sellers regarding Intrensic, ownership of the Membership Interest, and certain other matters, subject to certain caps and thresholds. The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the full text of the Purchase Agreement, a copy of which is filed as an exhibit to this Quarterly Report and is incorporated by reference in this description of the Purchase Agreement. Kevin Mullins, a director of the Company and the Company’s Chief Executive Officer, owns approximately 9.53% of the Membership Interests, and as such, has a financial interest in the Intrensic Acquisition. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Organization and Business Description [Policy Text Block] | Organization and Business Description Wrap Technologies, Inc., a Delaware corporation (the “ Company we us our Common Stock Nasdaq |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“ SEC U.S. GAAP Annual Report Where necessary, the prior year’s information has been reclassified to conform to the current year presentation. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The Company has one VR |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions (e.g., stock-based compensation valuation, allowance for doubtful accounts, valuation of inventory and intangible assets, warranty reserve, accrued expense and recognition and measurement of contingencies) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenue and expense during the reporting period. Actual results could materially differ from those estimates. |
Earnings Per Share, Policy [Policy Text Block] | Loss per Share Basic loss per common share is computed by dividing net loss for the period by the weighted-average number of shares of Common Stock outstanding during the period. Diluted net loss per Common Share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential Common Stock instruments outstanding to be antidilutive. Stock options and restricted stock units exercisable or issuable for a total of 4,117,586 and 6,458,823 shares of Common Stock were outstanding at June 30, 2023, and 2022, respectively. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Issued Accounting Guidance The Company has reviewed recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements will be expected to cause a material impact on its financial condition or the results of operations. |
Note 2 - Revenue and Product _2
Note 2 - Revenue and Product Costs (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | Customer Deferred Deposits Revenue Balance at January 1, 2023 $ - $ 333 Additions, net 3 124 Transfer to revenue - (117 ) Balance at June 30, 2023 $ 3 $ 340 Current portion $ 3 $ 211 Long-term portion $ - $ 129 |
Note 3 - Financial Instruments
Note 3 - Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | As of June 30, 2023 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 2,774 $ - $ - $ 2,774 U.S. Treasury securities in short-term investments - - - - Certificate of Deposits 6,500 - - 6,500 Total Financial Assets $ 9,274 $ - $ - $ 9,274 As of December 31, 2022 Adjusted Unrealized Unrealized Market Cost Gains Losses Value Level 1: Money Market Funds $ 3,004 $ - $ - $ 3,004 U.S. Treasury securities in short-term investments 9,849 100 - 9,949 Certificate of Deposits 4,000 - - 4,000 Total Financial Assets $ 16,853 $ 100 $ - $ 16,953 |
Note 4 - Inventories (Tables)
Note 4 - Inventories (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | June 30, 2023 December 31, 2022 Finished goods $ 3,793 $ 2,293 Work in process - - Raw materials 2,727 1,682 Inventories - net $ 6,520 $ 3,975 |
Note 5 - Property and Equipme_2
Note 5 - Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | June 30, 2023 December 31, 2022 Production and lab equipment $ 506 $ 513 Tooling 490 448 Computer equipment 561 531 Furniture, fixtures and improvements 181 181 1,738 1,673 Accumulated depreciation (1,150 ) (915 ) Property and equipment, net $ 588 $ 758 |
Note 6 - Intangible Assets, N_2
Note 6 - Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | June 30, 2023 December 31, 2022 Amortizable intangible assets: Patents $ 744 $ 575 Trademarks 157 150 Purchased software 1,962 1,962 2,863 2,687 Accumulated amortization (629 ) (462 ) Total amortizable 2,234 2,225 Indefinite life assets (non-amortizable) 354 344 Total intangible assets, net $ 2,588 $ 2,569 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2023 (9 months) $ 259 2024 518 2025 513 2026 290 2027 42 Thereafter 612 Total estimated amortization expense $ 2,234 |
Note 7 - Accounts Payable and_2
Note 7 - Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | June 30, 2023 December 31, 2022 Patent and legal costs $ 103 $ 135 Accrued compensation 777 1,100 Warranty costs 75 125 Pre-funding of the sale of shares, preferred stock and warrants 7,350 - Taxes and other 257 103 Total $ 8,562 $ 1,463 |
Schedule of Product Warranty Liability [Table Text Block] | Six Months Ended June 30, 2023 2022 Balance, beginning of period $ 125 $ 96 Warranty settlements (6 ) (63 ) Warranty provision (44 ) 45 Balance, end of period $ 75 $ 78 |
Note 9 - Share-based Compensa_2
Note 9 - Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Weighted Average Options on Common Shares Exercise Price Remaining Contractual Term Aggregate Intrinsic Value Outstanding January 1, 2023 5,491,399 $ 3.72 5.96 $ 92 Granted 60,000 $ 1.34 Exercised (250 ) $ 1.5 Forfeited, cancelled, expired (1,982,900 ) $ 4.14 Outstanding June 30, 2023 3,568,249 $ 3.37 8.08 $ 7 Exercisable June 30, 2023 1,052,714 $ 4.56 6.79 $ 0 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | For the Six Months Ended June 30, 2023 2022 Expected stock price volatility 49 % 49 % Risk-free interest rate 3.64 % 1.09 % Expected life of options 6.66 1.82 Weighted-average fair value of options granted $ 0.55 $ 1.32 |
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | Service-Based RSU's Weighted Average Grant Date Fair Value Weighted Average Vesting Period (Years) Unvested at January 1, 2023 922,057 $ 2.88 2.11 Granted - service based 625,896 $ 1.31 Vested (734,444 ) $ 2.87 Forfeited and cancelled (264,172 ) $ 2.49 Unvested at June 30, 2023 549,337 $ 2.03 1.88 |
Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award [Table Text Block] | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Selling, general and administrative $ 990 $ 591 $ 1,552 $ 1,485 Research and development 231 136 297 271 Total share-based expense $ 1,221 $ 727 $ 1,849 $ 1,756 |
Note 13 - Major Customers and_2
Note 13 - Major Customers and Related Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Notes Tables | |
Disaggregation of Revenue [Table Text Block] | For the Three Months For the Six Months Ended June 30, Ended June 30, 2023 2022 2023 2022 Americas $ 1,168 $ 1,090 $ 1,878 $ 2,285 Europe, Middle East and Africa 35 73 36 247 Asia Pacific (1 ) 2 (1 ) 232 Total $ 1,202 $ 1,165 $ 1,913 $ 2,764 |
Note 1 - Organization and Sum_2
Note 1 - Organization and Summary of Significant Accounting Policies (Details Textual) | 6 Months Ended | ||
Jun. 30, 2023 $ / shares shares | Jun. 30, 2022 shares | Dec. 31, 2022 $ / shares | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | |
Number of Wholly-owned Subsidiaries | 1 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 4,117,586 | 6,458,823 |
Note 2 - Revenue and Product _3
Note 2 - Revenue and Product Costs (Details Textual) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Contract with Customer, Liability | $ 340 | $ 333 |
Virtual Reality Training [Member] | ||
Contract with Customer, Liability | 217 | 198 |
Training [Member] | ||
Contract with Customer, Liability | 17 | 11 |
Extended Product Warranties [Member] | ||
Contract with Customer, Liability | $ 106 | $ 124 |
Note 2 - Revenue and Product _4
Note 2 - Revenue and Product Costs - Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Balance at January 1, 2023 | $ 333 | |
Balance at June 30, 2023 | 340 | |
Current portion | 211 | $ 166 |
Long-term portion | 129 | $ 167 |
Customer Deposits [Member] | ||
Balance at January 1, 2023 | 0 | |
Additions, net | 3 | |
Transfer to revenue | 0 | |
Balance at June 30, 2023 | 3 | |
Current portion | 3 | |
Long-term portion | 0 | |
Deferred Revenue [Member] | ||
Balance at January 1, 2023 | 333 | |
Additions, net | 124 | |
Transfer to revenue | (117) | |
Balance at June 30, 2023 | 340 | |
Current portion | 211 | |
Long-term portion | $ 129 |
Note 3 - Financial Instrument_2
Note 3 - Financial Instruments (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, after Tax | $ 0 | $ 12 | $ 0 | $ (11) |
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, after Tax | $ 0 | $ (12) | $ 0 | $ 11 |
Note 3 - Financial Instrument_3
Note 3 - Financial Instruments - Instruments by Significant Investment Category (Details) - Fair Value, Inputs, Level 1 [Member] - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Adjusted Cost | $ 9,274 | $ 16,853 |
Unrealized Gains | 0 | 100 |
Unrealized Losses | 0 | 0 |
Market Value | 9,274 | 16,953 |
Money Market Funds [Member] | ||
Adjusted Cost | 2,774 | 3,004 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Market Value | 2,774 | 3,004 |
US Treasury Securities in Short-term Investments [Member] | ||
Adjusted Cost | 9,849 | |
Unrealized Gains | 100 | |
Unrealized Losses | 0 | |
Market Value | 9,949 | |
Certificates of Deposit [Member] | ||
Adjusted Cost | 6,500 | 4,000 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Market Value | 6,500 | $ 4,000 |
US Treasury Securities Considered Cash Equivalents [Member] | ||
Adjusted Cost | 0 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Market Value | $ 0 |
Note 4 - Inventories - Summary
Note 4 - Inventories - Summary of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finished goods | $ 3,793 | $ 2,293 |
Work in process | 0 | 0 |
Raw materials | 2,727 | 1,682 |
Inventories - net | $ 6,520 | $ 3,975 |
Note 5 - Property and Equipme_3
Note 5 - Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Depreciation | $ 118 | $ 124 | $ 236 | $ 237 |
Note 5 - Property and Equipme_4
Note 5 - Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property and equipment, gross | $ 1,738 | $ 1,673 |
Accumulated depreciation | (1,150) | (915) |
Property and equipment, net | 588 | 758 |
Production and Lab Equipment [Member] | ||
Property and equipment, gross | 506 | 513 |
Tooling [Member] | ||
Property and equipment, gross | 490 | 448 |
Computer Equipment [Member] | ||
Property and equipment, gross | 561 | 531 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | $ 181 | $ 181 |
Note 6 - Intangible Assets, N_3
Note 6 - Intangible Assets, Net (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Amortization of Intangible Assets | $ 85 | $ 73 | $ 167 | $ 143 |
Note 6 - Intangible Assets, N_4
Note 6 - Intangible Assets, Net - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Amortizable intangible assets, gross | $ 2,863 | $ 2,687 |
Accumulated amortization | (629) | (462) |
Total amortizable | 2,234 | 2,225 |
Indefinite life assets (non-amortizable) | 354 | 344 |
Total intangible assets, net | 2,588 | 2,569 |
Patents [Member] | ||
Amortizable intangible assets, gross | 744 | 575 |
Trademarks [Member] | ||
Amortizable intangible assets, gross | 157 | 150 |
Computer Software, Intangible Asset [Member] | ||
Amortizable intangible assets, gross | $ 1,962 | $ 1,962 |
Note 6 - Intangible Assets, N_5
Note 6 - Intangible Assets, Net - Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
2023 (9 months) | $ 259 | |
2024 | 518 | |
2025 | 513 | |
2026 | 290 | |
2027 | 42 | |
Thereafter | 612 | |
Total amortizable | $ 2,234 | $ 2,225 |
Note 7 - Accounts Payable and_3
Note 7 - Accounts Payable and Accrued Liabilities (Details Textual) - USD ($) $ in Thousands | 6 Months Ended | ||||
Jul. 05, 2023 | Jul. 05, 2023 | Jun. 29, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Accrued Funding Proceeds | $ 7,350 | $ 0 | |||
Former CEO Payable [Member] | |||||
Employee-related Liabilities | 80 | ||||
Commissions Payable [Member] | |||||
Employee-related Liabilities | 1,022 | ||||
Registered Direct Offering [Member] | |||||
Proceeds from Issuance or Sale of Equity | $ 7,400 | 7,350 | |||
Accrued Funding Proceeds | 7,400 | ||||
Registered Direct Offering [Member] | Subsequent Event [Member] | |||||
Proceeds from Issuance or Sale of Equity | $ 2,650 | $ 10,000 | |||
Syzygy Licensing LLC [Member] | |||||
Accounts Payable | $ 40 | $ 127 |
Note 7 - Accounts Payable and_4
Note 7 - Accounts Payable and Accrued Liabilities - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Patent and legal costs | $ 103 | $ 135 |
Accrued compensation | 777 | 1,100 |
Warranty costs | 75 | 125 |
Pre-funding of the sale of shares, preferred stock and warrants | 7,350 | 0 |
Taxes and other | 257 | 103 |
Total | $ 8,562 | $ 1,463 |
Note 7 - Accounts Payable and_5
Note 7 - Accounts Payable and Accrued Liabilities - Changes in Product Warranty Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Balance, beginning of period | $ 125 | $ 96 |
Warranty settlements | (6) | (63) |
Warranty provision | (44) | 45 |
Balance, end of period | $ 75 | $ 78 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Details Textual) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Note 9 - Share-based Compensa_3
Note 9 - Share-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Apr. 01, 2022 | Jun. 30, 2022 | Apr. 30, 2022 | Jan. 31, 2022 | Jun. 30, 2021 | May 31, 2019 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2017 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number | 3,568,249 | 3,568,249 | 5,491,399 | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 60,000 | |||||||||||
Share-Based Payment Arrangement, Expense | $ 1,221 | $ 727 | $ 1,849 | $ 1,756 | ||||||||
Performance Shares [Member] | Chief Executive Officer and President [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 1,049,145 | |||||||||||
Share-Based Payment Arrangement, Option [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0% | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 6 years 7 months 28 days | 1 year 9 months 25 days | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 49% | 49% | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.64% | 1.09% | ||||||||||
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | 2,609 | $ 2,609 | ||||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 1 month 13 days | |||||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||||
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 1,115 | $ 1,115 | ||||||||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 9 months 25 days | |||||||||||
The 2017 Stock Incentive Plan [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 9,000,000 | 9,000,000 | 9,000,000 | 2,000,000 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized | 1,500,000 | 1,500,000 | 2,100,000 | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 2,848,936 | 2,848,936 | ||||||||||
Share-Based Payment Arrangement, Accelerated Cost | $ 178 | $ 242 | ||||||||||
The 2017 Stock Incentive Plan [Member] | Service-based Options [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number | 1,954,019 | 1,954,019 | ||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number | 1,614,230 | 1,614,230 | ||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | Chief Executive Officer and President [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 1,614,230 | |||||||||||
Share Price | $ 2.89 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 10 years | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 49% | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.90% | |||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | Chief Executive Officer and President [Member] | Minimum [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Requisite Service Period | 4 years | |||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | Chief Executive Officer and President [Member] | Maximum [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Requisite Service Period | 7 years | |||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | Chief Executive Officer and President [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vesting, Sustained Market Capitalization | $ 250,000 | |||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | Chief Executive Officer and President [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vesting, Sustained Market Capitalization | 500,000 | |||||||||||
The 2017 Stock Incentive Plan [Member] | Performance Shares [Member] | Chief Executive Officer and President [Member] | Share-Based Payment Arrangement, Tranche Three [Member] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vesting, Sustained Market Capitalization | $ 1,000,000 | |||||||||||
The 2017 Stock Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||||||||||||
Share-Based Payment Arrangement, Expense | $ 255 | $ 408 | $ 567 | $ 1,145 | ||||||||
The 2017 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||
Share-Based Payment Arrangement, Expense | $ 319 | $ 966 | $ 1,282 | $ 611 |
Note 9 - Share-based Compensa_4
Note 9 - Share-based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Options on Common Shares, Outstanding (in shares) | shares | 5,491,399 | |
Outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 3.72 | |
Outstanding, remaining contractual term (Year) | 8 years 29 days | 5 years 11 months 15 days |
Outstanding, aggregate intrinsic value | $ | $ 7 | $ 92 |
Options on Common Shares, Granted (in shares) | shares | 60,000 | |
Granted, weighted average exercise price (in dollars per share) | $ / shares | $ 1.34 | |
Options on Common Shares, Exercised (in shares) | shares | (250) | |
Exercised, weighted average exercise price (in dollars per share) | $ / shares | $ 1.5 | |
Options on Common Shares, Forfeited, cancelled, expired (in shares) | shares | (1,982,900) | |
Forfeited, cancelled, expired, weighted average exercise price (in dollars per share) | $ / shares | $ 4.14 | |
Options on Common Shares, Outstanding (in shares) | shares | 3,568,249 | 5,491,399 |
Outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 3.37 | $ 3.72 |
Options on Common Shares, Exercisable (in shares) | shares | 1,052,714 | |
Exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 4.56 | |
Exercisable, remaining contractual term (Year) | 6 years 9 months 14 days | |
Exercisable, aggregate intrinsic value | $ | $ 0 |
Note 9 - Share-based Compensa_5
Note 9 - Share-based Compensation - Summary of Stock Option Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Expected stock price volatility | 49% | 49% |
Risk-free interest rate | 3.64% | 1.09% |
Weighted-average fair value of options granted (Year) | 6 years 7 months 28 days | 1 year 9 months 25 days |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.55 | $ 1.32 |
Note 9 - Share-based Compensa_6
Note 9 - Share-based Compensation - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Awards other than options, unvested, beginning balance (in shares) | 922,057 | |
Awards other than options, unvested, weighted average grant date fair value, beginning balance (in dollars per share) | $ 2.88 | |
Weighted average vesting period (Year) | 1 year 10 months 17 days | 2 years 1 month 9 days |
Awards other than options, Granted (in shares) | 625,896 | |
Awards other than options, granted, weighted average grant date fair value (in dollars per share) | $ 1.31 | |
Awards other than options, Vested (in shares) | (734,444) | |
Awards other than options, vested, weighted average grant date fair value (in dollars per share) | $ 2.87 | |
Awards other than options, Forfeited and cancelled (in shares) | (264,172) | |
Awards other than options, forfeited and cancelled, weighted average grant date fair value (in dollars per share) | $ 2.49 | |
Awards other than options, unvested, beginning balance (in shares) | 549,337 | 922,057 |
Awards other than options, unvested, weighted average grant date fair value, beginning balance (in dollars per share) | $ 2.03 | $ 2.88 |
Note 9 - Share-based Compensa_7
Note 9 - Share-based Compensation - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based expense | $ 1,221 | $ 727 | $ 1,849 | $ 1,756 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based expense | 990 | 591 | 1,552 | 1,485 |
Research and Development Expense [Member] | ||||
Share-based expense | $ 231 | $ 136 | $ 297 | $ 271 |
Note 10 - Defined Contributio_2
Note 10 - Defined Contribution Plan (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 0 | $ 0 | $ 0 |
Note 11 - Commitments and Con_2
Note 11 - Commitments and Contingencies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Nov. 22, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2016 | |
Contractual Obligation | $ 3,878,000 | $ 3,878,000 | ||||
Professional Services and Technology Acquisition Agreement [Member] | ||||||
Payments to Acquire Businesses, Gross | $ 700,000 | |||||
Related Party Technology License Agreement [Member] | Syzygy Licensing LLC [Member] | ||||||
Royalty Payments, Percentage of Product Revenue | 4% | |||||
Maximum Royalties to Be Paid Under Agreement | $ 1,000 | |||||
Royalty Expense | 40,000 | $ 34,000 | 64,000 | $ 83,000 | ||
Royalty Guarantees, Commitments, Amount | $ 217,000 | $ 217,000 |
Note 12 - Related Party Trans_2
Note 12 - Related Party Transactions (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction, Amounts of Transaction | $ 4,500 | $ 9,000 | |
Mr. Elwood Norris [Member] | |||
Reimbursement of Expenses to Related Party, Monthly Amount | 1,500 | ||
Consulting Fees to Related Party, Monthly Amount | 7,500 | ||
Mr. Elwood Norris [Member] | Consultant [Member] | |||
Related Party Transaction, Amounts of Transaction | $ 22,500 | $ 45,000 | $ 45,000 |
Note 13 - Major Customers and_3
Note 13 - Major Customers and Related Information (Details Textual) - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Distributors [Member] | |||||
Number of Major Customers | 2 | 3 | 3 | 1 | |
Revenue Benchmark [Member] | Distributor One [Member] | |||||
Concentration Risk, Percentage | 21% | 24% | 15% | 25% | |
Revenue Benchmark [Member] | Distributor Two [Member] | |||||
Concentration Risk, Percentage | 21% | 18% | 14% | ||
Revenue Benchmark [Member] | Distributor Three [Member] | |||||
Concentration Risk, Percentage | 12% | 13% | |||
Revenue Benchmark [Member] | Distributor Four [Member] | |||||
Concentration Risk, Percentage | 11% | ||||
Accounts Receivable [Member] | Distributors [Member] | |||||
Number of Major Customers | 3 | 1 | |||
Accounts Receivable [Member] | Distributor One [Member] | |||||
Concentration Risk, Percentage | 22% | 70% | |||
Accounts Receivable [Member] | Distributor Two [Member] | |||||
Concentration Risk, Percentage | 13% | ||||
Accounts Receivable [Member] | Distributor Three [Member] | |||||
Concentration Risk, Percentage | 13% |
Note 13 - Major Customers and_4
Note 13 - Major Customers and Related Information - Disaggregation of Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues | $ 1,202 | $ 1,165 | $ 1,913 | $ 2,764 |
Americas [Member] | ||||
Revenues | 1,168 | 1,090 | 1,878 | 2,285 |
Europe, Middle East and Africa [Member] | ||||
Revenues | 35 | 73 | 36 | 247 |
Asia Pacific [Member] | ||||
Revenues | $ (1) | $ 2 | $ (1) | $ 232 |
Note 14 - Subsequent Events (De
Note 14 - Subsequent Events (Details Textual) - USD ($) | 6 Months Ended | ||||||
Aug. 09, 2023 | Jul. 05, 2023 | Jul. 05, 2023 | Jul. 05, 2023 | Jun. 29, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||
Registered Direct Offering [Member] | |||||||
Proceeds from Issuance or Sale of Equity | $ 7,400,000 | $ 7,350,000 | |||||
Subsequent Event [Member] | Intrensic, LLC [Member] | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | ||||||
Payments to Acquire Businesses, Gross | $ 553,588 | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 1,250,000 | ||||||
Subsequent Event [Member] | Warrants Issued in Registered Direct Offering [Member] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 6,896,553 | 6,896,553 | 6,896,553 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.45 | $ 1.45 | $ 1.45 | ||||
Subsequent Event [Member] | Registered Direct Offering [Member] | |||||||
Proceeds from Issuance or Sale of Equity | $ 2,650,000 | $ 10,000,000 | |||||
Proceeds from Issuance or Sale of Equity, Net | $ 9,000,000 | ||||||
Subsequent Event [Member] | Registered Direct Offering [Member] | Series A Preferred Stock [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 10,000 | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred Stock, Stated Value Per Share | $ 1,000 | $ 1,000 | $ 1,000 | ||||
Preferred Stock, Convertible, Shares Issuable | 6,896,553 | 6,896,553 | 6,896,553 | ||||
Preferred Stock, Convertible, Conversion Price | $ 1.45 | $ 1.45 | $ 1.45 | ||||
Preferred Stock, Dividend Rate, Percentage | 8% |